Also in this issue:• Worldtrade:Theonlywayisup• Doingtherightthing(compliance)• Learningfromclaims• Declaringgeneralaverage• Salvage

Protectingyour

assets in transit

insightsmarine risk june 2011

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Contents

03 Welcome

03 introduction

04 World trade: the only way is up

07 Doing the right thing

10 Learning from claims

14 Declaring general average

15 Case study 1: where is my cargo?

16 salvage – posting security

17 Case study 2: there’s a hole in my container!

18 Obligations in international trade

20 Transport your goods safely, on time and without losses

22 ensuring safety in the packaging of containers

24 risk engineering: Greater peace of mind

28 Projects: the way ahead

31 Piracy: not going away

36 Zurich international research and Development Centre of shipping and Finance

38 Contributors

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WelcomeWelcome to this edition of insights on Marine.

In this insights, we look at how world trade is recovering, the lessons

that can be learned from claims, and the benefits of risk engineering.

Above all, we look at how you can benefit from integrated teams, with

underwriting, claims and risk engineering all working together

for the benefit of our customers.

We also bring you the latest information on buyer and seller

obligations in international merchandise trade, the moves towards a

consensus on what needs to be done about the issue of safety in the

packing of containers, the current focus on compliance around the

world, and the latest picture of the Somalian piracy threat.

Kind regards,

Lee meyrick, Chief underwriting Officer Marine, Zurich

Introductionis there light at the end of the tunnel? Are we through the recession? The latest figures from

the World Trade Organization (WTO) certainly suggest

that things are improving rapidly, with the fastest growth

in the volume of exports ever seen since records began.

The WTO believes the longer-term trend will be for more

modest growth, but it is growth nevertheless.

However, it is not all good news. There are many more

General Average claims being declared, cargo theft

has increasingly become the domain of large organized

criminal gangs, and piracy remains a potent threat.

The infrastructure in some developing regions continues

to be a concern, and the handling of cargo is a problem

in some areas as a result of a lack of training.

But all of these various concerns are being addressed by

industry, insurers and governments, with varying degrees

of success. Insurance, of course, has an important role to

play, and Zurich is determined to help its customers find

solutions, through insurance protection, through risk

engineering, and through sharing of best practice.

It has been a tough two or three years for companies in the import/export business or transportation sector. World trade saw a major dip in 2009 – The united nations Conference on Trade and Development (unCTAD) described it as an unprecedented trade contraction, revealing that merchandise exports dropped about seven times more rapidly than global gross domestic product.

Worldtrade:theonlywayisup

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line with forecasts from unCTAD that the shipping

industry and seaborne trade are recovering, but it

will take beyond 2011 to return to 2009 levels.1

Asia: the engine room for world trade growthDespite the economic downturn, Asia is still driving

global trade. Asia exhibited the fastest real export

growth of any region in 2010 with an increase of 23.1%.

This was led by China and japan, whose shipments to

the rest of the world each rose roughly 28%.

In 2010, China overtook Germany as the world’s leading

merchandise exporter, accounting for almost 10% of

world exports, and is now second to the uS on the

import side, accounting for 8% of world merchandise

imports according to WTO fi gures.2 The growth is

particularly in infrastructure projects – Indonesia,

Thailand, and China are all ploughing billions of dollars

into their infrastructures – building power stations,

bridges, and roads. And naturally, it has an impact on

cargo transportation.

• International seaborne trade contracted by 4.5% in 2009

and fell below 2007 levels from the all-time high attained

in 20081.

• estimates put total seaborne trade during 2009 at

7.84 billion tons, according to the unCTAD Review.1

• The World Trade Organization (WTO) said that the global

economic crisis in 2009 caused a 12.2% contraction in

the volume of global trade — the largest decline since

World War II.2

• The value of world merchandise exports fell 23% to

uSD 12.15 trillion in 2009, while world commercial

services exports declined 13% to uSD 3.31 trillion.2

Recovery in 2010But there was a good recovery in 2010. According to WTO

fi gures, the volume of exports in 2010 rose by a record-

breaking 14.5% (the fastest growth since records began in

1950), enabling world trade to recover to its pre-crisis level

but not its long-term trend. Developed economies recorded

export growth of nearly 13% in 2010, compared to a 16.5%

average increase in the rest of the world.3

Announcing the fi gures in April 2011, the Director-General

of the WTO, Pascal Lamy, said: “The fi gures show how

trade has helped the world escape recession in 2010.

