Marine Cargo Insurance … Again

By Feb 28th, 2014 • Category: Rants

Again a shipping accident is in the news with the loss of over 500 containers from a ship sailing from Rotterdam to Sri Lanka.  The containers were lost in the Bay of Biscay.  For those whose cargo was insured, there was minimal loss.  But for those who cargo was not insured, there was major loss.  And not just for those whose containers ended up at the bottom of the sea (or on the coast of England).

Per the Rule of General Average, everyone who had cargo on that ship is responsible for the loss incurred by those cargo was lost.  So if your container remained safely on board the ship but you had no Marine Cargo Insurance, you would be responsible for a percentage of those who were also not insured but whose containers were lost.

The basic principle of the Rule of General Average: That which has been sacrificed for the benefit of all shall be made good by the contribution of all.

If you want to learn more on the Rule of General Average, see:

http://www.fd.unl.pt/docentes_docs/ma/wks_MA_20037.pdf

But most importantly, as the buyer, make sure your cargo is insured.  It is not the shipper’s responsibility to insure your cargo.

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