Allow me to share an unforgettable experience from my time as a marine underwriter. We had insured oil worth USD 100 million on a tanker , with a 10% share on ICC (C) terms – the most restrictive cover, also known as total loss cover, and the cheapest. With no losses reported over the last decade, this seemed a safe bet. However, just a few days after the policy period ended (which I did not renew for the next year), my client’s name appeared in the news: fire on board. 🔥
As reinsurers we had no direct information yet, but crucially, if the vessel commenced its journey during the policy period and did not stop at any port, the insurance would cover until the journey’s end.
Through media, I identified the vessel and confirmed through online tools that the journey started during the policy period and didn’t stop anywhere en route. It was clearly within our insurance policy period! The ship’s master then declared General Average (GA), which means if the ship-saving operation succeeded, even the most restrictive ICC (C) cover would be triggered as it covers GA 100%. The fire was put out with no harm to cargo, and the vessel safely reached shore. However, the cost of this operation was a staggering USD 20 million (highly overcharged, but that’s a story for another time). As insurer we paid almost USD 2 million, impacting that year’s profitability.
Now, imagine if the cargo hadn’t been insured! The cargo owner would’ve been on the hook for the salvors’ fee to recover USD 100 million worth of undamaged cargo.
From an insurer’s viewpoint, some might say this was bad luck. But what’s the moral here?
Always insure cargo in transit! The unexpected can happen, as my experience shows.
Stay prepared, protect your assets, and sleep easier!
Let’s simplify logistics risks together!
At Sureforth Insurance Consultancy, we help logistics, shipping companies and cargo owners navigate the complexities of logistics company liabilities, and cargo in transit insurance. With our deep industry expertise, we simplify the complex to ensure your business operates confidently and securely.
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