Claim and underwriting Rosewood Coffin Scratch

Published May 4, 2017April 28, 2017 by jamin

Claim and underwriting rosewood coffin scratch. It was one of the weird kind of cargo that I had to underwrite during my 23 years working experience in the general insurance industry.

Introduction

My partner of second handed imported car tire from Japan and South Korea Mr. Leong of Singapore called me on Monday, April fool morning to underwrite a shipment of 2 exorbitant coffins.

“Can I have the detail of this shipment? I asked him.

“Please liaise with the producer, Mr. James at Ho Chi Minh City, Vietnam shortly, he is expecting your call urgently, as the shipment is ready.”

“Good morning, Mr. JAMES, I am Jamin, Mr. Leong partner from Singapore. Can I have the detail of this consignment?”

Customised order

“My client, a business tycoon from Singapore has called to make this customized rosewood coffin with dragon and phoenix carving on both sides for his elderly parent. We use the high-quality craftsmanship for the carving. Indeed a filial son to his parent. It is hand carving by 10 craftsmen for 3 months to complete a coffin. We take total 6 months to finish the whole the assignment. Rosewood must be more than 100 years old to make such exclusive coffin.There is a sparkling of gold dust sprinkle on the carving to give a shiny beam look. Later the coffin would be cremated.

Tailor made

“What other requirement or special clauses for this cargo.?

“The client would not accept any scratch on the outer surface of the carving or any other part of the wooden surface. It means to bring in bad omen or misfortune for the descendants. It is due to this clause, no insurer in Vietnam dare to cover this type of risky adventure. Is it alright with you?”

“Mr. James, it is fine with me, but I need you to follow strictly my instructions before the shipment.”

Pre-shipment survey

1. A Switzerland cargo surveyor was needed to inspect the packing before stuffing into the flat rack container.
2. The surveyor had to take a detailed close-up video clip on every inch of the cargo especially the dragon and phoenix carving.
3. A dendrochronologist’s verification report that the age of the rosewood must be more than 100 years based on the ring of the wood.
4. Double layer corrugated box outside and styrofoam on the inside for packing purposes.
5. The coffin must be wrapped with the air tight thick plastic bag to prevent moisturized of the wood.
6. A professional handler must be supervised the stuffing of the container.
7. There must be protective foam stuffing in between the container.
8. A 30% was added to the invoiced valued of S$2 million to determine the sum insured.

Policy issued

I issued the policy with following clauses:-

ICC “A” clause
Constructive total loss if container dropped into the sea
Loading and unloading
Hijacking and Armed robbery especially open sea near the Southern Philippines and Indonesia.
Strike riot and malicious damage.
Warehouse to warehouse clause.
Scratched and dented.

Claim

The cargo arrived Singapore sound. The mishap happened during customs inspection. One of the professional handlers had accidently pierced through the double layer hard carton paperboard with his long knife. There was a visible scratch on the dragon head of this exquisite coffin.

I had to file a claim using the earlier video clip done by the pre-shipment surveyor at Vietnam.It was negligent of the freight forwarder carried out their duty without utmost care.
The claim amount was $1.3 million less an excess as stating the marine insurance policy. It was an agreed value policy. Of course, there was a salvage value for this kind of high quality and costly rosewood.

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Bank unethical practice forced client insured property risk

Published June 2, 2017April 20, 2017 by Jamin

Bank unethical practice forced client insured property risk. We love and hate the bank. They forced us to take an insurance policy when the property loan is approved. Someone called them they are the licensed loan shark or legalized Mafia bully the poor and apple polishing the rich. I had a nasty experience with one of the bank staff.

Bank Loan approved

“Mr. Jamin, your housing loan is approved. Please sign on the dotted line on a blank house owner proposal form with a sum insured for a quarter of million. In the event of a fire, you can claim for the said amount.”

“Only fire? What about the storm and tempest, impact damaged or bush or falling, subsidence landslide?

