Insurance broking specialist, Ascend Broking, is warning importers and exporters of the pitfalls of insuring goods in transit and being over-reliant on other parties, in the event of a claim.
Ascend Broking says too many businesses rely on their own commercial combined insurance policy for losses associated with storage and distribution and on their suppliers’ and freight forwarders’ policy to cover risks associated with losses incurred during transportation. With a noticeable rise in theft of goods in transit, the exposures are even greater than they were.
The reason for the warning is that hauliers’ or forwarders’ insurance policies are typically ones that will pay out in the event of any legal liability on the part of the carrier. However, the amount that they will cover is limited in value to a set amount per ton of cargo, no matter what type of cargo is carried. This could lead to losses on the part of the importer or exporter.
Similarly, the policy is only likely to cover any losses if legal liability can be proved and negligence has been at the heart of the loss. In many cases, this might not be true.
Not being fully aware of the terms and conditions in the hauliers’ policy on which you are relying can also be a mistake. Unbeknown to you, your supplier may actually not even be covering the goods, if they are sub-contracting the job out. You would be a further step removed from the chain, if you had to claim.
Should you be relying on the freight forwarding insurance policy of a foreign client, you could also find yourself having to pursue a claim in a different country, in a language that you do not speak and with a party with whom you have no direct relationship at all.
Other pitfalls can relate to the coverage terms of a marine cargo policy which can be overly restrictive. Some may vary their terms in countries where there is a higher risk of war or terrorism. Cover may be invalidated if you are trading with a country where international sanctions apply. Under the terms of some policies, the inland leg of a journey to or from a port will not be covered in countries with poor infrastructure or high levels of crime. Some countries also require the payment of insurance locally. In all of these instances, Ascend Broking can lend assistance.
The Ascend Broking team can also testify to the tenacity required to pursue some marine cargo claims. It has built its reputation on attention to detail and unrelenting persistence and the team effectively and efficiently pursues monies owed by third parties responsible for a client’s losses during the transit of the goods insured. It strives to ensure that those at-fault are not only forced to make the due payment but also cover the cost of other expenses incurred by its clients. This can be far from easy, but Ascend Broking’s systems help make the process highly successful, maximising the sums recovered for clients having to claim.
The head of Ascend Broking’s marine division, Matt Price, says: “As many manufacturers, wholesalers, retailers and distributors seek new global markets in the post-Brexit era, it is essential that they understand the risks of relying on their freight-forwarder’s policy or on their own capacity to pursue a claim with an overseas or reluctant third party. Marine cargo insurance is remarkably affordable and is for all sizes of business, not just large ones. The losses that could incur, because a company is over-reliant on a supplier’s insurance, are significant and the terms and conditions within those policies could be punitive, not paying out when the expectation is that they would.
“Even in a best case scenario, where a haulier or carrier was proved negligent, the claim will be restricted to the set amount payable per ton of cargo. If you are transporting high-value or luxury goods, that may well be totally insufficient to cover your losses.”
To talk to the highly experienced marine cargo team, please call 01245 449060.