Marine insurance documentations hinders growth says Oladimaji

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 mrs Florence Oladimaji

From Benjamin a ameh, lagos

The entire insurance industry is facing cases of losses paid to cargo owners that are never recovered by the insurers after payment

THE role of insurance in the development and growth of the maritime sector can- not be over-emphasised.
 Specifically, through marine insurance, which seeks to protect against possible losses, ship owners, transporters, importers and exporters, among others can be sure of claiming damages when an accident is recorded.
  However, marine insurance according to experts is one of the trickiest insurance areas because of its strict emphasis on documentations.
 According to experts, when dealing with marine insurance, it is crucial that the ship’s captain, terminal operators and other stakeholders maintain unambiguous documentation as part of measures to facilitate prompt payment of claims.
They are of the opinion that water is the most complicated and controversial means of transportation when compared to road, rail and air because of several occurrences, which have the potential to harm cargoes and vessels.
 Speaking at a forum in Lagos, recently, terminal operators and insurance firms openly blamed each other over alleged poor documentations in the maritime sector.
  A communiqué issued at the end of the event emphasised the need for “integrity among all stakeholders to identify the point of loss, damage or delay in the event of claims and ensure prompt payment of claims”.
 The communiqué added: “Compel terminal operators to issue documents that will enable cargo owners to make full claim of their cargo losses from Insurers and also recognise Insurers’ subrogation rights to recover losses after payment”.
 But, terminal operators are of the opinion that due to the transit nature of ships, damages to cargoes take place outside the shores of Nigeria.
 Speaking from the perspective of insurance firms, Nigerian Insurance Association (NIA) appealed to the federal government to put adequate measures in place aimed compelling terminal operators to take responsibility for damaged or losses of cargo at their terminals.
 Besides, NIA argued that there is urgent need for the relevant government agencies to compel terminal operators to issue documents that will enable cargo owners to make full claim of their cargo losses from insurers and “also recognize insurers’ subrogation rights to recover losses after payment”.
Industrial And General Insurance (IGI) Plc senior manager in charge marine, Mrs Florence Oladimeji who spoke on behalf of NIA at the forum explained that as marine cargo insurers and underwriters, “we call on government to urgently look into the issues bothering on enforcing the rule for terminal operators to take responsibilities for losses of cargo at their terminals.
 Oladimeji also stressed the need to allow cargo surveyors’ unhindered access to the terminals to carry out what she identified as “the all-important duty of surveying the cargo and submitting their report of findings to insurers”.
 Explaining further, Oladimeji said: “A negligent party should not be allowed to get away with damaging cargo, deliver cargo short, break seals of containers, pilfer cargo and deny liability”.
 She added: “Also, that the terminal operators should be held responsible for the damages to imported cargoes because they refuse to open their gates for marine surveyors to inspect the extent of damage done to goods before they are cleared from the port.
 “If our appointed cargo surveyors do not have access to cargo at the terminals, it will be difficult for them to write reports that will enable underwriters settle the claim of the insured.

“We have so many cases of diversion, cross delivery and non-shipment of cargo, tampered container padlocks or container seals. Vessels easily discharge damaged cargo and sail away without documentations.
 “Documentation of the loss is very important for substantiating the marine claim. Letters of protest should be obtained as it is intended to bring the observed discrepancies on the cargo to the attention of the negligent party for their comment.
 “Experience has shown that where cargos are damaged at our ports either during discharge or while in the custody of the terminal operators, both never issue documents to indicates responsibility for such missing or damaged cargo”, said Oladimeji.

Oladimeji made reference to two instances recently where “a claim lodged by one of our insured which involved the loss of one 40foot container with goods worth N93million. The container was discharged into one of the terminals at the Apapa port. By the time the insured came to collect the container, it was nowhere to be found. The terminal operator could not account for the container and refused to issue any missing cargo document.
 “At the end of the day, we paid the insured a reduced claim of N78million because our right of subrogation has been denied by the terminal operator refusal to issue any document for the missing cargo”.
 On the second case, she said that the insured lodged a claim for missing coil to the tune of N53million.
 “The coil was discharged sound and complete from the carrying vessel. The coils were stored at one of the terminals in Apapa Port. When insured collected the coil, there were shortages. The terminal operator issued the delivery document noting shortages but denied that it occurred at their terminal. The insured presented the letter of claim holding the terminal operator liable for the loss but only got a letter denying liability.
  “We settled the claim but deducted some amount for prejudiced recovery.  The insured could not get their full claim, as we could not recover our subrogation right from the terminal operators
 “There are so many claims we have paid without the cooperation of terminal operators. We only cited these two as example of what we are facing in handing cargo losses at the terminals.
  “The losses we are facing run into millions of naira. Losses to insurers and the cargo owners are huge. We are only looking at just a particular company case as an example. The entire insurance industry is facing cases of losses paid to cargo owners that are never recovered by the insurers after payment
  “Also, the terminal operators should be held responsible for the damages to imported cargoes because they refuse to open their gates for marine surveyors to inspect the extent of damage done to goods before they are cleared from the port.  

“If our appointed cargo surveyors do not have access to cargo at the terminals, it will be difficult for them to write reports that will enable underwriters settle the claim of the insured.
 “We have so many cases of diversion, cross delivery and non-shipment of cargo, tampered container padlocks or container seals. Vessels easily discharge damaged cargo and sail away without documentations.
 “The regulatory authorities should compel terminal operators to have proper liability insurance cover and such insurance policies be submitted to shippers council for scrutiny for adequacy of cover and proper wording.
 “The NIA will be available to assist if required. We recommend that CDF/Shippers Council should have billboards at the port offering assistance to cargo owners. Compel terminal operators to have insurance claims/information desk to assist cargo owners.
   “Insurers, surveyors, terminal operators, shipping agents and all stake holders in maritime operations should all be seen as partners in progress ensuring that our ports are involved in international best practice”, Oladimeji added.
    She told the gathering that marine cargo insurance occupies an important position in international trade, adding that while it is primarily concerned with the protection of ocean-going cargo, it also covers against the hazards associated with connecting land conveyances as well as shipments by rail or air.


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