Ships’ agents not obligated to insure their cargo – Insurance Expert
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March 7, 2017
Ships’ agents not obligated to insure their cargo – Insurance Expert

by Chanolde Munroe

Shippers who did not insure their personal effects or goods lost on the MV Persia II last Friday, may not be eligible to receive compensation from the boat’s agent.

One such person is businessman Calvin Llewellyn who told SEARCHLIGHT on Monday that when the boat went down, it was carrying a pallet of food containers for him, worth EC$10,000.

Llewellyn disclosed that he had not insured the goods as he had never done so in the past when he used the motor vessel.

“…We didn’t insure the goods and we basically finding out that the boat does not insure these goods either, but we didn’t know that from before,” he added.

Llewellyn noted that when he used other cargo vessels to transport his goods, he is usually given a contract which outlines the insurance terms and conditions.

“But…down in Trinidad when you go on the dock to ship on Persia, especially you just basically dropping your stuff off, they give you a piece of paper and that is it. They don’t even give a contact like… [the MV] Admiral and so on. Admiral gives a contract and states certain things about what they are insured against and so on….”

However, SEARCHLIGHT spoke with an insurance expert who explained that there is no requirement for agents/owners of boats to insure their cargo.

“It’s optional. Most of them don’t, because it’s usually up to the customer who owns the goods to insure it from A to B.”

The expert further explained that while the agents/owners of boats cannot be held accountable for not insuring the goods transported, they can be held accountable under a term known as ‘near negligence’.

“Let’s say I have the boat and you have the goods to be shipped and you ship them on my boat, I don’t have to insure them…in the same way that if you rent my house and you bring in your own furniture, I don’t have to insure [the furniture].”

“…But if I’m sailing along in my ship and I decide to take a short cut and in the process I go through some incredibly rough seas, or I run onto a reef or something and your goods get damaged, then that is through my negligence and I can be held accountable for that. So [agents] wouldn’t be held accountable for insuring them,” he added.

The insurance expert also explained that if a cargo boat is insured it automatically gets liability insurance, however this usually does not extend to goods on the boat.

“When you have boat insurance, automatically you get liability insurance for the same value as the boat is insured for. Your boat is insured for… $100,000 in addition to the boat insurance, the third party liability is $100,000. But that’s usually not for things on the boat. It is more for what they call collision, hitting other people, outside the boat,” he explained.

All may not be lost for some of the shippers however.

Llewellyn told SEARCHLIGHT that he was informed by the shipping agency yesterday that while nothing can be done about the smaller packages, something would be “sorted out” for the larger items of cargo.

He said while the loss of his goods had set his business back by a about a week, it would not deter him from going forward.

“I wouldn’t say it set back the business because I ain’t going make that stop us from going forward with the plan that we had,” he said.

SEARCHLIGHT reached out Peter Ollivierre of Island Wide Shipping, agent for the MV Persia II, but he declined to comment, instead directing us a a release issued last Friday.

In that release, Island Wide said they were in the process of notifying customers who lost cargo as a result of the incident. They thanked the Grenada coastguard for saving the lives of all the crew members on board.

The MV Persia II, which plies its trade between Trinidad, Grenada and St. Vincent on a weekly basis, sank off the coast of Grenada on Friday around 10:15 am.

All the crew members were saved, however all the cargo went down with the motor vessel.