“No, only fire, Mr. Jamin”

“Sorry, no signature, I use my own insurer which is also your panel of the insurance company.”

Fire insurances

I brought 2 fire insurances on the building with all the necessary perils, I assigned a quarter million assigned to the bank another balance $600 000 to my own name to avoid the average clause in the event of an either partial or total loss. Another householder policy to cover fire and full theft for the house content.

Victim

My investor in the unit trust or mutual fund holder was a victim of the bank. I could not help her when signed the fire insurance proposal form as I went oversea excursion with my whole family.

Land Building

She purchased a corner lot land residence building, the property was earlier converted into a commercial lot. She took a 90% margin loan out of 2 million on the purchase price. The bank gave her a favorite low-interest rate with 8 units of condominium plus a small scale factory building in the same year with the same bank. Everything went through smoothly without a hiccup, but not every day was a sunshine day.

The fire razed the building to the ground due to short-circuit. No injury. The car repair workshop closed on Sunday.

Verdict

“Mr. Jamin, can I get back the sum insured of 1.8 million dollars? It was 10 years loan tenure. another 5 more years to service the loan.

“No way, you cannot get the full sum insured as it depends on the reconstruction cost recommended by the fire adjuster. I am not sarcastic, but true, let us wait for the final adjuster claim report.” I consoled her.

She could only claim for 700 000 dollars based on the finalized claim report. Speechless and dumbfound on seeing the recommendation as she overinsured her property and paying the extra premium to the drain.

“Why you take the bank word as gospel after all money is not a problem to you. Take it as a costly lesson learned” I scolded her in her office.

The bank often takes the panel of the real estate appraiser’s valuation report as a guide to insured the property. The 2 million dollars building comprises of (1) the element of profit, (2) the land price tag. Both are not taking into consideration in the event of a claim. The insurer only indemnified you for the loss the building prior to the fire occur. The property appraiser and the bank have a shallow deep knowledge of insurance. Be wise to consult the insurance broker who has the insured’s best of interest. The bank just acts as an agent to the insurer, who has to obey the rule and regulation lay down by the insurer.

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Underwrite a health hazardous marine cargo with terrorism extension

Published July 9, 2017April 13, 2017 by Jamin

How to underwrite a health hazardous marine cargo with terrorism extension? A topic that most underwriter will reject the insured especially after September 11. Is it difficult to underwrite such a cargo? A veteran who had conquered the Mount Everest seeing no danger of in climbing it.

Receiving an email from Texas USA to cover a shipment of 1 full load of a container of aluminum oxide ex-warehouse to Pasir Gudang plant. Reading an email was a luxury for me at that time, nevertheless, I received a call at 5.30 pm.

USA Call

A lady called me, “Can I speak to Mr. Jamin Wong”

“Yes, I am speaking, how can I help you, lady?

“An Full container load of aluminum oxide tentatively to leave the factory premises at midnight, can you cover this shipment for us?

“Sure, no problem, but, I need a chemical analysis report of the cargo, also the packing method and material use.”

“OK, that is fine, just give me half an hour to furnish you all the necessary documents, if you have the doubt please call me and my aides, we work 24 hours.”

Underwriting

After 30 minutes, upon notifying the full chemical analysis report that the aluminum oxide used as a catalyst for the plastic manufacturing plant.

The inorganic compound filled in a double side steel metal drum to prevent any spillage on the ground. Thick carton paperboard gaping between the drums prevent the shifting movement in the container.

Health Hazard of Aluminum oxide

It can absorb into the body by inhalation of its aerosol.
The short term exposure can cause eye and upper respiratory tract irritation.
Aluminum oxide on the long-term exposure causing damage to the central nervous system.

Premium calculation

Any chance of hijacking and the consignment falls into the hand of the terrorists? The probability of risk calculation determines like the launching of a satellite using rocket. Chances of an explosion of the rocket to derive the reasonable and acceptable premium?

