Correct and prompt action in the first instance will save inevitable frustration of delay, possible repudiation of claims, or unsatisfactory settlements. In the event of a claim, the consignees in conjunction must take the preliminary steps with the surveyors nominated by insurers. Insurers will make the decision as to whether an assessor will be appointed to investigate the loss on their behalf. It is therefore imperative that any potential claims are reported to your claims manager / brokers / insurers as a matter of urgency so that the claims can be managed properly.

1. Loss Notification
One must remember that the first port of call is your insurance broker or claims advisor. The brokers, in turn need to notify the insurers of the incident. Insurers will then make the necessary decisions as to whether or not to appoint a surveyor for the loss. However, it is ultimately the responsibility of the insured to take the necessary steps to protect their rights of recourse, and for that matter, those of the insurers. Without this, the insurers are likely to dispute and possibly even reject claims presented to them. There are certain notification periods and procedures that need to be adhered to, in order to secure a claim and these will be discussed below.

Once a discrepancy has been detected, then it is imperative that your insurers are notified of the variance. A typical example would be a discrepant seal on a container or a hijacking or theft. This will then allow insurers to appoint a surveyor to make an independent report on the status of the consignment and what was unpacked. Under no circumstances should unpack of a discrepant consignment commence without the necessary authorisation of insurers.

Remember that you have certain periods within which your insurers need to be notified. Typically, these periods are from a matter of hours for hijackings, to a number of days or even weeks for damaged consignments. However, the basic rule of thumb should be: “IMMEDIATE NOTIFICATION OF A LOSS NO MATTER WHAT THE CIRCUMSTANCE”. This usually prevents one from falling foul of the various warranties that may be in an insurance policy.

We would recommend that you adopt the following basic claims procedure:

1.1. Once a discrepancy has been noted, collate as much information as possible regarding the consignment including the following basic criteria:
1.1.1. Endorse the delivery note as per the detail below;
1.1.2. Confirm the type of commodity;
1.1.3. Nature and extent of loss (including estimated value of loss)
1.1.4. As many shipping and commercial documents as possible relating to the consignment

1.2. Notify your claims manager / insurance broker / insurers of the loss giving the basic details above as soon as possible, preferably within 24 hours of the loss occurring or it coming to your attention;

1.3. Lodge pro-forma claims on responsible parties as per the detail below, again preferably within 24 hours of the loss occurring;

1.4. Wait for instructions from your broker / assessor / insurers as how best to proceed with managing the loss;

2. Appointment of Surveyors
Assessment of losses is a crucial part of any claims management process. Assessors are normally well versed in what is required for various types of claims. However, as with any business, there are various specialists within the industry and it is essential that the correct party be employed for the job at hand. In normal circumstances, it is the insurer’s responsibility to appoint of assessors. In other instances, the appointment of an assessor is governed by the terms and conditions of the insurance certificate covering the consignment. We recommend that the appointment of a surveyor be considered in conjunction with your insurers and insurance broker.

3. Protection of Rights of Recourse

3.1. Endorsement / annotation of waybills / delivery notes etc.

Although a generalisation, it is common nature for parties to attempt to hide damages in an attempt to avoid any liability for damages or losses that they have caused. Ignorance and poorly trained receiving and despatching staff exacerbate the problem. The usual excuse is that the driver will attempt to get you to sign the delivery note / waybill as he is “pressurised for time” and needs to make an urgent delivery. This is not the receiver’s problem. Take the necessary time to check the consignment properly and endorse the waybill / delivery note for any damages that may be apparent.

DO NOT, UNDER ANY CIRCUMSTANCES MAKE AN ENDORSEMENT ALONG THE FOLLOWING LINES: “CARTONS TORN AND SQUASHED – CONTENTS UNCHECKED / CONTENTS MISSING / QUANTITIES MISSING – DETAILS UNKNOWN” These types of references only describe the outer state of the package and not what is missing or damaged inside. The contents are the important detail.

The following types of endorsement are far better: “2 CARTONS RECEIVED TORN, SQUASHED AND WET – CARTON NO 1, 3 X PART NO ABCDEFG MISSING, CARTON NO 2, ENTIRE CONTENTS WET AND RUSTY” Be specific.

Endorse any comments you make on the actual delivery note / waybill, not on an attached sheet. Attached sheets always seem to go missing further on down the track and it is difficult to prove that the endorsement relates to the delivery note / waybill in question. By all means, compile the data on a separate sheet, but summarise the information on the delivery note. Make sure that a copy of all received notes is kept for inclusion in any claim documentation.

Note that an endorsed waybill is proof that you received the cargo in a damaged condition. If you don’t do this, it is possible that someone will say that the loss did not occur during that particular course of transit.

3.2. Pro-Forma Claims

Lodge Pro-Forma claims on all parties that may have been responsible for the damages. It is a requirement of most trucking firms and shipping lines that written notification is presented to them within a specific period. Verbal notification is not acceptable. Such Pro-Forma claims should be lodged as soon as possible, preferably within 24 hours of damages being noted or becoming aware of such a problem.

Normally a Pro-Forma claim will include a number of basic items, which are summarised below:
· The document must contain a description of the cargo and the damages or shortages recorded;
· An estimated value of the loss;
· Details of the shipment such as waybill numbers, insurance certificates, hauliers name etc.;

4. Collation of Information

4.1. In order to make your life a lot easier, we recommend that a specific claim file be opened for each and every claim that arises. The basic rule is that all documentation, reports, statements, correspondence is stored in this file. Then when the insurance surveyor calls to obtain the necessary documents, they are all in the same place and easily obtainable. You will be called upon, on numerous occasions to provide various documents pertaining to the loss, and it will be far easier to manage if they are all in one place.

4.2. Record what documents are given to whom, particularly when it comes to original invoices, bills of lading etc. At least you will be able to prove who was given the document;

4.3. Keep notes of telephone conversations. These are particularly helpful in assisting you when arguments do arise in a claim;

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