There are three key words affecting the insurance coverage you place for your clients, "Care, Custody & Control." Like all Ocean Marine coverages, this insures cargo for your clients while the cargo is in your care, custody or control. The extent of coverage is governed by the Sales Contract and the Incoterms 2000. For your reference, an overview of the Incoterms is included in our Online Reference section.
EXAMPLE: If you handle the logistics for a Shipper and the sales contract is FAS/FOB, the insurance coverage ends once the goods are Free Alongside or Free On Board unless you have prior approval from Underwriters.
Under an FAS/FOB sale, if you have handled the logistics of the shipment all the way from Shipper to the Consignee, and if the Consignee wishes you to insure the cargo, then you need to make sure, via email or typed on the Certificate Request, that Underwriters are aware you are handling the logistics on past the point where ownership of the goods changes hands, and that you need for insurance cover to continue on.
NOTE: These limitations have always governed the extent of ocean marine insurance coverage. If, in the past, you may have had a claim paid with the words "Without Prejudice." "Without Prejudice" means the insurance company "technically" did not owe the claim, and could have declined to pay, but paid as an act of good faith because your intent was for the coverage to be in place.
By being mindful of the Sales Terms and Incoterms we can eliminate this confusion.
Being careful in this way may eliminates potential problems in case of a claim.