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How freight insurance can protect you
17 April 2021
The Ever Given was refloated on Monday, 28th March, ending the week-long blockage of one of the world’s busiest marine waterways with billions of dollars’ worth of cargo affected, amongst them food stuffs, raw materials, automotive parts and Amazon orders.
The longer term impact on global supply chains has become clear with shippers worldwide affected.
The vessel’s owner has since declared General Average as a result of the cost of salvage operations and a huge potential claim looming from the canal authority.
Meanwhile, the vessel is now anchored at the Bitter Lakes Area for technical inspections, with no clear indication as to a possible date of departure to ports of discharges, impacting shippers further.
Meanwhile, the vessel is now anchored at the Bitter Lakes Area for technical inspections, with no clear indication as to a possible date of departure to ports of discharges, impacting shippers further.
What does ‘declaring a General Average’ mean?
General Average is a principle of maritime law, which means all stakeholders in a sea venture proportionally share any losses resulting from incidents at sea including expenses occurred during the voyage.
In the case of the Ever Given, this could include more than $1 billion in damages the Egyptian authorities have announced they will seek to recover. This would cover equipment used to free the ship, the hundreds of people that worked to free the ship and the loss of canal revenue. It also implies an obligation for shippers to pay a bond on cargo interests before containers can be released from the ship with the exact costs expected to take some time to determine.
How can GA impact you?
Shippers without appropriate insurance cover will be vulnerable to losing their cargo altogether if they do not pay the required cash bond. Those appropriately insured will have their insurance cover these costs..
How to protect yourself?
We can arrange comprehensive Marine Cargo Insurance on a shipment-by-shipment basis. The cover is Institute Cargo Clauses “A” providing excellent cover. General Average is covered as standard, as are loss and damage.
Request details of insurance cover when seeking either a shipment quote or when booking a shipment. Alternatively, if you would like to discuss further, contact our insurance team for a free consultation here.
*All insurance requests must be made and agreed in writing