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VEXING
indeed is the task of determining the type
of insurance needed in Russia, writes Alexander
Petrenko, head of Moscow's Panditrans' liability
and marine cargo insurance department.
As
the London-based maritime insurer TT Club's
partner in Russian, Mr Petrenko set out
to explain how one navigates the reefs and
shoals of Russia's rocky insurance shore
at the recent Trans Russia Conference in
Moscow.
Horror
stories abound. There was the theft of 16
containers with electronic goods moving
from Finland to Moscow, resulting in a claim
of US$1.3 million.
On
another occasion four containers with pre-fabricated
soda drink concentrate that arrived at their
destination in a frozen state due to the
wrong temperature set by the trucker in
St Petersburg, resulting in a $1.5 million
claim.
Yet
another case involved several hundred containers
with hazardous cargo detained by the authorities
when transshipped in the EU, due to a breach
of IMDG (International Maritime Dangerous
Goods) provisions. This resulted in claims
and costs up to US$1.2 million against two
freight forwarders in St Petersburg.
Of
course, making claims is easy enough, but
getting paid is another matter entirely.
And
there is much confusion in the Russian market
that makes getting paid more difficult.
It is not unusual in Russia among transport
operators to find those that are not fully
aware of how two types of insurance differ
and what occurs when they are covered by
the two policies. What often happens is
that neither covers the operator.
An
example might be when an operator takes
cargo insurance but not liability and then
experiences an accident where cargo in a
shipping container or road trailer has shifted
as a result of bad packing.
Damage
to the cargo occurs, but as a result of
the shift, a warehouseman, opening the unit's
doors in order to unload also suffers bodily
injury. In this case, the transport operator
would be faced with a disputable cargo claim:
improper packing is usually an exclusion
under cargo cover, but a transport operator
may still be liable and also to a third-party
liability claim, against which he is uninsured.
Lack
of understanding of such insurance often
leads to double insurance. This occurs when
a transport operator takes cargo insurance
and believes this protects him, only to
find when the cargo is lost he receives
a recourse claim from the shipper's cargo
underwriter.
There
is an urgent need for forwarders, logistics
companies and other transport operators
doing regular business in Russia to understand
fully the extent and nature of the liabilities
that they bear when delivering customers'
freight in the country, says Mr Petrenko.
Increasingly, the services that transport
operators provide to cargo owners are expanding
into areas beyond the straightforward delivery
of inbound containers, to such functions
as cross-docking, warehousing, re-packaging,
sub-assembly, and distribution.
As
a consequence, the liabilities for loss
and damage to cargo, as well as third party
claims, alter from the traditional norms
with which they have been more familiar
in the past.
Liability
rules in Russia are different. Russian
civil law and international practice often
diverge and lead to contrary guidance as
to the likely outcome of individual clams
cases. Without specialised knowledge and
advice, many transport operators new to
the Russian market run afoul of such misunderstandings
and experience a short-lived foray into
the Russian freight market.
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