Insurance

If your goods were damaged in transit, who do you turn to? Are your goods covered? Who will pay? What are your rights?

A small minority of companies believe that their goods are covered for loss and damage automatically by the forwarder or haulier. This is not the case.

Some others cite CMR as being the cover that they rely on in the event of loss or damage.
In both cases, if a loss occurs to your consignment, you are NOT insured.

CMR Insurance

This insurance is basic liability insurance laid down by the ìThe Convention des Marchandises Routier ì(CMR). This is basic cover that every haulier must have as a requirement to have an International road hauliers licence to operate.

This is a limited liability cover, so will ensure that if the driver causes an accident, or is careless or negligent, then the Insurance will cover this liability in the event of a properly formed claim. It is however often the case that:

There is no smoking gun evidence of liability. In such circumstances the Insurance Company will NOT pay out
You (or your forwarders) at not inconsiderable expense have to enter into prolonged correspondence with all parties concerned and try to establish fault. This is time consuming, costly and there is no guarantee of success
Due to the adversarial approach required above, relationships between customer, forwarder and/or road haulage suppliers can be aggravated or destroyed in the process
CMR cover is very limited in terms of the maximum pay out, so that even if a customer does get compensated they are often disappointed with the level of pay out which in some cases will be far less than the intrinsic value of the goods
If CMR does pay out on occasion, the earliest we have seen these payments is after 4 months, delays of several years are far from uncommon

The cost of transport, as are the cost of the goods, are payable whether the goods are lost or not. CMR cover does not cover this. Almost certainly you will have to have paid your forwarders and your factories well before there is any prospect of seeing a possible pay out under CMR. This can affect cash ñ flow, and because of the uncertain nature of the process needs to be shown in your books as a contingent liability.

What then can the prudent importer do to limit their liability and pass on the administrative burden and adversarial conduct vis a vis his suppliers?

Marine Freight/Transport Insurance

We recommend that you look into the option of getting marine/freight transport insurance cover. There are different types and levels of cover to suit every budget and scenario. Your Sales Handler can discuss your requirements in more depth and arrange a quotation for you. The industry standard is to accept an excess of £ 200, which ensures that small and frivolous claims dont get entered into and premiums are kept to a reasonable level, but you can vary this up or down depending on your circumstances and budget.

You could very well be surprised at just how little it would cost for the extra level of insurance.

Here are the benefits to having your goods properly insured:

Provided the goods have been adequately packed, there is no concern as to apportionment of blame.
1 simple form needs to be filled in. The surveyor (if required) is not acting in an adversarial way towards you. Little or no further correspondence required.
Relationships are maintained in good humour as no one worries about the consequences if there is not pay out.
Freight insurance can cover additional costs such as freight, import duties and taxes, the cost of the insurance itself and incidentals and even a 15% hassle factor uplift. The pay-out (less excess of course) will be for the amount insured as declared by you.
Insurance pay-outs take on average 2-3 months. Often the pay-out will coincide with the requirement to pay your factories and freight suppliers thus minimising cash flow issues.
Starting from a minimum cost of just £12.50 you can have the peace of mind, ease of claiming and the added knowledge that you do not have a contingent liability

If youre interested in investigating more about insurance please feel free to contact Neptune where we will be happy to help.