LOSS OR DAMAGE TO CARGO & P&I CLUB

 

LOSS OR DAMAGE TO CARGO & P&I CLUB

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·         One of the major functions of Protection and Indemnity insurance is to cover a ship owner, or the charterer of a ship, for liability for loss of, or damage to, cargo if there has been a breach of the contract of carriage. This breach of contract usually means that something has happened to the cargo while it was on board the ship or 5 being loaded or discharged, and for which the owner or charterer can be held responsible, i.e. shortage or damage to the cargo.

·         An important function of the Bill of Lading (B/L) is to describe the condition and quantity of the cargo as received on board. If the cargo is discharged in a different condition, or in lesser quantity than that entered on the B/L, the ship owner may be held liable for the damage or shortage.

·         usually the cargo insurers (or underwriters) will pay the person or company who owns the cargo ( the receiver) for the costs of loss or damage to that cargo when the cargo has an accident.

·         The cargo underwriters will then seek to recover their losses from the ship owner or charterer.

·         The P&I club will usually take over the handling of such claims on behalf of the assured.

·         This is one of the reasons why evidence in the form of documentation, copies of the log book, surveys of damaged cargo, copies of tally books, dated photos of loading in the rain etc are very important in establishing the exact reason for the damage.