The latest amendment
to the National Road
Traffic Regulations
demands careful
scrutiny since ignorance of its
implications could result in loss
of insurance cover.
As has been well
documented, in terms of
the amendment it is the
responsibility of the consignor
and consignee to ensure that
the cargo is fully insured.
But a question raised
by FTW reader Dave
Thompson, general manager of
Johannesburg-based CTS East,
was whether the transporter
was also required to insure the
cargo.
The answer, says Francine
Hattingh of Eikos Risk
Applications, is ‘no’.
“The transporter must
however carry an insurance
schedule on its vehicle
reflecting details of the
insurance on the truck and the
load and it does have to enter
into an agreement with the
consignor/consignee regarding
transport responsibilities,” she
added. “He is also prohibited
from accepting cargo if the
loading and transport are
not in accordance with the
Act. Thus the implication of
these requirements is that
the transporter is prohibited
from moving
uninsured
cargo.”
She suggests
that the
agreement that
the transporter
is required to
enter into with
the consignor/
consignee is
the ideal place
to set out
the relevant
insurance
arrangements and the
obligation to arrange cargo
insurance may be placed
squarely on the consignor and/
or consignee. “The haulier must
however still have a liability
policy in place alongside
the consignor/consignee’s
cargo insurance due to the
requirement that not only
the load but
transportation
risks must
also be fully
insured,” she
said.
Hattingh
also
recommends
that
transporters
have both
Goods In
Transit (GIT)
and liability
cover in place since this enables
them to move cargo that isn’t
insured by the consignor/
consignee and also avoids the
administration involved in
checking that the consignor/
consignee has proper insurance
in place.
“If the consignor does not
arrange adequate insurance for
the cargo, the transporter will
be in breach of the regulations
if he then moves the cargo by
road.”
The transporter, in his
capacity as bailee, can however
insure the cargo entrusted to
him – but if that property is
damaged or destroyed he is
required to pay the insurance
proceeds to the cargo owner.
“The reason for this,” says
Hattingh, “is that the insurance
by the transporter, while in his
own name, is ultimately for the
benefit of the cargo owner or
bailor.”
And since cargo interests
very often have already
arranged appropriate cargo
insurance for the cargo that
the transporter will move, she
advises hauliers to consider
arranging a “GIT contingency”
policy, which does not cover all
loads moved by the transporter,
but only those loads which
are not already insured by the
cargo interests to whom they
may sub-contract.
The bottom line is that the
haulier must still have a liability
policy in place alongside the
consignor/consignee’s cargo
insurance. “This because it is
mandatory that not only the
load, but transportation risks
must also be fully insured.”
The question that arises,
however, is what role the
Department of Transport
should play in regulating the
insurance of cargo.
“Surely it is up to the owners
of that cargo whether they
self insure or not,” says Eikos
director Hugh Reimers.
“The department’s only
interest, in my view, should
relate to damage to the
infrastructure (roads for
example) and pollution risks
which they are arguably entitled
to ensure are adequately
covered by “an offending party”.
“This valid concern has
turned into a nightmare of
misdirected regulations which
are impossible to police or
enforce and which only serve to
make attorneys richer.”
INSERT & CAPTION 1
The department’s
only interest, in my
view, should relate
to damage to the
infrastructure.
– Hugh Reimers
INSERT & CAPTION 2
The bottom line
is that the haulier
must still have a
liability policy in
place alongside the
consignor/consignee’s
cargo insurance.
– Francine Hattingh
