IB&M COVID-19 Response to Customers and Industry Updates
As COVID-19 continues to have an impact on the trade community, IB&M stands with our clients and partners to ensure consistent service during this difficult time. We will continue to underwrite and approve bonds as well as insurance requests without interruption.
Call for Tariff Relief
The Trump administration has brushed aside calls to put broad import tariffs on hold though some targeted concessions are likely to be considered such as medical supplies and household essentials that are in great demand. Read the full WSJ article with a subscription.
CBP March 2020 Bond Insufficiency Notices
CPB has announced granting a 10-day extension for the termination and replacement of bonds found to be insufficient and for which notices were issued with a due date of March 21, 2020. Read the full bulletin here.
Force Majeure is a common clause in contracts that essentially frees both parties from liability or obligation when unforeseen circumstance beyond the control of the parties, such as a war, strike, riot, crime, or an event described by the legal term act of God, prevents one or both parties from fulfilling their obligations under the contract.
It is important to understand that marine insurance provides coverage for loss or damage to cargo from an external cause. The impact of the Coronavirus will most likely be from the delay, non-delivery, and/or re-routing of cargo where there is no damage. Most policies will include a Deviation Clause. This clause states that coverage will not be vitiated by any deviation, change of voyage or any other interruption of the ordinary course of transit from a cause beyond the control of the Assured. Therefore, cargo will continue to be insured for physical loss or damage. As always, it is important to review and understand your policy.
We have only seen a small change in the amount of bond increase demand letters received from CPB over the last few months. We encourage customers to monitor the sufficiency of your bonds using our saturation reports and proactive tools to keep you ahead of the game.
Also, as supply chains are further strained, review contracts you have in place with customers to make sure you haven’t entered agreements that may be tough to fulfill. Our E&O markets have resources to assist you with contract reviews. Please don’t hesitate to reach out to your local IB&M representative.