'What importers should ... Continued from yesterday

Udeni Kiridena ACII, ANZIIF (Snr. Assoc), Dip. B. Mgt., Chartered Insurer, General Manager (Non Life)

Asian Alliance Insurance PLC

'All risks cover'

The locally issued policies are governed by internationally recognized `institute clauses'. It is extremely important that the importer is well aware of the cover provided and is advised to obtain an "All Risks Cover", rather than a restricted one, from the supplier's insurer. It is only when a claim is made that the fine print comes into play and sometimes, with the industry consolidating globally on a continuous basis, the initial insurer may have merged or been bought over, posing further difficulty in securing the claim.

A merchant insuring a consignment locally has the advantage of receiving the claim payment from the local insurer directly and promptly, while foreign insurers must obtain the services of a Sri Lankan company for the survey prior to settlement, causing undue delays. Some of the overseas insurers impose unfair a condition such as that claims be lodged with the insurer within a very short period or risk having the claim repudiated.

If the importer is unaware or not in a position to negotiate deductibles (a common feature in insurance covers) he could experience a reduction in the claim payment.

Some countries have introduced legislation, making it mandatory for all imports to be insured locally, which is a step in the right direction as the insurance component of the premium in foreign currency is retained within the country.

There is also the new development of web-based marine-insurance policies, reducing turnaround time significantly. Also, in insuring locally, importers have the advantage of covering government levies and minimizing losses in the event of a claim.