Preliminary Review Of Claims – Basic Observations

While keeping in mind that an early notification to your liability insurer is essential, there are some basic procedures that can be taken upon receipt of a claim from shipper or consignee. It is pertinent to note that there could be situation in which the claim could not be entertained or it could be a case in which liability may attach. A brief outline of various considerations upon receipt of claim is as follows:
You may decline claim from any shipper or consignee when:

�� Shipment is not made on your Company’s Bill of Lading (B/L). In case your Company is the appointed agent, and not the B/L issuer, you may direct the claimant to the respective B/L issuer, or you may direct the claim on the claimant’s behalf.

� Shipment is released on a clean Delivery Note (D/N) and when no other notification (including the claim) is made within 3 days of taking delivery.

� Claim is lodged after the legal time bar. Usually upon a lapse of a calendar year after shipment was delivered or per the time-bar limit stipulated in the B/L Terms and Conditions, which provide for a 9-month duration if it could prevail over the 12-month limitation. This would depend on the circumstances of loss or damage.

� Loss or damage to FCL cargo packed and counted by shipper.
You may need to review/process claim when:

� Damage/loss is identified when cargo is still under your Company’s or appointed Representative’s care or you have performed a CFS function for the cargo during which damage/loss was identified.

� Shipment is on your Company’s B/L.

� When there is evidence pointing to possible negligence on your Company’s or appointed Representative’s part in handling the shipment. In processing the claim, the following should be observed:

� Determine the identity of the claimant whether consignee, shipper or any other rightful party or authorized representative of the cargo owner.

� Obtain all supporting documents related to the claim, such documents to include B/L, commercial invoice, packing list, stuffing and devanning reports, independent survey report (if available), ocean/master BL (if there had been an incident involving the vessel), delivery note and copies of all correspondence.

� To immediately notify the liability insurer (through corporate HQ) upon receipt of claim or other notification of loss or damage. Early notification gives the opportunity for prompt appointment of surveyor (if necessary) to provide independent assessment and determine cause of loss or damage. Such prompt notification is essential to ensure compliance with policy condition and securing policy indemnity. Breach of policy condition due to late notification will give the insurer the right to deny liability ie decline to compensate you on the claim which you have to pay to the cargo claimant. Early involvement of insurer is also highly beneficial in that the claim would be under the professional handling of the insurer’s claim personnel.

� If the incident giving rise to the loss or damage was the result of some other party’s action or omission, you would need to send an immediate notification to this party of your intention to counter claim or seek a recovery for the claim that was made against your company.

� In all correspondence with the claimant or any party having a right to claim against you for loss or damage, it is essential to include the term “Without Prejudice”. Never admit liability or acknowledge any responsibility for the loss or damage, even if the circumstances could clearly lay the blame on you. An admission or acknowledgement of your responsibility will constitute a breach of policy condition and allows the insurer to decline compensation to you.

� Finally forward the claim to your HQ without delay.