Cargo Insurance Questions & Answers

 

JLT Specialty’s Cargo team seeks to offer outstanding broking, technical and claims expertise from the policy’s initial design and formation.

The team answer a series of frequently asked questions. Contact us if you would like to discuss any of these questions and answers in more detail.

WHAT HAPPENS IF...


To determine coverage, check your insurance contract to see if it contains an automatic acquisition clause. This will provide cover at locations not advised at the inception of the insurance contract, or at newly acquired or utilised locations.

The extra expense clause that may be contained in your insurance contract provides coverage for such expenses when the non-delivery occurs due to circumstances beyond your control.

It is possible to get extra expense cover which will respond should the above event occur. This will allow you the commercial flexibility to discharge your cargo and store it and/or forward it to the intended or an alternative destination as may be required.

It is possible to get contingent ‘seller’s interest’ insurance cover. This will cover any recoverable loss for your interest should the above event occur, with the goods deemed to remain your property and/or at your risk from the commencement of transit.

It is possible to get contingent ‘buyer’s interest’ insurance cover. This will cover any recoverable loss for your interest should the above event occur, with the goods deemed to remain your property and/or at your risk from the commencement of transit.

It is possible to get insurance which covers you continuously from your risk attachment until your risk termination, and also whilst the vessel or conveyance may be delayed from any circumstance beyond your control, or even within your control.

Should the entire loss be left on your doorstep, it is possible to get cover which will pay you for the claim in full. Your insurers would then be subrogated to all rights against the other cargo owners and/or third parties responsible for the loss or damage suffered by the goods.

Contact your insurance broker immediately and take all reasonable steps to protect your goods. Costs incurred should be discussed with your broker, and coverage for reasonable costs incurred to save and protect your goods would be available under any good stock throughout policy.

Piracy can lead to multiple issues including ransom demands, damaged ships and declaration of general average. There could be coverage under your marine transit policy for some or all of these scenarios so you should seek guidance and instruction from your insurance broker.

Providing the costs were reasonably incurred in an effort to save the cargo, even if those attempts failed, they would fall for consideration under your cargo policy in addition to the value of the damaged goods.

Your policy contract would allow for genuine unintentional delay in reporting of risks. Advise your insurance broker so that the mistake can be corrected, deficient premium can be made good and the claim can be investigated and adjusted.

Notify your broker of a potential claim to the policy even if you think the carrier may reimburse you. It is always better to notify insurers, and then withdraw a claim, than to submit a claim long after the event by which time your claim may be time barred and the insurers’ position jeopardised.

Advise your insurance broker of the claim regardless so that they can notify the market on a precautionary basis and protect insurers’ recovery rights.

The cargo should try to be salvaged. All proceeds received for the goods will be deducted from the gross claim amount reducing the insured’s loss. Insurers can help arrange the salvage sale by appointing an independent company to assist the insured with obtaining buyers.

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