‘Insurance cover must involve cargo owners’

Decisions on insurance cover should not be taken lightly. “Cargo owners who rely on their logistic operators to insure their goods could face serious repercussions if the scope of their policies are not in line with the risks involved,” says Susan Duvenage, marine marketing manager for short term insurance operator Prestmarine International. She believes the insurance broker should be actively involved with the logistics operator in structuring the correct cover for individual clients. “There should be explicit agreement that the policy is a contract between the cargo owner and the insurer, merely facilitated by the logistics operator,” says Duvenage. “The type of cover, duration, and who is responsible for costs such as risk management and excesses should be agreed prior to attachment of the risk.” According to Duvenage, agents often find themselves under great pressure to enter into contracts which may contravene their standard trading conditions, leaving them liable for financial losses far exceeding the limits of their trading conditions. “It is not only loss or damages to cargo that are at stake but also consequential delays following these events such as fines, penalties and loss of profits if deadlines are not met.” She advises agents to ensure that they have consulted with their legal liability insurers if they enter into contracts that contravene their trading conditions. “In the current economic enviroment criminals are ruthless. Armed robberies at warehouses as well as hijackings are reported daily, with the value of stolen cargo often exceeding millions. “In addition, continuous labour disputes and strikes have resulted in malicious damage and delays causing serious trade disruption to the end receiver.” Perishable cargo and goods ordered for a specific event like the current World Cup are especially at risk, says Duvenage. “For these, delay and loss of market is not automatically covered under a marine policy – additional cover must be arranged for such risks.” Prestmarine is a short term insurance intermediary with facilities in place to cover marine commercial, personal and specialised liability lines.