Insurers on board with piracy risks; New coverages offered to protect shipowners as pirate attacks grow.(NEWS)

Byline: ZACK PHILLIPS

As pirate attacks against commercial vessels continue near Somalia, shipowners have seen a proliferation of new insurance products designed for the specific challenges presented by this type of piracy.

Traditionally, piracy was covered under hull and war risk policies, but that is changing as marine underwriters encourage owners of ships traveling pirate-infested waters to buy specialty coverages that typically are grouped under a kidnap and ransom policy.

In recent decades, the typical attack involved pirates boarding a ship, stealing cash and valuables, and fleeing. But in 2007, gangs of Somali pirates began hijacking commercial ships, holding the vessel and crew hostageoften for monthsbefore releasing them for a ransom often in the seven-figure range.

Since then, pirates have expanded their reach from the Gulf of Aden, a choke point near the Suez Canal, to an estimated 1 million-square-mile area of the Indian Ocean.

In the first half of 2009, pirates near Somalia attacked 130 ships compared with 24 in the first half of 2008, according to the International Maritime Bureau's Piracy Reporting Center.

This type of piracy presents …