Directors: L. Swanne, T.R. Crowe MC, H.B. Sidey MA
Your Ref: Our Ref: Ml-C 167932 Date: 28 October 20—
Mr T. Shane
Excelsior Engineering PLC
Dear Mr Shane,
I have now received our assessor's report with reference to your claim CF 37568 in which you asked for compensation for damage to two turbine engines which were shipped ex-Liverpool on the SS Freemont on October 11, for delivery to your customer, D. V. Industries, Hamburg,
The report states that the B/L, No. 553719, was claused by the captain of the vessel, with a comment on cracks in the casing of the machinery.
Our assessor believes that these cracks were responsible for the casing weakening during the voyage and splitting which eventually caused damage to the turbines themselves,
I am sorry that we cannot help you further, but the company cannot accept liability for goods unless they are shipped clean. See Clause 26B of the Policy.
Points to remember
1. Insurance is designed to cover a business or individual against risks such as loss, damage, or injury. Numerous types of policies are available to offer cover against eventualities, but the client has to decide which hazards apply to him.
2. Assurance is concerned with offering benefit payment either to dependants, in the case of death or incapacity, or in the case of endowment schemes, a lump sum or pension after a number of years' contributions.
3. Indemnification is the cover which allows compensation in the event of loss or damage, and is calculated on the market value or depreciation value of goods, not their original value. To be insured, a client completes a Proposal Form; the premium is then assessed and quoted, in the UK, in pence percent. On acceptance, the client is issued with a cover note which gives him cover until the policy is ready. As insurance is based on the principle of good faith, and supported by laws against fraud, insurance companies accept that the items being insured belong to the client, are not being insured more than once, are of the value stated, and that the client will follow the conditions of the policy.
4. Marine insurance offers shippers a variety of policies to cover shipments. However, most exporters ship under an all-risk, valued policy which covers them against most eventualities and allows them compensation for loss or damage, plus ten per cent.
5. Open cover and floating policies are used when the exporter makes regular shipments. These give him a total amount of cover which decreases as each shipment's value is declared, but can be renewed.