Taking Control of Your Goods
"My suppliers insure the goods"
If you think your supplier is insuring the goods free of charge , you're mistaken. They are paying to insure and are probably passing on this undisclosed cost to you - in their invoice! As regards the cover, where purchasers require the supplier to insure the goods on their behalf, minimum obligations may see the goods insured to the UK port/airport only, not to their premises (e.g. Cost, Insurance & Freight (CIF) terms). Sellers are not obliged to provide comprehensive insurance, and this leads to possible uninsured losses.
Then there's the financial security of the insurer. Not all countries demand the same level of financial security from their insurers as the UK, and this could result in unpaid claims.
What about service? Who will advise and help you pursue a claim? Will a delay in settlement affect your cash flow? What if you have to deal with an overseas insurer? Just when your business is suffering the disruption of goods not arriving or being damaged, you may have to deal with another time zone, culture and language. A significant benefit of you insuring via a specialist broker is that you are the client and your broker acts for you.
"I leave it my buyers to insure the goods."
Why not make life easy for your buyer? If you include marine insurance in your sales package, your customers will thank you. If your competitors offer this service and you don't, you may lose business. Further, if you arrange the insurance, it can be tailored to your needs and those specific to your customers.
If the goods arrive damaged, who will your customer complain to? You! Your customers may have basic insurance but why should they risk increased premiums when they can pursue a claim against you? They may push you to supply a replacement at cost, meaning that you've worked twice for one profit, that your first shipment is uninsured and you've made a loss on the whole transaction.
"If there is a loss or damage, the carrier will pay in full."
This is unlikely. Most carriers operate under conditions which restrict their liability and impose time limits for notifying and quantifying claims. The majority of carriers in the UK operate under RHA conditions which restrict liability to £1.30 per kilo. A similar situation applies with international transits, where an International Convention applies.
"My carrier insures the goods for me."
Only if they have the facility to do so and only if you have specifically requested insurance. Can you be sure that adequate insurance is in place at a reasonable premium? Do you receive a policy or a summary only? Most importantly, carriers who arrange insurance are no longer required to be authorised and regulated by the Financial Services Authority.
For more information please contact us.