Damaged goods

Every day businesses are forced to count the cost of receiving damaged goods into warehouses.

Often businesses are left out of pocket to the collective tune of millions of pounds, simply for want of following the correct procedures. This could be severely damaging to a business especially if the losses occur over a period of time or go unreported to insurers.

There are many businesses in Lancashire which rely on importing various goods, and they need to be aware of the following tips when receiving goods into a warehouse and they have a cargo insurance policy:

• Always inspect cargo for loss or damage on arrival. To not do so will involve extra work to show that a business did not cause the loss or damage itself at a later time. If the cargo arrives in a container, the external surfaces should be inspected for damage.

• Businesses should never issue a clean receipt to the delivering carrier unless the cargo can be immediately inspected and it is found to be undamaged. If there is any doubt, any documentation should be marked with “Received in Apparent Good Order and Condition”.

• Never accept the carrier’s explanation that they received the cargo in a damaged condition. The carrier needs to provide the evidence of their claim. If goods are received in a damaged condition or are missing, a claim needs to be lodged.

• Complete an initial notice of claim form and lodge it with the carrier, freight forwarder or supplier of the goods. Advise your insurance broker of the details of loss or damage so a surveyor can be appointed and complete a claim form available from your broker.

Take all steps to avoid/minimise any further physical or financial loss. The cargo remains the property of the receiving business – note that ownership of the goods never passes to the insurer, unless there is an express written agreement.

The surveyor is only there to record, advise and facilitate, not to take control. Any delays caused by inaction may affect an insurance claim.

There are a number of documents usually required when presenting a claim:

• Bill of Lading/Air Waybill
• Commercial Invoice
• Insurance Certificate or Policy details
• Copy of pro forma claim (initial notice of claim) lodged against the carrier
• Documentation relating to out-turn/receipt of goods
• Local carrier's consignment note, where applicable
• Copy of temperature records, where applicable
• Invoices to confirm salvage/sale price, where applicable
• Copy of instructions to carrier regarding carriage temperature, where applicable

Peter Millington, business development manager for Taylor Patterson’s Corporate Insurance division.