Written Premium

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Transportation Specialist Legal Liability for
TAFA members Presented by Lilian Seet, AVP,
Marine Manager Developed Asia 1 Feb 2005
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Agenda

• Introduction
• Scope of Services covered
• What does the policy cover?
• Policy limits deductible
• Other features of the policy
• Exclusions
• Premium
• Question Answer

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Introduction

• Incepted since Sept 1, 2004
• Currently insuring 36 TAFA members
• Premium is on an initial minimum deposit basis,
  subject to adjustment based on number of bill of
  lading issued as declared by insured on monthly
  basis.

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Transportation Specialist Legal Liability for
TAFA members

• Scope of services covered
• All activities of the insured arising from
  HBL/HAWB issued
• NVOCC
• NAOCC
• Insured operation in air/sea freight forwarding
  (inbound or outbound)
• Related activity in warehousing, trucking,
  packing, consolidation, custom agent
• Acting as a local agent for other freight
  forwarders

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Bill of Lading Liability

• Covers physical loss or damage to cargo arising
  out of issuance of an insureds Air, Ocean or
  Surface Bill of Lading. This cover will
• Defend you if you are sued
• Pay covered claim on your behalf
• Provide security for GA, salvage and salvage
  charges

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Bill of Lading Liability

• Loss Example
• An ocean consolidator issued a house bill of
  lading to transport a shipment from HK to Mexico
  City. The shipment consisted of 100 cartons of
  apparels valued at US250K. When the goods
  arrived in Mexico City, 25 cartons of the
  apparels were missing and the consolidator was
  held responsible for the lost merchandise. Per
  COGSA, the consolidator was liable for US12,500
  in damages (25 x US500).

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Errors Omissions Insurance/Financial Loss

• Covers consequential or financial loss suffered
  by insureds customers as a result of insureds
  negligence, errors or mistakes, such as
• delay of freight due to negligence
• misdirection or mis-delivery of freight
• improperly completed documentation
• negligent selection of an airline, ocean carrier,
  packer, subcontractor, etc

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Bailees Liability

• This section is provided for insureds
  warehousing trucking activities related to or
  incidental to freight forwarding operation.
• Covers physical loss or damage to property of
  others while in insureds care, custody /or
  control when either-
• in transit while in a vehicle owned/leased by
  insured
• at or within the warehouse premises
• handled by parties assigned by you but not in
  your care, custody or control

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Bailee Liability

• Loss Example
• Shipment of 250 cartons of childrens books,
  valued at US55,000 was temporarily stored in a
  forwarders warehouse. While the books were being
  transported from the warehouse premises, 10
  cartons were punctured by a forklift, damaging
  the contents. The forwarder did not issue a
  warehouse receipt for storage of the books and
  was, therefore, held liable for the full value of
  the damaged books.

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Packing Liability

• Covers damage to customers cargo as a result of
  insufficient packing, crating or container
  stuffing activities performed by insured or
  insureds subcontractors or agents.

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Packing Liability

• Loss Example
• A forwarder arranged for transportation of 32
  cartons of photographic negative film to the
  Netherlands. Due to the fragile nature of the
  negatives, the shipper advised the forwarder that
  the cargo had to be transported flat. The
  forwarder packed the cartons, but failed to mark
  on the exterior boxes that they must remain flat
  and upright. Therefore, the airline loaded the
  pallets on their sides, not upright, causing
  damage to the negative. The forwarder was held
  responsible for the value of the negative plus
  survey fee, totaling US20,500.

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Customs Liability

• Covers fines or penalties (customs duty, sales
  tax, value added tax or similar monetary charges)
  assessed against the insured by any regulatory
  agency for alleged or proven violations of
  transportation laws or regulations.

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Customs Liability

• Loss Example
• A forwarder/custom broker handled importation of
  sensitive goods to Singapore. The sensitive
  goods require special declaration forms to be
  completed and duties to be paid. Through a
  clerical error some of the goods were
  mis-classified by the forwarder and the
  appropriate duties were not paid to the customs
  officer for a period of time. When the error was
  finally discovered, the customs office imposed a
  fine on the forwarder, in addition to recovering
  the duties due on the goods. The total claim
  amount to US35,500.

