THEFT OF goods in transit is a problem familiar to most importers. This is one of the reasons why they take out marine insurance. However, persuading the insurer to pay can sometimes be an uphill battle.
One area of difficulty which I have identified concerns the duration of cover under the Institute of Cargo Clauses found in almost all marine insurance policies. Clause 8.1 of the Institute of Cargo Clauses states that protection is available from the time goods leave a warehouse until they are delivered to the consignees' or other, 'final warehouse or place of storage at the destination'.
Where goods are stolen from a bond store while they are awaiting clearance, certain domestic insurers have declined to pay claims on the grounds that insurance cover had lapsed. The argument is that by delaying the clearing process, the consignee has elected to use the bond store as a place for storage 'other than in the ordinary course of transit', for which cover is not available.
Whilst this argument ignores the fact that delays in clearing goods can be caused by numerous factors outside the control of the consignee, it is one which clearing agents and their clients need to be aware of. Where the delay is attributable to a genuine reluctance of a consignee to take delivery, e.g. where her financing is not in place, then the insurer's argument may have some merit.
To avoid this problem consignees need to ensure that they complete and return clearing instructions to their clearing agents promptly and ensure that all the relevant documentation is passed to them as speedily as possible.
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