Industry Insights

Freight Contracts Modified to Meet Ebola Exposure

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Freight Contracts Modified to Meet Ebola Exposure

Trade associations within the shipping industry are changing their freight contracts to lower loss exposure for companies transporting cargo or traveling to countries affected by Ebola. The new contracts are designed to protect crews from contracting the virus and can lead to rerouting, delays and quarantines in port.

Intertanko, an association whose members own most of the global tanker fleet, has implemented an Ebola clause in its contracts stipulating its members’ ships will seek alterative ports of call should a risk to the health of the crew be identified. Charterers would be liable for costs should a vessel have to be quarantined.

Some shippers, however, are taking a simpler route, Reuters reports. The contracting parties have in some cases taken a war-risk clause and substituted the word “Ebola” for the word “war,” Intertanko’s general counsel Michele White told the news service. Such simplistic amendments could lead to ambiguities and liability disputes, she said.

BIMCO is treating the issue more generally. The world’s largest global shipping association of owners and brokers is introducing a new contractual clause that won’t specifically address Ebola. The goal is to have a generic charter-party clause that has “a long shelf life,” a BIMCO official told Reuters.

No matter the contract language, Ebola-based claims could be difficult to assess since adjusters may be restricted from the site of loss due to disease transmission concerns. If contracts are vague, assignment of liability for losses could be convoluted and lead to legal disputes.

At Roanoke Trade, our professionals can help you understand how your contracts affect your insurance protection, and we can help ascertain if you are being asked to take on liability that your insurance policy doesn’t cover. While the health and safety of crews is paramount, all your exposures to loss should be dealt with in a comprehensive risk management and insurance program. Our insurer partners offer loss-control programs, and our own advisors can help you find shipping insurance that enhances your commercial loss protection.

We invite you to learn more about us, our experienced talent in this highly specialized area, our creative solutions, and the value we will bring to you and your clients. Please contact us at 1-800-ROANOKE.

 

Source: Business Insurance

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