Claim case sharing
If my buyer goes out of business, what can I do with regard to cargo insurance?
With the global recession and the fear of a financial tsunami, companies are going out of business every day. And as trade slows down, many companies are moving closer to commercial crisis. In this economic climate, how can you avoid a trading loss with regard to cargo insurance?
If your buyer closes down, it almost certainly means there will be no consignee to collect the cargo at the discharge port. In these circumstances, you should inform your cargo insurer immediately if you decide to return or re-route your cargo to another destination. The cargo insurer will usually agree to extend the original cargo insurance to cover the additional voyage, allowing you to save time and save on the premium by not having to arrange new insurance cover.
What happens if your carrier goes out of business? In situations like this, it could be difficult to locate your cargo and, in extreme cases, the vessel may even be detained by local authorities against debt repayment, especially if the carrier had serious financial problems. You could end up spending a long time claiming back your cargo and, at worst, your cargo could disappear altogether. It is for these reasons that you are advised to contact your cargo insurer with immediate effect. A responsible cargo insurer will offer you advice and assistance to expedite the process of claiming back your cargo as well as minimising any loss.
Although “insolvency” is excluded by Institute Cargo Clauses, you are still advised to inform your cargo insurer immediately if you encounter any of the situations described above in order to minimise any loss.