Insurance should cover collateral damage

Environmental liability a prudent add-on
When it comes to
the transport
of dangerous
goods,
insurance should extend way
beyond the physical loss or
damage to the cargo.
“At Eikos we add on debris
removal cover,” said Eikos Risk
Applications marine insurance
specialist Lebogang Rahlao.
“But that’s not sufficient
for dangerous cargo.
In addition we
offer pollution or
environmental
liability where
we partner with
Envirosure to offer
the product.
You could have a situation
where dangerous cargo is spilt
on the road or does harm to
the environment – or there
could be liability that arises
to a third party or property
– which is why ancillary
to marine cargo insurance
you still need a pollution
liability policy.”
The collision of three
trucks on the N3
northbound two
years ago near
South Africa’s
busiest freeway
interchange,
Gilloolly's in
Gauteng, where
there was a
massive diesel
spill, was one
example of
the dangers of
transporting
hazardous
chemicals.
About four lanes of traffic
had to be closed at one
point. In such an incident,
the environmental liability
policy would cover the cost of
cleaning up, rehabilitation of
land and any liability following
that incident, he said.
“The shipping of dangerous
goods is covered by both
national and international
legislation,” said Rahlao. “The
SA Road Traffic Act governs
the movement of dangerous
goods nationally while the
International Maritime
Dangerous Goods Code is
the international standard.
The objectives are to protect
human life, protect against
marine pollution and facilitate
free movement of dangerous
goods.”
And keeping within the law
largely boils down to common
sense.
“Hazchem needs to be
identified on the shipping
documents, the documents
must be prepared accordingly
and the goods must be
packed appropriately,” said
Rahlao.
Many products may be
classified as dangerous goods
but are not always easy to
identify. “It is the shipper’s
prime responsibility to
correctly classify packaging
and documentation. This
responsibility can often be
shifted to the freight forwarder
in instances where the freight
forwarder is identified as the
shipper in the master bill of
lading ” he added.
“And if a freight forwarder is
loading items into a container
he should be aware of every
aspect surrounding their
movement.”
Non-compliance or nondeclaration
could result in a
claim being repudiated on
grounds of non-disclosure, said
Rahlao, as would insufficiency
of packaging.
The bottom line is never to
cut corners. It’s like driving
a car without third party
insurance – the downstream
impact could be devastating.
“While most shippers will
always consider pollution
liability cover when moving
dangerous goods, there are
many products that are not
classified as dangerous for
which this type of cover is
essential," said Rahlao.
“Milk, for example, may not
be a hazardous commodity
but it can pose significant risk
to the environment in certain
circumstances.
“Consulting with your
insurance agent should
therefore always be the first
line of defence."
INSERT & CAPTION
Many products may
be classified as
dangerous goods but
are not always easy
to identify.
– Lebogang Rahlao