Insurance
Asian Freight have
obtained liability insurance policy to protect themselves
against the risks arising out of MTO operations. Basically
the coverage is towards the liability to parties affected
during the course of operations. However, insurance is not
all embracing and can be precisely said to cover the following:
-
Loss for or damage to cargo occurring during
the policy year as a result of Breach of Contract or in
common law where liability arises under MTO documents.
-
Liability to third parties by reason of liability
imposed upon the insured by law and/or assumed by the
insured under the Insured’s Contract. The loss of
life or bodily injury, 3rd party property damage including
3rd party cargo.
-
Cost and expenses involved in re-routing of the
cargo to the correct destination including any professional
negligence, error or omission on the part of the insured
and/or their agents.
-
Liability to Authorities like Customs, Port Authorities
for any breach of regulations which can even lead to fine
and penalties being imposed by the authorities.
Claims arising under
the Liability Insurance Policies particularly under B/L contracts
will have to be supported by evidence of negligence on the
part of the insured before a claim can be considered. Further,
under MTO documents sub-contracting is allowed and therefore
even a sub-contractors will be involved in the claims procedure
particularly to establish whether there is any negligence
attributable to them which will enable the Liability Underwriters
to take recourse to recovery from such sub-contractors under
their own documents which may be a normal ship owners B/L,
or a road transport receipt or railway receipt. The insured
accordingly will have to protect the recovery rights of the
liability insurer in all cases where the negligence on the
sub-contractor’s part is established by evidence. The
Liability Insurance Policy is a contract of pure indemnity
and therefore it does not guarantee all claims that arise
unless such claims are established under the contract. Under
the MTO of Goods Act and under MTO documents the time limit
for taking legal action against the MTO is 9 months only. |