Hanjin collapse will mean complex headaches for marine insurance, Marsh warns

THE Hanjin collapse will result in a series of complicated headaches for the marine insurance secto, according to a new report from Marsh. There is “considerable concern througout the industry” as to whether all relevant parties are adequately covered, and particularly on whether additionally incurred forwarding costs are factored in.

Attention has been drawn to “Insolvency of Carrier exclusion” (Clause 4.6 of the Institute Cargo Clauses A, B, and C). the shipper must not have been aware, at the time of loading the goods on the vessel, that the carrier was in such a parlous financial state that could prevent the voyage from taking place. The buyers of goods under CIF type of contract of sale, where the goods have already been loaded on the vessel at the time of purchase, are exempt from this exclusion. In order to have a valid claim, any loss or damage would need to have been proximately caused by a peril otherwise covered under the terms of the policy.

The Institute Cargo Clause 9, titlted Termination of Contract of Carriage, on what happens if, during the period covered by the conract of carriage, the carrier becomes insolvent; Clause 12, titled Forwarding Charges, explains how expenses incurred should be handled go into further detail.

Marsh emphasised that the standard Institute clauses were often just a starting point, and numerous amendments, additions, and alterations to the terms and conditions apply on a case-by-case basis.