Press Room

Reasons and Benefits to arranging Cargo Insurance – 28.2.22

Monday 28^th of February 2022

Dear Valued Clients,

Over the past several weeks there have been several industry events highlighting the importance of checking/updating your cargo insurance:

• Vessel – Felicity Ace – Containership Fire damages nearly 4,000 vehicles onboard – 25/2/22 – Click link here
• Vessel – Marcos V – Container collapse with 26 X 40ft Containers lost overboard – 21/2/22 – Click link here
• Vessel – Zim Kingston – Containers start to wash ashore after 109 containers lost in October – 23/2/22 – Click Link Here

Given the current set of circumstances occurring in Europe over the current Ukraine crisis; it is critical you speak with your insurer or your NEOLINK Customer Operations Coordinator to understand your coverage.

Listed below are some vital reasons why importers and exporters should arrange cargo insurance on all your goods:

• As an Importer/Exporter you may be responsible for all loss and damage during the entire voyage, even before delivery, e.g. under FOB Incoterms an importer is responsible from the time the goods are loaded aboard the vessel.

• Where there is a cargo loss, the Importer/Exporter in most instances will be claiming against the shipping line or air carrier, which can be very time consuming and…….

• Air and Sea Carriers can limit their liability under international conventions. For example, Hague Visby Rules provide a limit of: the greater between 2 Special Drawing Rights (SDR’s) per kilo of the cargo or 666.67SDR/package. As of February 2021, 1 SDR=AUD1.85 and freight forwarders across the industry carry the same terms/conditions around liability.

• Cargo insurers will generally provide prompt and full payment for damaged/lost goods where an insured event has occurred and are not concerned with liability issues in relation to other parties.

In the event something incurs outside of an importers/exporters control, cargo insurance can generally cover you for all of the liabilities or additional costs incurred – example NEOLINK Customer Case Study below:

CASE STUDY – UK FOOD IMPORT ON BOARD EVER GIVEN – SUEZ CANAL BLOCKAGE

On the 23^rd of March 2021 the Ever Given blocked the Suez Canal for 6 days with 20,000 TEU containers onboard, which was being leased to and managed by Evergreen Marin shipping.

Due to the blockade the Suez Canal Authority (SCA) estimated there was more than $900M USD in compensation required due to the blockage and seized by the court on the 13^th of April 2021. SCA cut their claims down to $600M USD after the rejection of the previous claim by the ships owners and insurers was rejected, eventually settling for an undisclosed sum on the 7^th of July 2021 and departing on the 12^th of July for Rotterdam after a delay of more than 100 days.

Evergreen shipping passed/attempted to pass on all of the additional costs/compensation to their customers equally across the 20,000 TEU’s of which a number did not have insurance or refused to ultimately pay abandoning the goods to the shipping line. On board this vessel was 10 containers for one of NEOLINK’s customers that was fortunate enough to have cargo/marine insurance that covered for all costs incurred and after a 100 day delay received their goods for no additional cost except for standard charges due to their coverage and paying the excess on their insurance.

So what options do you have for arranging Cargo insurance?

1. NEOLINK can arrange 1 off insurance quotes on a per shipment basis and can vary in price depending on the goods/coverage with our insurance providers.
2. Speak with your own insurance provider about including Cargo/Marine Insurance in your overarching business insurance policy – in 99% of instances this is the most cost-effective way of arranging cargo insurance. NEOLINK RECOMMENDATION

If you are looking for an insurance provider that specialises in Marine/Insurance cargo to speak to directly about setting up your own policy, please let us know and we would be happy to recommend or refer you on.

If you have any questions relating to Cargo insurance, please speak directly with any of the NEOLINK team.

Best regards,

NEOLINK Marketing Team