One of the most dangerous things an international trader can fail to do is to fail to insure the cargo, or, having decided to obtain an insurance policy, fail to ascertain whether the cover is adequate for all the risks involved. Even if the trader obtains an adequate cover, he/she must still understand and comply with the conditions of the insurance, and failure here may result in claims being rejected or underpaid.
The evidence of the need to insure cargo is plain indeed.
|Ital Florida in Junr 2007:
3 months old on her maiden voyage in 2007. Hit Heavy Seas in the Arabian Sea; 16 containers overboard and many others damaged.
|MSC Napoli (built 1991):
The 900 ft., 62,000-ton container ship, enroute to Le Havre and Sines, took on water after developing a hole on starboard side in gale-force 9 conditions in 40ft seas and 70mph winds –as it made its way through the English Channel. The crew were rescued and the vessel was then purposely grounded off the coast. Many containers were lost overboard and it took months to salvage the vessel.
|Hyundai Fortune March 2006:
The vessel ablaze in the Gulf of Aden
Photo credits: Cargo Law
All carriers, forwarders and cargo handlers have Limited Liability under their terms and conditions of trading, and in the case of international ocean and air carriers, limited liability under international conventions and national laws.
The trader has no physical control over the goods in transit once the cargo has left the warehouse or factory, and the cargo could be subject to General Average events, Wars, Strikes, Riots, Civil commotions, and other causes of loss and/or liability that can be covered by cargo insurance.
The only way traders can protect their interest is to take out ‘adequate’ transit cover, and ensure they are aware of, and fulfil, their own responsibilities under the contract. ‘Adequacy’ can be determined by evaluating what the major factors and risks are and then ensuring your policy has the necessary clauses to cover them.
ICAL can advise on these issues and arrange cargo insurance at competitive rates.