Condition Attached

“I accept the risk but on condition with an addition a public liability coverage. Is it ok with you?” I called the lady counterpart in the USA.

“Why a public liability insurance attachment?” she asked me.

” Due to the health hazard associated with the biohazard cargo during an impact damage, the substance in the powder form will pose a danger to the public at large. Would you like your company being sued for billions of dollars? I advised her.

“OK. Do what is deemed necessary and not to forget to give us your insurer’s bank detail for payment of premium. Have a nice day and I look forward to receiving the policy via email.”

I underwrite the policy promptly with a restricted clause, covering both of policies with the sum insured totaling more than 2 million dollars.

“The consignment on land transit permitting only during the off-peak period avoiding any accident occurs.”

Inserting such clause prevent any unforeseen accident when the shipment destined at the Johor Baru causeway. Cars and truck bumper-to-bumper crawling along the causeway stranding thousands of people. A disastrous scene when a collision with the container, people valued their precious life either run or jump into the Johor Strait.

A few months later, we had lunch with the regional manager. The HQ marine underwriter informing us they turned down the regional manager’s proposal initially, subsequently, you had underwritten it finally. Indeed, a shocking discovery of that day! Having a vast decade of experience more than me in the industry but did not pursue the Chartered Insurance Institute marine paper. A loss prevention is always the best practice of insurance.

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How to claim employee dishonesty coverage?

Published June 5, 2017April 7, 2017 by jamin

How to claim employee dishonesty coverage? In the course of employment, sometimes the employer often discovers the stock gradually diminishing. It is very hard to detect the culprit, especially in the department store. During the annual stock-taking, a 2-3% marginal loss is all right for the management, as it has already taken into consideration for the loss.

A tragedy case I handling for more than a decade, still fresh in my mind.

Logistic

A lady boss of a logistic company once called me to insure their company good in transit. I suggested to her another policy compliment the shortfall in the good in transit policy. She agreed to have another policy to cover the dishonesty of the employee during their employment. The fidelity policy was issued with the full list of employees’ name and identity card number.

Employee’s Particulars

“Why do you need to have their particular” she questioned me.

“The reason is I need to check any criminal background especially the driver and attendant. The traffic police department should have all their offenses and also drug taking while driving.

A few months later when the both of policies were in forced. She called me about the loss of 50,000 dollars of consignment.

Police Report

“Please make a police report and also the driver’s particular. Let the police dealt the driver for further investigation.” I advised the panicked owner.

A few days later the police arrested the driver.

The driver had worked for the company more than 10 years, a diligent and responsible married man with 3 kids plus another one on the process. He confessed to the police that he sold the whole cargo for 25000 dollars. The money was to pay the high bill for his wife who was undergoing kidney dialysis. He was at the wits end in seeing wife getting weaker as the day went by. She could hardly undertake any household chores. The eldest daughter had to stop schooling at primary year 5 to take care of the family.

After knowing the predicament of the driver, she canceled the police report. She let the driver continuing working with her. With wide social contact, she managed to get the patient undergoing kidney dialysis at the government hospital. The kind and soft-spoken lady boss gave another 20 000 dollars to her driver repairing his depleted house besides, sending back his daughter to school until high school with fully sponsored by the company. She worked for her until tied her nuptial knot with another transporter’s son. All end well.

The fidelity guarantee policy response in this case as she brought policy with sum insured of 100 000 for each loss with a 1% excess. The insurer paid 49 000 after deducting the excess.

Fidelity Guarantee

An insurance policy designed to indemnify the Insured (the employer) for the loss of money or property sustained as a direct result of acts of fraud, theft or dishonesty by an employee in the course of employment.

Employee theft insurance.

It protects the business against property thefts committed by employees. It is also called employee dishonesty coverage. Employee theft coverage may be written alone or in conjunction with other crime coverages, such as Computer Fraud Coverage, under a commercial crime policy.

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