'Warehouse insurance must be handled seperately - Goods not covered by marine/transit policy

CLIVE EMDON
HUGE POTENTIAL costs from claims against warehousing companies make it obligatory for them to be protected as a safeguard against recovery action from insurance groups, says Herman Grobbelaar, a director of short-term insurance specialists, Prestmarine International. He says this might follow a loss from the warehouse even if the cargo owner has adequate insurance of his own. “Warehouse insurance should be handled separately from marine and transit insurance with the focus on fire, burglary, accidental damage and various liabilities that go with the risk of storage,” says Grobbelaar. “Many clients neglect to think about insurance once goods are not in their possession but rather held by the warehouse owner or lessee.” And while clients may not request insurance cover, it is inevitably the warehouse operator’s responsibility when things go wrong, he said. In a recent example, a freight operator collected a valuable consignment of computers on behalf of an importer. The importer did not arrange insurance as he felt that not much could go wrong on airfreight consignments. The consignment arrived at the freight operator’s warehouse. Then an armed robbery took place and the entire consignment was stolen. The importer expected reimbursement from the freight operator for the loss. Marine marketing manager Susan Bester takes the warning further and says owners or lessees of warehousing, exposed to certain risks, can also be held responsible by third parties when things go wrong. “While as an agent your standard trading conditions may absolve you from liability, your client may not be properly insured, and will have to carry the financial burden. This may result in a very unhappy client and the possibility of a liability claim being instituted against your company.” She says owners of cargo are often under the impression that their marine and transit policies cover goods that arrive at a storage facility following an import or transit leg. “Unless specific arrangements have been made with your insurer, the warehouse becomes the final destination and the marine/transit policy terminates upon arrival of the goods at the warehouse.”