MARINE: Insurance: Luxury Or Necessity
Recent Western Cape Business News
INSURANCE is very often regarded by many as a necessary evil or even a grudge purchase. There is a perception that the insurance industry often looks for ways not to pay claims and relies on the small print in insurance policies to try and avoid paying claims. It is also regarded as expensive, for which one often does not see a ‘return’ (unless one is unlucky enough to suffer a claim).
Despite these perceptions, insurance remains an important means of protecting ones assets, even more so in an economic downturn. The fishing industry is not immune to the global economic crisis and vessel owners and producers in the industry need to ensure that they have adequate insurance in place. So says Grant Fugard of Alexander Forbes Risk Services in Cape Town.
Even the best managed fishing operations can suffer major losses that are beyond their control and whilst a suitable risk management programme can sometimes prevent or minimise the impact of these losses, the end result can place severe strain on the business.
A number of major events / claims in recent years have highlighted the need for adequate marine insurance to be in place. Some of these were :
• The stranding of two fishing vessels in Table Bay as a result of engine failure and severe storms. One vessel was a total loss whilst substantial costs were incurred in salvaging the other.
• An injury to a crew member on board a vessel necessitated a diversion of the vessel to enable a safe discharge of the crew member by helicopter to receive immediate medical care and attention.
• A fishing vessel was involved in a collision with a bulk carrier at sea, causing damage to the carrier and resulting in the sinking of the fishing vessel. Fortunately the crew was rescued and there was no loss of life nor serious injuries.
• The well publicised break up of the MSC Napoli off the English coastline resulted in the loss of the vessel itself as well as numerous cargo losses world-wide, some of which were insured and others not.
• Deterioration of fresh fish due to the delayed departure of a flight following technical problems with the aircraft resulting in a lower sales value for the product being realised.
Fugard says marine insurance is specialist by nature and those connected to the fishing industry need a professional advisor (broker) to guide them in purchasing the right cover for their particular needs.
A specialist marine broker will undertake a proper evaluation of the risks and exposures and use its expert knowledge in placing the cover correctly. “This is not only vitally important in the settlement of claims, but will also go a long way towards securing the most suitable cover at a cost effective price,” says Fugard.
Fugard says AFRS is the leading broker in South Africa and not only has a wealth of experience and depth of resource but consequently has the distinct advantage of specialising in certain industries due to it‘s extensive client base.
In the Western Cape, AFRS boasts the largest specialised marine division in the region offering numerous services with the ability to arrange cover for hull, machinery and equipment, protection and indemnity, ship repairers liability, catch and crew personal accident. Also included is cover for exports, imports, inland transit and aquaculture.
The company also has a non marine specialist area that focuses on, amongst others, assets, general liabilities, product liability, warehouseman’s liability and product recall. Included also are product guarantee, stock in process, storage of goods, nets on land or in transit and deterioration of stock.
AFRS says it deals with most of the major players in the fishing Industry and has strong relationships with marine insurance markets both in South Africa and overseas to the benefit of it‘s client‘s.
“AFRS has over the years learned to listen to our clients, getting to know what makes them different and establishing what goals they have in mind. AFRS then designs and delivers solutions based on a genuine appreciation of the commercial realities facing clients. Our solutions are aimed at providing a real competitive advantage in an increasingly overcrowded marketplace,” says Fugard.
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