However, the hangover from the fi nancial crisis is still with

us.” WTO economists forecast that world trade growth

should settle to a more modest 6.5% expansion in 2011.4

Cautious optimism for the futureWhile there is no tangible ‘feel good factor’ in the import/

export trades, since 1 january 2011 we have seen cautious

optimism in europe in terms of turnovers – customers are

talking about modest increases, but they are still very small

and certainly not yet back to the levels pre-crisis. This is in

1 The UNCTAD Review of Maritime Transport 2010, December 20, 2010: http://www.unctad.org/en/docs/rmt2010_en.pdf

2 WTO News Release March 26, 2010: http://www.wto.org/english/news_e/pres10_e/pr598_e.pdf

3 WTO News Release April 7, 2011: http://www.wto.org/english/news_e/pres11_e/pr628_e.htm

4 WTO News Release March 14, 2011: http://www.wto.org/english/news_e/news11_e/rese_14mar11_e.htm

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effects of the downturnThe economic downturn has had a major

effect on companies in the import/export

business or transportation sector, not least

the decline in demand for goods which saw

trade levels fall globally. But the downturn

has also resulted in cost-cutting across the

sector. This has impacted crewing levels and

quality of crews, and resulted in reduced

investment, if any at all, in training, vessel

maintenance, logistics quality and risk

engineering. As the recovery proceeds, all

of these areas will require additional

investment to ensure that losses and delays

are kept to a minimum.

new challengesDespite the temporary impact of the

economic downturn, globalization continues

apace. More and more companies fi nd

themselves looking to overseas markets,

either to sell their products or to import

goods or commodities. This creates new

challenges for companies in terms of

unfamiliar territories, changes in where

the suppliers and markets are, and of

course logistics.

One of the biggest challenges is ensuring the

effi ciency and strength of the supply chain.

Breaks in the supply chain can be costly and

impact on profi ts. There is a much greater

risk of this where global trade results in an

extended supply chain. As a result, active

supply chain management is increasingly

necessary to ensure that weak spots are

identifi ed, alternatives prepared, and

business interruptions minimized.

Commodities andhi-tech productsAs well as infrastructure projects, there is

also a focus on commodities. There are

huge amounts of hard commodities –

iron ore, steel, coal – moving into the

Asian region from Australia, India, and

South America.

And then there are a lot of fi nished

products being produced by China, Taiwan,

Korea and japan and exported outwards,

such as hi-tech products like smart phones,

portable media players and 3D TVs. The

entire Asian region is continuing to see

high levels of trade, both import and

export: the raw materials being imported

and the fi nished products being exported.

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Globalization and the steady growth in world trade have

meant a growing demand for global insurance programs,

and in particular for marine insurance. At the same time, the

economic downturn has resulted in a fundamental change

in the area of compliance, and this has had a major effect

on the purchasing of marine insurance.

rightthingCompanies that trade internationally face many challenges, not least of which is the issue of insurance protection.

Regulatory restrictionsMany countries around the globe have some form of

regulatory restrictions, which are designed to protect the

local market. These include:

• local policy taxes (admitted insurance)

• restrictions on non-admitted insurance

• compulsory insurances

• reinsurance restrictions

• exchange controls

• national pools.

Doing the

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existing regulations are being strictly

enforced more than ever before as countries

face increasing fi scal pressure.

The aim is simple: to keep premiums within

the country, and to raise revenue by taxing

those premiums. As a result of the downturn,

many countries are looking to have their own

internal insurance industries, even if it is just

for tax revenue purposes, and this is driving

a lot of the regulatory issues.

