‘Choose an approved carrier to mitigate risk’

The limited liability in most contracts of carriage is currently a major challenge in the insurance industry, according to Kennedy Ntenjwa, marine account executive at Aon SA. This, he told FTW, as insurers have battled to develop an insurance policy that will enable freight operators and bailees to insure their interest in their clients’ goods beyond their limited liability. “However,” he added, “we believe a policy – such as the one we have specially developed – will become more popular, and be available on the market from most marine insurers.” This follows the latest Financial Services Board (FSB) directive that does not allow freight operators and bailees to on-sell insurance to the clients for which they provide a transport service without first licensing as an authorised financial services provider. “There are several risk management challenges facing the industry – including infrastructure and labour issues – that impact negatively on transport service providers being able to deliver goods on time,” said Ntenjwa. “It is imperative for freight operators and owners of goods to ensure that they are properly covered and have a strict risk mitigation plan in place.” Owners of goods, he stressed, should always ensure they use an approved carrier – preferably one that offers standard trading conditions and can offer cargo owners more than their standard limitation of liability. They should also have a solid track record and sound reputation to mitigate risk in a progressively challenging road transport environment. “By not using an approved carrier, owners of goods may not be fully indemnified should they claim against an operator’s insurance,” said Ntenjwa. He also outlined other ways in which transport liability risks can be lowered. “In the event of multimodal transportation, where excessive handling occurs due to loading and off-loading, owners of goods should ensure that their goods are adequately packed to minimise the risk of any loss or damage. “The transport company should plan ahead and include a contingency plan in the event that there is either a strike or road infrastructure developments that may hinder the delivery of goods. “Transport companies need to be continuously aware of the crime hot spots, and should avoid these routes were possible.” CAPTION An all-too-familiar sight on SA roads ... choose a carrier with a solid track record.