Any analysis of marine insurance claims involves answers to questions of cause of loss or damage and quantification which means assessment of loss or damage and quantification, which means assessment of loss or damage which constitutes the claim. if the cargo or part it is lost or missing evidence wii be sought from the carrier or port authority , as applicable. under nearly form of marine insurance policy , there are circumstances in which the claim paid or payable by the insurer is reduced by an amount which may be recovered from some source, from the point of view of the insurer, recovery of claims from carriers play an important part in reducing the ultimate claims ratio and thus important the underwriting balance. it is of utmost importance, therefore that recovery prospects are carefully examined and pursued vigorously with due diligence.
Duty of the Insured
In case of any loss or damage to the cargo, it is a duty of the Insured / Consignee / Its Agent or Representative to take following procedures
1. Do no give clear receipt on the delivery order but to give such notice of loss or damage
2. In case of containerised cargo:
– Check carefully condition of the containers if it was damaged or holed.
– Check carefully condition of its seal if numbers is matched with the document or if it was damaged or cut.
– If it was found damage, Give such notice of loss or damage on the delivery order.
3. Immediately contact the carriers or its representative to do survey.
4. Immediately contact THE INSURANCE COMPANY to do joint – survey.
5. Immediately notify Police in case of traffic accident, theft or other malicious acts.
6. Take photographs showing details of container, its seal and numbers, its floor, wall and roof where it was damaged and condition of the cargo.
7. Write claim to the carriers holding them responsible for loss or damage.
There are two categories of total loss:
■ Actual Total Loss (commonly referred to as an ATL)
■ Constructive Total Loss
Actual Total Loss
An ATL occurs usually when the property insured
■ destroyed, or;
■ so badly damaged that it ceases to be a thing of
the kind insured.
Survey & Claim Reporting to THE INSURANCE COMPANY
Claim shall be reported immediately to THE INSURANCE COMPANY or Its survey agent in order to have the damage inspected to conclude the cause of loss or damage. Claim reporting shall not later than 7 days from the time loss or damage noticed.
It is a duty of the Insured to give THE INSURANCE COMPANY or Its survey agent an opportunity to inspect the damage, vessel, interview with the master and crews and other related parties.
1. It is a duty of the Insured / Consignee / Its Agent or Representative to mitigate the loss and secure the salvageable cargo safe, do not destroy or sell them without THE INSURANCE COMPANY’s written approval.
2. THE INSURANCE COMPANY for and on behalf of the Insured have a right to sell on tender the salvageable cargo and invite some buyers to quote.
3. The Insured or Consignee can participate on the above tender.
4. Terms and condition of the tender and to choose the winner are absolute right of THE INSURANCE COMPANY
5. Value of salvage is to be paid to the Insured and is to be deducted from amount of claim payable.
In case of GA the Insured / Consignee / Its Agent or Representative is not authorized to sign Average Guarantee or to pay cash deposit without THE INSURANCE COMPANY’s written approval.
such losses are inevitable and are not covered. bagged cargoes suffer some losses due to seepage through the bags, liquid cargoes are subject to evaporation or absorption by the casks foodstuffs may suffer from natural loss in weight through “drying out” during the transit . such natural losses are called trade ullage and are deducted from the claim amount payable . the percentage deducted depends upon custom . in the absence of any customary deduction an excess which may range from 1 to 3 percent is imposed to exclude ullage losses.
SURVEYS ON DAMAGED GOODS
the purpose of a survey is to establish the case of loss and to assess fairly the degree thereof. to a large extent, this depends upon the experience and efficiency of the surveyor and in case of damage the surveyor needs to have an understanding of the special characteristics or properties of the goods he is called upon to deal with and to be familiar with the treatment which may be necessary to minimize loss.
The situation is no different in cargo insurance. When cargo is lost or damaged through the fault of a third party, the owner of the cargo has an initial choice to make which is whether to claim on the insurance or to make a claim on the wrongdoer. Depending on the choice, either the owners, or the insurers after they have paid a claim.
As above, it is usually the Assured in the first instance who is the party entitled to claim against the third party wrongdoer. The situation changes as soon as the insurer pays a claim under the policy in respect of the loss which is the subject of the claim against the third party. , where interest is included in the recovery, the Assured is entitled to receive all interest accruing to the period prior to the date the insurer paid the claim. the Assured is entitled to the proportion of the interest received which attaches to any deductible or other uninsured loss. It is doubtful whether these rules are consistently followed in practice.
Pursuing the recovery
Some insurance companies have their own dedicated recoveries departments. Many will
outsource this work to outside agencies such as legal firms or recoveries specialists. Many
Lloyd’s Agents undertake recovery actions for their clients. Those Lloyd’s Agents that do handle
recovery actions need to have a sound knowledge not only of law and practice in their local markets
but also the main provisions in contracts of carriage used internationally.
It has always been considered commercially desirable to allow shipowners to limit their liability
for claims (except in extreme circumstances). Were shipowners to face completely open-ended liability,
most would find it commercially impossible to trade. The Hague and the Hague-Visby Rules embody this
principle in two ways: by providing for a maximum amount the carrier will have to pay for loss or
Breaking limitation “Neither the carrier nor the ship shall be entitled to the benefit of the limitation of liability provided
for in this paragraph if it is proved that the damage resulted from an act or omission of the carrier done
with intent to cause damage, or recklessly and with knowledge that damage would probably result.”
Limitation on time
If loss or damage is apparent before or at the time of the cargo owner taking custody of the goods, the owner should immediately notify the carrier or the carrier’s agent in writing. The general rule is that the party seeking an extension must be a party to the Bill of Lading or have the right to act for that party. Sometimes the ship-owner or other carrier is reluctant to clause a Bill of Lading as it may lead to objections from a bank that has issued a letter of credit on behalf of the shipper.
The Hamburg Rules
The carrier is liable for loss resulting from loss of or damage to the goods, as well as from delay in
delivery, if the occurrence which caused the loss, damage or delay took place while the goods were
in his charge as defined in article 4, unless the carrier proves that he, his servants or agents took all
measures that could reasonably be required to avoid the occurrence and its consequences. This was largely as a result of pressure from cargo interests and smaller trading nations which felt that the existing regimes were weighted in favor of carriers.
Some rules relating to Bills of Lading
A)The Bill of Lading is prima facie evidence that the carrier has received the goods exactly as described. The carrier can, subsequent to issuing the Bill of Lading, challenge its accuracy if they become aware of some inaccuracy that was not apparent at the time of issuing it.
B)Once the carrier or their agent has taken custody of the goods, they must, if the shipper
demands it, issue a Bill of Lading for the goods.
This has to show:
■ The leading marks as shown on the goods or their packing.
■ Either the number of packages or pieces, or the quantity or weight.
Claims against road carriers
Claims against road carriers are most likely to be dealt with under the laws of the land of the carrier
and the particular conditions of carriage that apply. In Europe the situation is different, as any road
carriage that crosses an international border will normally be subject to Convention on the Contract for the International Carriage of Goods by Road. THE LEGEL RIGHTS, LIBILITIES AND REMEDIES IN RESPECT OF CARRIAGE OF GOODS BY ROAD DEPEND PRIMARILY ON WHETHER THE CARRIER CONCERNED IS A PRIVATE CARRIER OR A PUBLIC CARRIER. it is open to a common carrier to enter into a special contract departing from his usual business and engaging in a different type of business, to carry a consignment of goods as a private carrier. in such an event for that particular carriage the carrier is considered to be a private carrier.