In the special issue of Logistics, the monthly Industrias Pesqueras publishes an opinion article signed by Manuel Fernández, from MatErh.
Companies are changing their mentality by seeing merchandise insurance as an indispensable investment to cover their commercial operations, instead of considering it an expendable expense.
However, will the policy cover all our operations, regardless of the INCOTERM used? It is important to understand that these terms determine the moment of transfer of risk from the seller to the buyer in international transactions. Regardless of the agreed payment conditions, and under certain INCOTERMs, the responsibility of contracting insurance on the goods will be at the discretion of the seller or the buyer and, if it corresponds to the counterparty, we may be surprised that our insurer rejects coverage in the event of a claim, even if we have contracted the policy.
More and more insurers are including provisions in the policy indicating that the coverage granted will have the indicated validity in accordance with the INCOTERM used in the sale transaction.
An example of this type could be an operation under EXW (Ex Works) terms, in which the seller has a policy with worldwide coverage and in which we have a loss on the goods during their transport and without the payment date agreed with the buyer having expired. In this case, it is common for the buyer to indicate his refusal to pay for the goods as he has not received them and the seller tries to recover this amount from the insurance. However, the surprise we could get is that the insurer indicates that the seller’s risk ended at the time of collection of the goods at its facilities and that, consequently, there is no coverage.
It is necessary to have the advice of insurance experts, who can help us to properly align the contracted coverage with the INCOTERM used. This will avoid unpleasant surprises and ensure smooth operations in the future.
Manuel Fernández Rodríguez
Director of Claims at MaErh Risk Management
