Not all damages are large, but even the small ones are troublesome and may result in a loss. However long we have stayed free from damage to our priced cargo, damage does remain a real risk of life and a risk that should not be ignored.
A “general average” (loss) as shown above thankfully doesn’t happen very often, but indeed it does. Not only is the cargo lost but the ancient “general average” clause kicks in which has to this day survived and reads something like:
All parties in a sea “adventure” (ship, cargo and freight) proportionally share the losses resulting from a voluntary and successful sacrifice of part of the ship or cargo to save the whole adventure from an impending peril or extraordinary expenses necessarily incurred for the joint benefit of ship and cargo.
What does this mean for you?
It simply means that if “general average” is declared and your cargo is not insured, you will be asked to pay your part of the “general average”. However, if you are insured through a good marine insurer like Lloyds of London, this is part of your insurance policy and you will be covered.
This highlights the importance of transport insurance.
But what do you do in the case of damage to your cargo?
1. Take pictures
The moment you discover that there may me damages to your cargo, take pictures immediately. Preferably still inside the container or truck, whatever the case may be. Generally, please note that time is of essence. It is no good to wait a week and take pictures of a broken item in a warehouse somewhere as the insurance company will most likely reject the claim.
2. Lodge a proforma claim
Let us know that you or your customer have noticed damages, send supporting pictures and advise that a priced claim will follow, should you not be able to immediately put a value to the damage.
This enables us to put the carrier and the insurance company on notice, in case we have covered insurance on your behalf. Please remember we may only cover transport insurance on written instructions.
3. Lodge a priced claim
This will be forwarded to the insurance together with all other necessary documentation such as commercial invoice, freight document, customs bill of entries etc.
4. Await payment
All you have to do now is await payment from your insurance, less the agreed excess.
As mentioned in one of our earlier articles the forwarder may not make a hidden profit on the insurance premium, but may only charge an insurance administration fee.
The question is really not if one can afford to insure, it is much rather “can I afford not to insure?”
It is of utmost Importance to use a good reputable insurance broker.