Monday, April 27, 2009

Of Piracy and Occupational Disability Insurance

Given the cost of the upkeep of the commercial maritime traffic through the dangerous waters of the Gulf of Aden, will sky-high insurance premiums make this area a no go zone someday?

By: Ringo Bones

Occupational disability insurance is a relatively complex issue that often grabs the news headlines whenever a claim refusal happens, but can the various insurance providers still maintain economic viability when their regular customers are increasingly involved in insuring their business activities in increasingly hostile locales. Like the sea-lanes off the coast of Somalia.

At present, it is still economically viable – in spite of the rising insurance premiums and risk of piracy – for commercial bulk carriers to ply through the treacherous pirate infested waters of the Gulf of Aden to deliver their cargo of low-wage Asian manufactured goods. In order to meet the insatiable demand in European markets. But will that fateful day eventually come that commercial shipping through the Gulf of Aden will become so risky and prohibitively costly. So risky and costly in insurance premium terms that maritime traffic will be rerouted via the Cape of Good Hope as they travel from East Asia to Europe in spite of the additional fuel expenditure and longer transit time?

Currently occupational disability insurance issued to commercial shipping traffic in high-risk areas, like the Gulf of Aden, only cover the risk of injury and death by acts of piracy. But eventually, the occupational disability insurance being issued might someday include proviso for hazardous toxic waste exposure given that on-going preliminary investigation have shown that the Gulf of Aden had been used as an illegal toxic waste dump for over 20 years. Although the proof of the illegal toxic waste dumps that had been contaminating the waters of the Gulf of Aden are yet to be fully vetted and peer approved. Given that there is a clear and present danger that scientists working for the United Nations Environmental Program (UNEP) might be abducted and held for ransom as they collect for evidence of hazardous toxic waste contamination in Somali waters. And with the preexisting United Nations-style bureaucracy, the investigation could take awhile, but in time, it will eventually be proven. But for now, the need for strengthening and legitimizing the Somali government so that it can solve the piracy problem on its own terms has been given top priority.

Occupational disability insurance – also called permanent health insurance – comes in 2 basic types: occupational disability and general disability. An occupational disability policy provides the insured with a source of income in the form of disability benefits when the insured is no longer able to perform substantially all of the material acts of his or her occupation as designated in the policy. While a general disability policy typically provides benefits when the insured is unable to perform substantially all of the material acts of any occupation. Whether an insured under general disability policy satisfies the definition of total disability depends on the policyholder’s training, experience and future ability to secure gainful employment.

Given that the recent high-profile rescue of the Maersk Alabama skipper Capt. Richard Phillips and the US Navy SEAL team that rescued him might or might have been exposed to hazardous toxic chemicals being illegally dumped in the Gulf of Aden. Hopefully their permanent health insurance is sufficient to cover any future ill-effects of their “ordeal” without their insurance providers being dragged into the media spotlight in the near future due to claim refusals because of the lack of evidence of hazardous toxic chemical and radiation exposure. Or perhaps that lone surviving Somali teen pirate currently under FBI custody – Abduwali Abdukhadir Muse – could plead not guilty due to diminished capacity because of his exposure to the illegal hazardous toxic waste dumps in the Gulf of Aden. Looks like Somali piracy won't end any time soon.

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