Transportation Claims

We refer to the Cargo Insurance Contract No: 398/08 that was signed between Iceland Pelagic and Tryggingamiðstöðin hf with effect as from 1st July 2008.

The people to contact at Tryggingamiðstöðin when loss occurs or claims are made are:

Sveinn Ingvarsson
Telephone +354 515-2113 / E-mail
GSM +354 863-6491
Fax +354 515-2075

Thorleifur Ragnarsson
Telephone +354 515-2123 / E-mail
GSM +354 863-7421
Fax +354 515-2050

Bjarni G. Bjarnason
Telephone +354 515-2134 / E-mail
GSM +354 861-0524
Fax +354 515-2050

As part of our agreement we hereby give you the main points that should be considered when transportation losses occur.

We would also like to draw your attention to how the main working procedures should be conducted regarding any claims.

Before continuing any further, however, it is necessary to look at what kind of Insurance Conditions are applied to shipments that are insured in accordance with the Cargo Insurance Contract No: 398/08.

The Insurance Conditions of the English Institute Cargo Clauses:

–          Institute Cargo Clauses (A).

–          With 24 hour breakdown clause.

–          Institute War Clauses (Cargo)

–          Institute Strikes Clauses (Cargo)

–          Institute Classification Clause

–          Institute Radioactive Contamination Exclusion Clause

–          Termination of Transit Clause (Terrorism)

Insurance coverage begins with the actual transit, i.e. removal of the insured goods from supplier’s/assured’s premises or other storage area, while in transport to the shipping agent. It remains in force on the normal transit route, ending with the arrival of the insured goods in the recipient’s premises or in another final storage area at the destination further specified in Article 8 of the Institute Cargo Clauses (A) Section 8.1.3. 

The amount insured

The amount insured is based on CIF-value of the goods + 10%.

As from 1 September 2010 the amount insured in respect of goods sold to Russia is based on CIF –value of the goods + 20%.

No other items are added to the amount insured. There are no pre-paid taxes, customs duty or other public fees.

What kind of transportation losses or perils are covered by the conditions?

The paramount point to be considered is that the loss to the shipment has to occur during the route of transit.

Clause no. 1 in the Institute Cargo Clauses (A) states the following: “This insurance covers all risks of loss of or damage to the subject-matter insured except as provided in clauses 4, 5, 6 and 7 below.”

In such a short review as this one, it is impossible to list all the possible perils that are excluded in the conditions referred to in the above-mentioned clauses 4,5,6 and 7 in the ICC (A), but the main perils and losses that are covered include:

Main perils:

Stranding, Sinking, Collision, Breakdown of Containers, Floods, Extraordinary heavy weather, Fire, Theft, Barratry, Jettison, General Average.

Main losses:

Container washing overboard, Bad handling of goods in transit, Breakage, Denting, Water damage, Theft, Pilferage, Non- Delivery of a shipment, Thawing of frozen food due to breakdown of machinery or stoppage of refrigerating machinery(24 hrs).

The War and Strike Clauses cover losses that are due to incidents that are related to war and strikes.

We would like to emphasize that the Institute Cargo Clauses never cover losses or damages due to bad quality production of the goods, wrong quantity or delivery of goods, wrong delivery of type of goods, or wrong loading on pallets by the producer and the transport company, except as a consequence of a covered peril. 

Notification of Transportation Loss

When a buyer receives a shipment that is likely to have suffered a transportation loss it is imperative that:

 1.       The transporting company, shipping company or company making the delivery, is notified of the loss within 3 days from time of delivery. This is in accordance with the general terms of shipping: “If the notification is made within the time period, then it is the transport company that has the burden of proof, i.e. the transport company must show that the quantity and condition of the goods were in order at the time of delivery. If the notification is made after 3 days, the burden of proof is transferred to the receiver”.

2.       At the same time Tryggingamiðstöðin should be notified in order for the company to keep a record of the loss as from the beginning. The initial notification should contain as much information about the shipment and the loss as possible. With such information the insurance company can make a preliminary evaluation of the seriousness and complexity of the loss and determine whether specialist surveyors or other experts should be involved in investigating the case. With the initial notification to Tryggingamiðstöðin, it is also necessary to send a copy of the Bill of Lading and the Invoice.

3.       In cooperation with Tryggingamiðstöðin (the insurance company) and the seller, the buyer must immediately call a Survey Company and ask for a loss survey.

4.       When a shipment is received by the buyer in containers, or as a whole shipment from refrigerated vessels, the buyer has to check if the seals are on and if the temperature recorders are showing the correct temperature in accordance with the B/L, as well as checking if the quantity delivered is in accordance with the quantity stated on the B/L. If those items are not in order this should be notified in writing on the delivery receipt and a copy of it retained.

5.       The following provision is in accordance with Icelandic Law: “In cases of loss it is the duty of the insured to give immediate notice to the insurance company and to make every reasonable effort to minimize the loss or prevent any further loss from occurring.”

6.       Deductible or self retention borne by the insured in any one accident/loss is USD 1000.

Necessary information and supporting documents

The following documents and information should be enclosed with the formal claims letter to the insurance company:

–          Calculation of the claims amount.

–          Bill of Lading.

–          Invoice.

–          Receipt of delivery note from the transport company.

–          Survey report from recognized Survey company, e.g. Lloyd’ s Agents. The insurance company pays the survey cost.

–          Claim notification to the transport company.

–          Temperature records of the insured shipment during the transit.

–          Tally report from the cold store or the company receiving the cargo, including product code, producer code, quantity of units received, container number, seal number and serial number of pallets where applicable. The seal must be preserved until the claim procedure is completed.

–          Invoice from company handling the re-stowing or re-palletising of cargo that suffered loss.

–          Weighing note if applicable.

–          Contract of Charter party if applicable.

–          All other relevant documents, correspondence and evidence to support the claim.

It is of the utmost importance that all of the above-mentioned measures are complied with in order for a claim to be settled as accurately and promptly as possible.