Training - What Do I Do?
 

How Do I Handle This Problem?

 

Step-By-Step Answers to Your Questions
 
-- My client is shipping USED goods but wants to insure them.  What do I DO?

     This is always a challenge.
     Our automatic Lloyd's Internet system asks you at the bottom of every Certificate Request Form if goods are New or Used or Reconditioned to As New condition.
     USED GOODS are allowed to be covered under the limited ICC Cargo Clauses C Only unless with specific and prior approval of Underwriters each and every time or unless they are reconditioned to "As New" condition.
     An explanation of what ICC Clauses C covers and EXCLUDES (and what all insurances cover) is here: >CLICK<
  SUGGESTION: It is not required, but IF your pre-shipment survey notes, for example, minor damage, rust or other defects in the goods being shipped, take a picture of the damage. That way, if, upon delivery, the item(s) are seriously damaged, you can show the Surveyor and Claims office that much more damage was done during transit. Do this for all scratches, dents, defects or damage. This eliminates chances for misunderstandings.
 
Why do we limit coverage of USED goods to Clauses C only in the automatic system?

     We would gladly insure goods under a broader coverage than only Clauses C if we could be sure of the condition of the goods before they move.
     In case of a claim, USED goods pose special problems.
     Underwriters have no way of knowing that the USED goods you are moving are in pristine condition when you accepted the shipment and placed the insurance... or that any damage was not already done to the gear.

     For example:

  1. Was the dent in the fender on the used vehicle when you accepted it for movement?

  2. Did the used computer (or machine) work when it was tendered to you for shipment?

  3. Are there independent Survey or Warranted reports that there was no "mechanical derangement" before shipment?

  4. If there are no independent surveys proving the goods were in working order, how do we know they were and this is not a fraudulent claim?

NOTE: A definition of "mechanical derangement" is available in our detailed list of Ocean / Transport / Insurance terms - quick link to the "M" section here:  >CLICK<
 
 What can you do?

  1. Explain to your Shipper the limitations of Clauses C.

    • If the truck/conveyance arrives fine but the goods are damaged, there is no coverage.

    • If the truck turns over (or ship runs aground or plane crashes) and damage is a result of this, a "Covered Peril," then there IS insurance for damage under Clauses C.

  2. Offer to have an independent surveyor warrant the goods in working order.

  3. Complete a detailed pre-shipment report detailing any imperfections in the goods before they move... consider taking pictures to document minor damage on the goods as noted above.

  4. Contact Underwriters with a Special Project request for special rates and terms for these USED goods.

  5. Issue the Certificate under Terms & Conditions and rate as agreed with Underwriters for this Special Project - BUT keep in mind: If a part on a two-year-old used machine were damaged in transit, it is possible the Claims Office would only pay for the value of that damaged part in its used condition, NOT for a brand new part to replace it.

  6. Protect yourself by documenting all correspondence with the Shipper about what is and is not covered.
 
Why are we being so careful?
     Two words... Caution... Experience.

  • CAUTION: We want to protect you from potential problems, and USED goods offer more potential problems than NEW goods.

  • EXPERIENCE: You'd be amazed how many claims for damages we see that miraculously just happen to total up to the amount of the insurance and freight. Sadly, there are some people who are not trustworthy. By making sure you and Underwriters have proof of the condition of USED goods before they are moved, we know when any damage might have occurred.
 

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Are Your Existing Providers Helping You Like This?
     At Allcovered we provide information and training, through documents like this one, our weekly newsletter and other methods.
     It is our way of helping you stay ahead of your competition and grow your business.
     We hope you agree that we go much farther than our competition in our service to you.
     We want to earn YOUR business.

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Contact Us

Debbie Miller
Customer Service - Allcovered.net
Ocean Marine Division; Allen Insurance Group
Voice: +1.478.825.5566 Ext. 108
E-Fax: +1.419.715.4723
Email: debbie.miller@allcovered.net

Last Updated
06/08/2009 02:13:52 PM

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