Liga Asuransi – Dear readership, how are you? Let’s continue our discussion on risk management and insurance.
This time we will discuss freight forwarding insurance (Marine Cargo Insurance), especially the need for a report from the Independent Marine Surveyor (IMS) for the completeness of insurance coverage.
Along with the increase in business activities after COVID-19, the volume of activities in the logistics sector also increased. The number of deliveries and the value of the goods transported today is increasing quite sharply.
Why do insurance companies ask for IMS?
For your information that one of the challenges in marine cargo insurance is if the value of the goods being transported is high and the ship used is not safe from the point of view of insurance.
For risks like this, usually, the insurance company is not interested to insure it, and if they want, they will require an IMS report to ensure that the shipping risk is in accordance with the shipping requirements.
Usually, the owner of the goods objects to this IMS requirement because there will be additional costs and also time to conduct a survey which causes delays in departure.
As your consultant, the insurance broker will try to get insurance approval in the absence of IMS, but if the value of the goods is too high and the condition of the ship is not good, honestly it is difficult to avoid this request.
Therefore, it is expected for the cargo owner or forwarder to take care of this IMS before the departure date to ensure that there is insurance coverage attached during the trip.
It must be admitted that with the needs of IMS there will be additional costs, but when compared to the consequence of not insuring the goods, the cost of the IMS is worth nothing.
For cargo owners or logistics companies that often transport goods in large sizes, for example with a value above USD 1,000,000 and using LCT, Tug, Boats, and similar ships, make sure that in your freight forwarding budget, IMS costs are included in addition to the cost of insurance premiums.
IMS is not only useful for getting insurance coverage but also for your peace of mind that the delivery of goods has been done well in accordance with standards and procedures.
What Is an Independent Marine Survey?
Marine Surveyors assess the readiness of the ship to carry out an operating pattern objectively and can provide recommendations to the insurance company and the owner of the goods if a discrepancy is found based on the provisions followed.
Marine Surveyors are also responsible for all assessments including recommendations given professionally with full integrity to achieve the purpose of using the ship including shipping safety.
Who takes care of IMS and how much does it cost?
The person responsible for managing and paying the IMS fee is the owner of the goods or forwarder/logistics appointed by the owner of the goods.
The cost of IMS depends on the size of the cargo and the ships; therefore, we suggest you find it yourself surveyors that are known to you or by searching on the internet.
5 Reasons Why Insurance Companies Ask for IMS?
As we have informed above that the insurance company has certain requirements and limitations in providing insurance guarantees for each delivery of goods.
Here are some reasons why:
- What is the Limit of insurance capacity in anyone’s ship?
Most insurance companies have a limit on the number of cargoes in one shipment. This means that not all goods loaded inside one ship can be covered by one insurance company. For example, the maximum amount of cargo that can be covered by insurance for anyone ship is USD 1,000,000. If the total load is USD 2,000,000 then the remaining USD 1,000,000 cannot be covered by the insurance company (uninsured).
But they can cover such overloads (access load) on the condition that a “satisfactory independent marine survey (IMS) is available.”
- What Kind of Ship Is Used?
The insurance acceptance capacity for Marine Cargo insurance is influenced by the type of ship, the age of the ship, weather, voyage, and others.
For the type of cargo ship (ocean-going) the average acceptance capacity of the company is quite high and usually, they can cover up to a relatively high amount for example up to USD 25 million anyone conveyance and no IMS is needed.
In the eyes of insurance, the level of safety and security of cargo ocean-going ships is much secured so that they can cover in large quantities.
But for other types of ships such as LCT, Tug, and Barge, the acceptance capacity is smaller, and the coverage requirements are also limited. For example, the maximum value that can be covered is limited to USD 250,000 for any one shipment.
Similarly, with the age of the ship, the higher the age the smaller the capacity, and even for ships with older age for example over 25 years old they are not willing to cover.
But they may consider providing assurances there is an IMS survey.
- What Kind of Cargo is transported?
As we know that the types of goods transported have different risks. Cargo in the container is much safer and the insurer must be interested in covering it. But for other types of cargo such as machinery, construction equipment, steel structure, chemicals, coal, and others have a higher risk.
Insurance companies will consider covering it if there is more complete information in the form of IMS.
- Past Claims Experience
If you as the owner of the goods have experienced a claim for shipping insurance before, it will be a material fact to be considered by the insurance company. They will be more careful and needs a special approach to convince them to ask for an IMS.
