All companies buying or selling goods that need to be shifted by road, rail, sea or
air, have some degree of what, in the insurance business, is known as marine cargo
transit exposure. Businesses often assume that this is covered when their hauliers
or suppliers insure the goods. Unfortunately this is not always the case and goods
may end up under-insured.
Suffering a £40,000 loss
Here is an example of a recent claim that involved a haulier delivering £50,000 worth of machinery to a U.K. customer: The driver caused an accident en route and the equipment was destroyed. Unfortunately, the haulier’s liability was limited to
£1,300 per tonne (a standard limit imposed under the U.K. Road Haulage Association RHA Conditions of Carriage) and because the machinery weighed two tonnes, the machinery supplier was paid just £2,600, leaving them with a £47,400 uninsured loss.
Problems can occur even if your customers are insuring the goods. Say for ex works sales (where the buyer is responsible for removing the goods from your premises), if your exported goods arrive damaged or are lost in transit & will your customer accept and pay for them
Similarly, you may encounter problems when insurance is arranged by your suppliers:
- How much are they charging you?
- How quickly is the claim time barred by the
- Suppliers insurance? This could be as little as three days for you to discover and act on a claim.
Scope of cover avaliable
A potential solution is to purchase your own marine cargo insurance, which can o er cover for a single cargo transit, or on an annual basis. Goods can be covered for all stages of the transportation process including removal from your warehouse prior to transit, and while being stored elsewhere incidental to transit. It can also be arranged on an all risks basis or for selected perils, including collision, overturning or derailment of the carriage vehicle, pilferage, jettison, fumigation, concealed damage etc.
If you transport goods either in the U.K. or abroad, feel free to call us to discuss how you can protect your goods with marine cargo insurance.