Liga Asuransi – The most important part of the coal trading business is the transportation of coal from the mine mouth, stockpile and mother vessel to the final location of the buyer’s stockpile. The means of transportation used can be in the form of dump trucks, light trucks, conveyors, barges, large vessels and others.
During the journey, coal stocks can experience accidents such as trucks overturning, overturning, burning, collisions and being looted by others which causes coal to be damaged, lost or shrinking. When coal is transported in rivers or at sea using barges or mother vessels, the risks that can occur include the consequences of the ship running aground, capsizing, burning, looting, spilling due to collisions with other ships.
One of the unique risks of coal transportation insurance is self-combustion. What is meant by self-combustion is a fire that occurs automatically from within the coal itself during the journey. This is due to the nature of coal that can burn itself because it consists of flammable substances. This risk often occurs, therefore this is one of the reasons why insurance companies are less interested in guaranteeing new stone transportation insurance.
To overcome losses due to the risk of coal transportation, an insurance policy is needed that can guarantee all coal transportation from any location to the final destination location anywhere in Indonesia or anywhere in the world. For this reason, a special transportation insurance guarantee is needed called Marine Open Policy (MOP).
Based on our experience of more than 30 years of handling various shipping insurance risks, here are some things that new stone traders need to pay attention to:
- Ordinary Marine Cargo Insurance Policy Is Not Enough
Because the risks faced by the transportation of new stone are complex and special, therefore the ordinary transportation insurance policy or ordinary Marine Cargo Insurance is not suitable. Because it does not include a guarantee due to a fire on coal as a result of self-combustion or burning itself during the journey.
- Institute Time Clause – Coal Clause (ITC Coal)
In order for coal transportation insurance to cover the risk due to self-combustion, the form of insurance is the Institute Time Clause – Coal Clause. This guarantee can not automatically be obtained from the insurance company, only if there is a special request.
- Marine Open Policy (MOP)
For trading companies that already have large volumes of transactions and shipments of coal every month or every year, they need to make a Marine Open Policy program. The benefits of MOP, premiums are more competitive, administration is simpler, guarantees apply automatically and a stronger bargaining position in front of insurance companies.
- Use of Transport Equipment (ships and trucks) according to standards
Because the MOP guarantee applies automatically, there are several conditions that are agreed upon before the MOP policy is issued. One of them is regarding the use of ships and trucks for each coal transportation. Insurance companies require that the means of transportation used must be in good condition, seaworthy, have valid and valid documents. In addition there are also limitations regarding the age of the ship, the size of the DWT and others. As long as these requirements are followed, the shipping insurance guarantee applies automatically.
- Shipping value for each shipment and estimated volume in 1 year
The thing that is also a consideration for insurance companies is the shipping value for each shipment. The amount is in quantity, for example in tons and then the amount is in dollars or rupiah. Insurance companies will use this number to measure the level of risk that can occur if an accident occurs on a ship. If all coal cargoes are damaged, the insurance company will replace the entire cargo. The amount of shipping volume in one year is also important for insurance companies to calculate the estimated potential risk and premiums they will receive compared to the risks they face.
- Insurance Guarantee Applies Automatically
One of the advantages of MOP is that the guarantee applies automatically. Compare insurance coverage one by one. Each shipment must be reported to an insurance broker, then the broker makes placements with several insurance companies. After getting it, then the insurance broker sends an offer and if it is approved, then the insurance guarantee is issued. Now imagine if the delivery is on a holiday, brokers and insurance companies close eventually there is no insurance coverage! Well, with MOP all these problems will not happen again.
- Simple administration
With the MOP, the insurance policy does not have to be issued every time there is a shipment. After the MOP is approved, a master policy or master policy will be issued for the agreed period, for example one year. For each shipment, a certificate of insurance will be issued, usually in a single document. Premium collection is made based on the certificate of insurance. Likewise, if there is a claim, the document is based on the same document.
In conclusion, coal transportation is a high risk, therefore transportation insurance coverage is an important requirement. Unfortunately it is not easy to get the best insurance coverage, competitive premiums, extensive coverage including institute coal clause and simple administration. The solution is with MOP.
Because the insurance company that can provide this guarantee is limited, to get a quality MOP you need the help of an insurance broker company with experience in coal transportation insurance.
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This article is sponsored by:
Liberty & General Risk Services (L&G Risk Insurance Broker), an insurance broker with more than 15 years of experience and focuses on handling insurance for the Business and Corporate sectors. L&G Risk focuses on the business and corporate sectors because this sector requires a special level of expertise in the insurance sector because apart from being an insurance broker or insurance broker, we also act as experts in risk management of a type of business.
For the safety of our clients, L&G Risk is registered with the OJK and we always report all our activities and are also supervised by the OJK.
We have successfully handled various clients and claims with different types of insurance, including Marine Cargo Insurance, Mining Insurance, Coal Mining Insurance, Construction Insurance, P&I, Bank Guarantees and Surety Bonds.
To get the best insurance coverage, please contact L&G Insurance Broker immediately. Insurance broker with more than 15 years of experience. Registered with the Financial Services Authority and a member of the Association of Indonesian Insurance Brokerage Companies (APPARINDO).
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