LOSS OF COMMISSION COVER
One of the additional insurances that ITIC offers to shipbrokers and ship managers is loss of commission insurance when they are not paid commission or fee income arising out of a marine peril, such as the loss of the MSC NAPOLI. The broker who fixed the vessel for a period charter lost its right to commission when the ship was declared a constructive total loss. The broker insured that risk with ITIC and the Club paid USD 500,000 to the broker which was the equivalent of the balance of the commission earned over the duration of the charterparty. The broker was therefore paid all the lost commission upfront. We offer two levels of cover, the simpler being loss of commission insurance resulting from the actual or constructive total loss of a vessel and the more comprehensive cover which includes loss of commission due to a wide range of marine perils, such as heavy weather, fire, piracy, collision, engine breakdown and negligence of master or crew. Cover is offered either on an individual declaration of a charter, sale or purchase, or management contract or annually for all fixtures or management contracts concluded throughout the year. In the latter case, there is no need to make any further individual declarations as they are automatically covered. As the broker of the MSC NAPOLI found out, loss of commission insurance can be considered to be an essential cover, similar to business interruption and loss of profits insurances which routinely cover any other business. The loss caused by, for example, the sinking of a vessel on a long term time-charter could seriously disrupt a broker’s income.
Picture reproduced by kind permission of the Maritime and Coastguard Authority.
CASH IN TRANSIT AND MONEY INSURANCE
Ship owners often require their agents to deliver large amounts of cash to ships in port. The risks are obvious. A ship agent will need insurance to cover cash when it is in his care temporarily, whether kept in a strong room at his office or in a safe at home. ITIC provides a product offering this combination of insurances which can be offered either on a single occurrence or annual basis.
Over the past fifteen years, ITIC has recovered USD 80m in unpaid commission, disbursement accounts and other debts for our members. The insurance pays for the legal costs of pursuing your claim. Tact is vital in order to preserve commercial relationships and often a polite reminder is all that is needed to secure payment. If proceedings are, however, necessary, our specialist team will use whatever legal means necessary to try to recover the monies owed to you.
If you do not have these additional insurances, and would like to receive a quotation, please contact your insurance broker or your ITIC underwriter.