Making Early Notification Your Practice
In order to enjoy the benefit of insurance, early notification to insurer is a very essential procedure to be carried out. Late notification allows the insurer to deny liability, even though there may be no prejudice arising from such late notification.
Do not wait till the customer files a claim before notifying the HQ Claims department for purpose of insurance claim reporting if there were circumstances making an early notification essential. Incidents such as water in container, spillage of liquid cargo, an obvious accident involving the container, falling over of cargoes within a container, collapse of packages, detention by custom authority, cross shipments; all of these would require prompt notification to insurer. There are of course many other eventualities and if in doubt, do check with internal claims departments or HQ.
When an incident is reported in time, the carrier's insurer would be able to arrange a survey before the cargo is removed from container or released to the consignee. Appropriate finding of the surveyor would provide for suitable evidence of loss or information concerning carrier's liability.
Mitigation of loss is a fundamental requirement to be carried out by the party suffering the damage to cargo. This party would include carrier and its appointed CFS operator. With insurer being advised and having its appointed surveyor attending to the case early, mitigation of loss could be carried out under professional guidance of the surveyor, in situation of uncertainty..
If there is a late notification, an explanation is usually necessary in order to seek insurer's acceptance of the case. If there is a valid ground that permits insurer to decline any involvement, there will be no insurance indemnity for this late reported claim. Hence late reporting can create a huge financial burden in addition to likely loss of customer.
While insurer would not participate in the claim, there are some basic issues to determine in order to protect the carrier's own position, and these include:
- Is there any mishandling of the cargo while under the custody of the carrier and its appointed contractor (CFS or transporter)?
- What kind of loss mitigation procedure would be necessary and has this been carried out?
- Is there any commitment of liability whether directly or indirectly?
- Have all correspondence been qualified with the proper “without prejudice” remark?
Disclaimer – This is a generic guideline. Individual claim cases may involve specific circumstances, requiring different handling procedures. If in doubt, immediately contact HQ, for the appropriate guideline and action.
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