New protection from unexpected financial losses
Ship agents can predict their financial exposure to the usual costs of a port call but there are occasions when unexpected developments mean the final disbursement account is far greater than could have been anticipated.
Ultimately the agent has to settle their commercial debts but if the additional expenses cannot be recovered from the principal the agent can be left with a large bad debt. To protect its members from being left to pay unanticipated port disbursements ITIC are offering an additional cover.
What is covered?
Unanticipated port disbursements are disbursements which could not have been reasonably anticipated before the vessels call or which were increased by circumstances which could not have been anticipated.
How it works
The unanticipated port disbursements endorsement works in conjunction with your “Rule 10, additional legal costs and debt collection” cover to make sure you are protected from unforeseen debts. If you are left with an unpaid disbursement account ITIC will pursue these as a debt collection. If a successful recovery action isn’t a realistic prospect ITIC will cover the amount of unanticipated port disbursements.
Due to adverse weather conditions the port required a ship under your agency to have an additional tug when leaving the berth. This situation was not anticipated and so the costs were not included in the proforma disbursement account. The ship owner claims the additional tug was not necessary and ignores your requests for payment.
Cargo operations for a ship discharging project cargo were due to take 6 days. However, due to the complexity of the project the vessel was in port for 26 days. The port subsequently raised an additional invoice for 20 days. The agent was nominated by the charterers. Liability for the costs was disputed by the owners and charterers.
Seafarer needing repatriation
A seafarer has an emergency and needs to be sent home immediately. The ship agent arranges for taxis, visas and airfares. Despite your requests the ship owner declines to pay the amount you have incurred on behalf of their crew.
In all these cases ITIC will attempt to get your money from the debtor but this is not always possible – The responsible party may go into liquidation, sometimes debtors are based in jurisdictions where it is simply not possible to economically pursue an action or any one of a number of reasons can frustrate attempts to recover the money. Historically that has been the end of the matter and the agent is left with a bad debt. However, if you purchase ITIC’s unanticipated port disbursements endorsement then ITIC will cover those losses.