Underwrite a health hazardous marine cargo with terrorism extension

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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