Misappropriation is a hot topic in the Marine Cargo Insurance market. When a mysterious disappearance of cargo occurs the first question is usually, “is it a case of ordinary theft or might this be considered a misappropriation?”
Warehouses that store and transfer goods for trading companies are relied on to deal with goods and the associated financial flows in the correct way. Abuse of this power is not unheard of and when it occurs, could cost a trading company millions of dollars.
This multi-million-dollar exposure is not attractive to the insurance market which is why insurers are becoming more reluctant to insure what is now a worldwide and growing risk.
How we can work with you to manage and control the risk of misappropriation:
Our team of experts can advise you on how to control and manage the storage and transfer of your goods in the best way possible. We know the rules and regulations required and what evidence needs to be collected.
Short and simple: be aware of the whereabouts of your goods, control them, and track and trace them. Local trusted people will make the difference and keep your goods safe.
The insurance market
Aon’s commodity industry practice works with a clear definition of misappropriation, created in close partnership with the insurance market. It is key that all parties are aligned and agree on a clear and transparent definition of misappropriation.
Our definition was written from the mind-set that the insured should act prudently and avoid risk in the best interest of all parties concerned. In those circumstance, the insurance market should not exclude or limit insurance cover for risks that are well managed.
We aim to work with insurers that share our definition of misappropriation and are committed to providing the best insurance cover for our clients.