"In addition, the hull policy often excludes 'acts of terrorism,' and courts still have not clearly defined whether pirates are terrorists. This can leave a crew that has been taken hostage at risk, while all parties--insurance companies, vessel owners and cargo owners--determine who will pay what for the ransom."

Jonathan Doherty, North Asia regional manager for the Chubb Group of Insurance Companies, noted that each year an average of 500 Korean ships pass through the Gulf of Aden, currently one of the most dangerous regions for piracy.

In 2008, 111 ships, including Korean-owned or manned cargo vessels, were attacked by pirates in the Gulf of Aden, a 200 percent increase over 2007. Forty-two of those ships were held for ransom, and 889 crew members were taken hostage. Most ransom demands were between $1 million and $4 million per ship, he noted.

The executives advised that kidnap, ransom and extortion insurance, subject to policy limits, terms and conditions, reimburses the policyholder for the pirate's ransom and extortion demands and pays for hostage/ransom negotiation expenses.

Such an insurance policy also responds to the costs of legal defense, public relations, interest on loans taken out to cover ransom demands, security guards, travel and accommodations for insured persons, medical and psychiatric services, and rewards leading to the safe release of kidnap victims, they added.

"It will take a great deal of teamwork to stop piracy at sea, and many countries are working together to do just that," said Bangs. "But, for now, vessel owners should consider the best ways to help protect their crew and property from a piracy event--including the type of insurance protection they select."

According to a spokesperson for the company, Chubb Group of Insurance Companies is "one of the top two writers of kidnap, ransom and extortion business in the U.S. and one of the top marine underwriters." She said the company does not reveal its business numbers.

Chubb is a multibillion-dollar organization providing property and casualty insurance for personal and commercial customers worldwide through 8,500 independent agents and brokers. Chubb's global network includes branches and affiliates throughout North America, Europe, Latin America, Asia and Australia.