Insurance oversight can cripple business

KEVIN MAYHEW AT LEAST 20% of clearing and forwarding agents are still confusing the insurance requirements for marine insurance with those necessary when providing storage as a convenience for the final receiving party. This oversight, says Prestmarine commercial director Herman Grobbelaar, has the potential to cripple businesses that do not pay attention to the extent of cover offered by their insurance. “At the very least insurance should be taken for acts of God, burglary and accidental damage. Then they should consider the “sleep easy” warehousemen’s liability insurance which covers other eventualities,” says Grobbelaar. He explains that cover lapses occur in two common scenarios – when either the clearing and forwarding agent thinks that the sender or recipient of the goods has cover but does not and there is a claim, or when goods are warehoused by a clearing and forwarding agent for longer than the period which can be realistically classified as part of the transit process. Even if the sender/receiver has his own insurance in place, there is always the chance that his insurers might claim against the freight agent under its subrogation rights. “Sometimes the agent agrees to warehouse the goods for the receiver as a favour to release them gradually, or at a later stage, and this is not covered in terms of normal marine insurance and must be treated as separate cover,” he explains.