Consumer protection lawsIncreases in consumer protection laws have

been driving the need for locally admitted

policies. Countries are increasingly looking to

protect consumers in their territory by only

allowing insurance with insurers that are

regulated by the country. Governments

want to ensure that there is recourse to

a local insurer in the event of something

going wrong.

use of non-admitted insurance is simply not

an option in many countries. Countries may

insist on an admitted insurer for all

insurances or for compulsory insurances.

There may be compulsory cessions to

national pools related to terrorism,

environmental insurance or taxation of non-

admitted insurance.

Greater protectionismIt is all part of a wider move towards greater

protectionism around the world. A report

last year, “G-20 Protection in the Wake of

the Great Recession,” 5 commissioned by the

International Chamber of Commerce’s (ICC)

Research Foundation found that all G-20

countries have implemented protectionist

trade measures over the last two years.

By September 2009, the G-20 were

responsible for 172 such measures being

implemented, with hundreds more in the

pipeline. The report said that “the sweep

of protectionist policies in the wake of

the Great Recession is alarming.”

ensuring complianceFor the trade and shipping sectors, alignment

with insurance regulations is becoming a

crucial factor. This is not only because there

may be problems with recovery, or with the

ability to have a claim paid to the company

where it is not locally represented, but also

because of the issue

of fi nes. This is a topic that affects the

insurer, the broker and the insured, all of

whom can be hit by fi nes, which in some

cases can be substantial.

Therefore, when choosing a carrier,

international companies should be

increasingly focused on the carriers’ global

capability. As companies look to expand into

new territories, with new suppliers, or new

markets, they need to know that they are

fully compliant.

A report last year, “G-20 Protection in the Wake of the Great Recession, ”commissioned by the International Chamber of Commerce’s (ICC) Research Foundation found that all G-20 countries have implemented protectionist trade measures over the last two years.

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5http://www.iccwbo.org/uploadedFiles/ICC/iccrf/G20_Protection_in_the_Wake_of_the_Great_Recession.pdf

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Local representation Take, for example, a uK company

representative who visits a Kenyan trade

show and sells products, which are later

shipped to Kenya. If these products are

damaged in transit, that company is unlikely

to have any representatives in Kenya to take

care of the problem. Compliance goes

beyond just making sure the paperwork

ties up – it is also about coming up with

a bottom end solution when things do

go wrong.

Marine is one of the few areas where this

can happen, where you can have a claim in

a territory where you may not have any sort

of base or representation. Many claimants

are outside of the country where the policy

is produced, and so global delivery becomes

a crucial element.

With the globalization of trade, there is a

particular issue for compliance when goods

go into storage and distribution.

Where goods are being stored in a country

in which a company has no representation,

and where there is inland transit within that

country, from the warehouse distribution

to the retailer, it may be vital to have local

policies that will respond in the event of

a loss.

Added valueThis is why a multinational insurer who can

provide locally compliant solutions can add

value. Due to their reach, multinational

insurers have qualifications to identify and

understand the regulations of a particular

local jurisdiction, and work within the

confines of those regulations as well as

regional and global sanctions, all within a

centrally controlled overall program.

Multinational insurers can offer, through

their local resources, the ability to conduct

the requisite local vetting that is needed for

claim-related activities, to ensure compliance

with the regulations.

If these products are damaged in transit, that company is unlikely to have any representatives in Kenya to take care of the problem

Customer checklist: Insurance complianceIs non-admitted insurance allowed?

Are there financial penalties associated with non-admitted insurance?

What are the local premium taxes?

What other taxes may be applied (excise tax, stamp duty, withholding tax)?

What are the compulsory insurances?

What compulsory cessions are required (national pools, reinsurance, etc)?

How can premium be fairly allocated across subsidiaries?

Can claims be paid to the local subsidiary?

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Learningfrom claims

In an economic downturn, there is typically an increase in the frequency and severity of marine claims. This may be the result of cost-cutting affecting crewing levels and expertise, a lack of regular maintenance, or vessels being laid up for an extended period.

