In case of loss or damage to goods (falling under this policy), the insured and/or their agent should immediately notify the insurance company (notice of loss) or the insurance agent mentioned in their policy and provide the insurance company or the agent the full details of the loss.
An insured and his agent/agents have the responsibility to take reasonable measures to ensure that there is no loss or limited loss or damage to the goods by perils stipulated as per the policy and act as if the goods are uninsured. This is generally called the insurable interest in marine insurance. All rights against bailees, carriers and/or other third parties should be exercised and preserved by the insured and/or his agents.
Read More: What is not covered Under Marine Insurance?
In terms of the condition of the goods/packages, the following should be respected and followed by the insured and/or agents:
- A call for insurance survey before delivery on the packages should be done if the ship survey is time-barred
- Obtain an insurance survey by the Insurance Company if upon unpacking loss or damage to the goods is found even though on delivery the packages were found in good condition.
- All packing materials along with its contents should be kept intact by the insured and/or agents for proper inspection and assessment by the surveyors
When an insured finds missing packages or goods he or his agents should lodge a formal claim to the shipping company and also the bailees for the full value of the missing packages/goods and get a written acknowledgement for the missing packages/goods from them.
Case Study: 1
A tanker had loaded petroleum in UAE from a mother ship for export ashore. Upon testing of ‘first foot’ samples, it was found that the flashpoint of the cargo showed some possible contamination with some residues of the previous cargo of petroleum. It was found that about 800 tonnes of cargo were contaminated and due to which the consignment was rejected by the buyer.
Also, it was extremely difficult to dispose of the contaminated cargo. Here, though the company that owns the tanker, J.J Ship, had a marine cargo insurance policy, the insurer refused to settle the claim. The problem was with the tank cleaning, and J.J Ship had been unable to carry out the tank cleaning properly.
Just because J.J Ship has a marine insurance policy, it doesn’t mean that the company can act sloppily. In this case, the company loaded petroleum without paying attention towards the tank cleaning, and as a result, the consignment got contaminated.
Case Study: 2
In 2010, T.J Fashion bagged a large contract for exporting fashion garments, including mens’, womens’ and kids’ apparel to some Western nations. Before dispatching the consignment, the packaging team of T.J Fashion scrutinized the packaging and later allowed the consignment to be sent. It took nearly ten days for the consignment to reach the destination.
However, at the time of unloading, the buyer found that some boxes were wet and damaged. Due to this, the buyer suffered loss worth Rs 10 lakh and filed the case against T.J Fashion.
As T.J Fashion had a marine insurance policy, they approached the insurer. However, they got a major blow when the insurer refused to settle the claim. Though the packaging team of T.J Fashion had scrutinized the consignment, it had acted carelessly and did not pay heed to the poor quality of the boxes. As a result, the boxes were not able to withstand the weather conditions and got damaged.
In this case, T.J Fashion had certainly bought a marine insurance policy. However, the company acted recklessly and did not take proper care before dispatching the consignment.
Just because the company has a marine insurance policy, it doesn’t give them the right to act hastily. The marine insurance policyholder must take all necessary steps to curtail losses and should act as if the goods are not insured.