Shippers Cannot Rely on Carrier’s Coverage
Can We Talk Claims?
Relying on carrier’s coverage is not a risk
worth taking
A recent decision in September 2023 judgment of the London High Court in JB Cocoa SDN BHD & Ors v Maersk Line AS [2023] EWHC 2203 (Comm) further supports shippers need for All Risk Cargo insurance. Relying on the carrier’s liability coverage could leave shippers “out to sea”, especially when there is delay in taking delivery of the cargo after discharge.
A payment dispute between the cargo seller and buyer caused discharged cargo to unexpectedly spend six weeks at the container terminal before being released to the buyer. Upon delivery to the buyer and opening the containers, the contents sustained mold damage due to extensive moisture. A claim against the carrier resulted, alleging the carrier had failed to properly care for the cargo during the ocean voyage. The court held that the carrier was only liable up until the point of discharge, per the Bill of Lading, and there was no evidence to prove the damage occurred prior to the point of discharge.
This decision confirms the carrier’s obligation under a bill of lading ceases on discharge and the onus is on the consignee/receiver of the cargo to take delivery as soon as possible. In this case, the buyer was indemnified because they did have All Risk cargo insurance. The claim against the carrier, which failed, was a subrogation claim by the insurer. Had the shipper not purchased cargo insurance, they would have been likely subject to the same ruling and therefore suffer a complete loss. Kudos to the buyer for purchasing cargo insurance! This certainly supports why cargo insurance is extremely important.
“This is a prime example of why it is important to purchase All Risk cargo insurance. Carriers limit their liability under their Terms & Conditions of service. Therefore, All Risk cargo insurance is truly the only way to protect your shipments.” Greg Horun, Vice President, International Bond & Marine Brokerage LTD
Cargo Insurance is a low-cost option to protect your high-cost investment. We can help provide this necessary coverage.
Contact us at marine@intlbondmarine.com today!
JB Cocoa SDNBHD & Ors v Maersk Line AS [2023] EWHC 2203 (Comm) (05 September 2023)(bailii.org)