Covering All Bases
With the largely blended VLSFOs now accounting for the majority of bunker deliveries – and with a raft of new fuels also on the horizon to comply with coming environmental legislation – Steve Simms of Simms Showers considers how marine fuel physical suppliers and traders can best insure themselves against quality claims.
Article Highlights:
As a bunker trader or supplier, you think about a lot of things. Prices, competition, supply sources. Maybe even now and then, your sales terms and conditions. With new fuels including new blends, bunker traders and suppliers should also now consider their insurance coverage. Are you sure that your present insurance policy will protect adequately against bunker quality claims? It might not for blends and new fuels, or even for quality claims for ‘traditional’ bunkers.
A general liability policy might not provide full products liability coverage for the range of damages a bunker trader or supplier might face with a quality claim, from replacement and de-bunkering of non-compliant fuel to machinery damage and propulsion failure.
In the contracts that the traders or suppliers have for blended product, or components for that if they are doing blending, what warranties and assurances do the traders or suppliers require of the cutter and blend stock suppliers?
Underwriters will want assurances, through the trader’s or supplier’s terms and operating procedures, that claims are reported to underwriters promptly, including sufficient detail for the underwriters to respond and give advice about how to limit the claim.
One thing is for certain and that is no bunker trader or supplier should ever want to have any ‘marine adventure’ without adequate and responsive insurance coverage. Self insurance, that is, going with-out that coverage or with inadequate coverage, in the further evolving bunker industry is not an adventure for any trader or supplier wanting to survive.