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Third Party Liability

• Covers damages and costs resulting from
• accidental bodily injury
• accidental property loss or damage
• consequential loss from accidental bodily injury
  or property loss/damage.

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Third Party Liability

• Loss Example
• An ocean consolidator arranged for a shipment of
  heavy equipment to Germany. As the machinery was
  being loaded at the dock into a container, the
  cranes cable snapped and the container dropped
  onto a dockworker, breaking his leg and several
  other bones. The dockworker sued both the crane
  operator and the consolidator for S500K in
  damages.

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Policy is extended to cover the following goods

• Temperature controlled goods
• live animals
• Precious jewelry but subject to a limit of Baht
  4m
• Dangerous cargo (ocean cargo only) but subject
  to
• Requirements of current International Maritime
  Dangerous Goods (IMDG) code
• Insured is licensed and complies with the
  conditions laid down by the respective
  authorities in the respective countries where
  insured operates
• Deductible for the above is 10 of claim or Baht
  100,000, whichever is higher

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Policy limits

• General Limit
• Baht 20 million each claim/accident/incident
• Unlimited in the annual aggregate
• Except
• Errors Omissions Baht 4 million each claim
  in the annual aggregate
• Customs Liability Baht 2 million each claim in
  the annual aggregate
• Precious jewelry Baht 4 million each claim

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Policy deductible

• Baht 30,000 each claim
• Except
• Financial loss (EO) Baht 100,000
• Temperature controlled goods, dangerous cargo,
  live animals precious jewelry 10 of claim or
  Baht 100,000, whichever is higher
• If a claim involves more than one coverage, then
  the highest applicable deductible shall apply.

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Other features of the policy

• Territorial Limit
• Warehouse operation Thailand only
• Others Worldwide but excluding countries under
  US trade sanction laws (Afghanistan, Angola,
  Myanmar, Cuba, Iran, Iraq, Libya, North Korea,
  Serbia, Montenegro, Sierra Leone, Sudan, Syria,
  Zimbabwe)
• Jurisdiction Worldwide

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Other features of the policy

• Policy is on claims made form
• Claim is first made against the insured and
  reported in writing to Chubb during the policy
  period
• Retroactive dates
• 2 Aug 2002 for non-physical loss or damage claim
• 1 Sept 2004 for physical loss or damage claim
• Period of Insurance One year from 1 Sept 2004

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Main Policy Exclusions

• Damage to your owned, leased or rented property
• Unexplained loss, mysterious disappearance or
  loss disclosed on taking inventory
• Employee dishonesty
• Nuclear, radioactive contamination, labor
  dispute, war or terrorism
• Contractual Liability other than your
  standard/normal terms and conditions of service
  contracts, HAWB, House BL no wider than FIATA BL
  and insureds BLs vetted and approved by Chubb.
• Wrongful, wilful, knowing or intentional acts
• Pollution
• Political risks exclusion

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Premium

• Minimum and deposit of
• Baht 50,000 per annum for TAFA members
• Baht 62,500 per annum for non-TAFA members
• Adjustable premium rates
• TAFA members
• Baht 30 per BL for outbound cargo
• Baht 20 per BL for job order for inbound cargo
• Non TAFA members
• Baht 33 per BL for outbound cargo
• Baht 22 per BL for inbound cargo

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Premium

• Declaration is on monthly basis. Additional
  premium will be charged once the deposit premium
  is exceeded
• Condition precedent each insured to submit a
  complete application form to Chubb within 45 days
  from the policy inception date

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Other services

• Claims a set of claims procedure guidelines
  will be provided to all insured to guide you in
  claims handling.
• Claims to be reported to Thai Star Chubb
• Risk Management/loss control survey Chubb
  provide this as a value added service to our
  clients. This will help to identify your risk
  exposed operation, implement loss control
  measures, thereby reducing the incidence of
  losses.

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Going Forward

• We hope to be partner with you
• Deliver value in our service
• Underwriting
• Loss Control
• Claims

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Questions?