Marine Insurance – Don’t get caught short!

Everyone who is part of the logistics chain needs to have some form of insurance, and it is important to have the correct type of cover and to be adequately insured.

“A large unforeseen loss could mean the end of an otherwise viable business,” warned Shikara Premchand – Balgobind, Marine Insurance and Liability Specialist at Turners Shipping.

Despite its name, marine insurance covers all forms of transport including road, air and goods on ships. “So, if you are moving goods from one point to another you need marine insurance,” she says.

March is Marine Insurance month at Turners Shipping and Premchand – Balgobind has been conducting training workshops for their staff to keep them informed in matters related to insurance in the logistics and freight management industries.

“While most people understand the need for basic insurance, we are finding that adequate cover is another matter. There are a number of instances where extended cover is needed and is indeed essential.”

Importers and exporters are often unaware that they are responsible for the container their goods are being transported in. “They are liable for any damage to the container, or even the loss of the container, either can be very costly,” she explains.

Another area that needs attention is Cost, Insurance and Freight, referred to in the industry as CIF. This insurance covers the value of the freight, the duties and taxes and the cost of insuring the consignment. The CIF Inco Term only covers the insurance up to the port of destination. I always advise clients to ensure that they cover the additional transportation leg, she says.

One aspect of maritime law that affects any goods being transported by sea is the law of General Average. This holds that all parties who have goods on board a vessel will share in any losses incurred should some of the cargo be jettisoned to save the ship, its crew and the balance of the cargo.

“This means if you have freight on a ship and the ship encounters bad weather which causes some of its load to shift making the vessel unstable the captain might decide to jettison some of the cargo to remedy the situation. If general average is declared you, along with all of the other freight owners, will share the cost of the loss of the jettisoned cargo,” explains Shikara.

“The workshops with the staff have been useful as they have highlighted areas where we need to focus our attention in order to better serve our clients with regards to insurance matters.”