Transport Risk

Only the wrong doer has to pay is not foolproof in the logistics chain. Freight forwarders, NVOCCs, feeder operators, warehouse/depot/terminals, truckers, and the like are often held liable for loss of and damage to cargo which they do not handle themselves but subcontract out down the line.

Nightmares keep coming back once a claim is started. Time, money, and goodwill and hence future business of a transport operator are at stake. Think about how time consuming it would be like in dealing with claimants, recovery agents, adjustors, lawyers, and court proceedings. These risks can be transferred or minimized by a good transport liability insurance. Time saved can be used for more productivity.

Transport Liability For Freight Forwarders

Third Party NOT in HBL can sue

A Forwarder was sued out of the blue in 9 court cases for misdelivering 14 shipments (respectively from Taicang and Shanghai to Los Angeles) to the consignee without presentation of original HBs/L. The total claim amount involved is USD698,087.20.

The misdelivery was done by the Forwarder’s agent in Los Angeles without the Forwarder’s knowledge. The Forwarder’s agent at first alleged that the cargoes were not misdelivered but being stored in its warehouse. When the Forwarder’s transport liability insurer instructed its surveyor to try to arrange survey inspection and investigation to verify the quantity and condition of the cargoes in the warehouse, the Forwarder’s agent became uncooperative, and argued that all the cargoes were disposed of. The transport liability insurer thereafter instructed its Xiamen lawyer to defend the 9 court cases. The plaintiff in these court cases alleged that it was the cargo owner, despite it was neither the shipper nor actual shipper. Up to now, the Forwarder won 5 court cases in the Shanghai Maritime Court (上海海事法院), but pending appeal by the claimant in the Higher People’s Court of Shanghai Municipality (上海市高級人民法院). The remaining 4 court cases in the Wuhan Maritime Court (武漢海事法院) are still in progress.

Lesson: The Forwarder has avoided the huge amount of survey fees and legal costs involved as it got back up by transport liability insurance.

Forwarder Liability

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Warehouse Operator Liability

Warehouse Fire case

A fire accident in October 2007 outside a warehouse damaged 4 cases of medical equipments. The cargo owner claimed for cargo damage of EUR230,000 against the Hong Kong warehouse operator and brought the claim to the High Court of the HKSAR. With strong legal back up by the warehouse operator’s transport liability insurer spending HKD1,300,000 in the Court to defend, the cargo owner finally accepted EUR65,000 (all inclusive) as out-of-court settlement of the claim.

Lesson: This is a classic case where warehouse operator could clearly see the difference between with and without insurance. Apart from financial exposure, the time involved in the claims is 55 months.

A Timely Insurance could be a firm's Elixir;

Your Success protection is just a proposal form away!

72 coils steel Fell Overbroad Feeder

In November 2011, two vessels collided; one being a feeder with full load of stainless steel sheets from Huangpu to Kaoshiung. 69 coils of stainless steel sheets fell overboard. The potential claim against the feeder operator was USD760,000. Sea carriage is perilous; to operate without insurance is to tread on the thin wire.

Lesson: Take out liability insurance, leave the financial and time burden to the insurer.

Feeder Liability

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Depot Liability

Personal injury case in Container Depot

A depot operator caused injury to a trucker in its depot in 2007. The trucker sued the Depot for the common law damages. The employer of the trucker sued the Depot for the recovery of Employee’s Compensation claim paid to the trucker (together with the legal costs incurred by the trucker and his employer) under the Employee’s Compensation Ordinance. The total claim amount was nearly HKD1,000,000. The two court cases were amicably settled at around HKD600,000 plus legal costs of HKD200,000. The depot operator needed only to bear the policy deductible of HKD80,000. The insurer paid about HKD1,400,000, inclusive of the legal costs to defend the two court cases.

Lesson: While the money involved is not a small sum, the total time in handling the case to conclusion was 54 months. This time saved for the operator would mean many revenue generating activities being made possible.

A Timely Insurance could be a firm's Elixir;

Your Success protection is just a proposal form away!

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