- Voyage – where to go?
The route of travel also affects the level of risk. If the ship passes through an area known as an area with large waves, it is prone to storms, there are often ship collisions and others. It will also affect the attitude of the insurance in receiving the transportation insurance guarantee.
Kenapa Anda Perlu Memilih Perusahaan Pengiriman (forwarder) Terbaik?
Ingat, perusahaan yang Anda pilih harus fokus menjaga alat berat Anda dalam kondisi baik di semua tahap transportasi. Mereka juga harus memiliki profesional logistik yang tahu apa yang perlu terjadi setelah peralatan mencapai tujuannya dan menghindari risiko pembongkaran.
Pengiriman alat berat tidak sama dengan pengiriman barang umum. Ini membuat prosesnya lebih rumit dan lebih mahal.
Selain itu, semakin banyak risiko yang ada, semakin banyak pengaturan yang perlu dilakukan untuk ensure your equipment does not suffer damage before or after reaching its destination.
The main duties of the Independent Marine Surveyor are as follows:
- Checking the state of the goods to prepare, deliver or receive the merchandise in question, so that everything proceeds in accordance with the means and conditions – contractual provisions, one and another in order to avoid disputes arising due to deviations to the contract by one or both parties concerned.
- Checking the facilities and/or equipment used in the process of handing over and receiving merchandise such as storage/warehouses, weighing / measuring/dosing tools, conveyances, and so on.
- Presenting reports in the form of information to the cargo owner who gives tasks in the form of written reports or certificates regarding the state of goods and treatment of the safety of goods including at the stages of movement of goods.
- The report is used by both parties as an auxiliary document if a dispute arises.
An IMS is usually appointed by the Cargo Owner, but it can also be appointed by the cargo recipient, the owner, the insurance company, or other stakeholders in the industry.
Its duties vary from determining the actual cargo loaded on board the ship or checking the condition of the cargo as loaded/dismissed. He also asserted that the loading of cargo is carried out in accordance with the law and is within the limits that can be loaded.
The safety of the ship is also ensured at times that including the moments involved due to cargo shifts that can make the ship unsafe during the voyage.
What are the Jobs of an Independent Marine Surveyor?
A cargo surveyor inspects the cargo of an ocean liner to declare compliance with national and international regulations in cargo handling and storage. His job responsibilities include:
- Loading Method Used
- Regulations need care
- Knowing the capacity of the ship, and writing a report of the findings
- Take photos and document the findings to generate a report.
- Read the ship’s document establishing cargo loading and securing procedures, capacity, and stability factors to ensure the cargo’s capabilities are in accordance with cargo design and regulations.
- Calculate the durability capacity, volume of fuel and water stored, cargo weight and ship stability factor, using standard mathematical formulas and calculators
- Analyze the data obtained from the survey, and formulate recommendations relating to
- Issuing a certificate of compliance for cargo that passed the inspection.
- Recommend procedures for fixing compliance problems.
- Make sure that the cargo manifest corresponds to what was shipped.
- Check cargo at docks, and freight stations. etc. and assess the previous condition
- Check the cargo on the ocean liner to ensure that the relevant cargo handling regulations have been followed.
- Check the cargo loaded and secured in the trunk and whipped onto the deck.
- Check the condition of the cargo and see if the marking & packing is right
- Check cargo handling devices, such as booms, hoists, and derricks, to identify
- Certification of cargo and packaging in accordance with health and safety
- Determine whether the cargo in the trunk can proceed to its destination.
- Measure the handle of the vessel and the depth of fuel and water in the tank, and read the draft mark
How to get the Best Marine Cargo insurance coverage?
The best way to get Marine Cargo insurance is to use the services of an insurance brokerage company that is experienced in the field of freight forwarding insurance.
An insurance broker is an insurance expert who is on your side. Insurance brokers help you to design an insurance program that suits your needs and puts it to several insurance companies to get maximum coverage.
In the event of a claim an insurance broker who will help take care of the settlement, you can simply provide the necessary information.
One of the experienced insurance broker companies in Indonesia is L&G Insurance Broker
Sources:
- https://en.wikipedia.org/wiki/Marine_surveyor#:~:text=Independent%20marine%20surveyors%20are%20often,if%20they%20impose%20surveyor%20requirements.
- https://dgt.gov.in/sites/default/files/Cargo_Surveyor.PDF
- https://www.viamar.ca/5-easy-tips-to-prepare-heavy-equipment-for-shipping/
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