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Cargo theft claimsAlthough largely unrelated to the economic

downturn, theft and hijacking of cargo is an

increasing problem. There is still a very high

frequency of the targeting and successful

theft of consumer retail goods, particularly

consumer electronics, pharmaceuticals and

high-value commodities that are easily sold

on the black market, especially in South-east

Asia and Latin America.

In the uS, perhaps surprisingly, it is food and

beverages that are most commonly stolen.

According to FreightWatch International’s

Bi-Annual Cargo Theft Report (july 2010),

food and beverages (notably meat products,

canned beverages and raw products such as

sugar and coffee) are the most commonly

stolen cargo products in the uS, accounting

for 22% of all theft incidents. This is followed

by electronics, which account for 19%.

There has been a noteable shift in the area

of marine theft claims globally, from low

value pilferage claims to an increase in the

hijacking and theft of full container loads.

They are fewer in number but much bigger

in value. Rather than the uSD 5,000 or uSD

10,000 pilferage claims that Zurich used to

see in the 1990s, we are now seeing uSD

500,000 or uSD 1 million theft claims.

In the past: PilferageCargo security within containers was a

challenge in the past. The industry tended to

consolidate smaller loads into one container,

which meant containers had to be opened

and closed a number of times during the

transportation process, resulting in high

levels of pilferage. Pilferage happened largely

in the ports where the stevedores would

help themselves to the goods being shipped.

Today, with fewer consolidated loads and

improved container security, pilferage has

largely gone away. For example, doors can

be locked in such a way that they cannot be

broken into without it being obvious.

Additionally, security at ports has increased

as a result of the threat of terrorism, so it is

now almost impossible to get past the gates

without significant security clearance.

now: Organized criminal gangsTheft is now on a much bigger scale and

involves organized crime due to a lucrative

black market. With the expansion of the

global economy, goods can be ordered easily

and quickly on the internet from anywhere in

the world, with the consumer having no idea

of the source of those goods and whether

that source is legitimate.

The opportunities created by significant

values concentrated in a container, as well

as the lack of traceability and the ease with

which goods can be sold in a market where

it cannot be tracked, has made cargo theft

much more attractive. Organized criminal

gangs are now sophisticated. Specific goods

can be targeted for theft and stolen or sold

to order based on the demand of the

black market.

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The increase in major hijacking and violent

crime is also due to the fact that the

distribution network is changing. In the uS,

for example, many of the high-value goods

that enter the country come in via Mexico

where criminal gangs are much more active.

Is your product in demand?An example of how organized the criminal

gangs now are, and how they steal to order,

was highlighted during an analysis of a

customer’s loss portfolio. The customer had

seen the number of thefts of one of its

products, a mobile phone, fall signifi cantly,

to virtually none in the previous 12 months.

The reason was not an improvement in

security or re-routing – it turned out that

no-one wanted their outdated product as it

had been replaced by demand for newer

technology in the form of their competitor’s

smart phones. That customer was preparing to

launch a smart phone of their own, and Zurich

warned them to prepare for a signifi cant

increase in theft. Zurich is working with them

now to mitigate this increased exposure.

Sophisticated criminals tracking cargoCriminal gangs are stealing containers,

attacking warehouses where the products

are stored, and taking products that are in

strong demand. The sophistication of these

criminal gangs is highlighted by their ability

to exploit online freight exchange websites

by hacking into those sites and ‘stealing’ the

information. Additionally, the ease of access

and user-friendliness of cargo tracking

facilities offered by large forwarders and

transport providers also represents a new

potential security threat to shippers of

valuable or high-target goods.

The industry has become much better at

securing container shipping information from

the days when terminals would post

information about the shipper and container

number for all to see. There is, however, still

enough criminal reconnaissance conducted

by gangs that allows them to literally ‘shop’

for what they want to steal. This is a problem

as much in northern europe and the uS as it

is in Mexico, Argentina or Brazil.

It is clearly important for companies to assess

the security around their own website, or the

website that they are using to track their

cargo. This should, however, only be one

part of an overall integrated network of

security and loss prevention measures.

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Claim protocolsClaim protocols are documents issued

after the inception of a marine policy that

establish the people and process involved

in mitigating a loss after it occurs. It is

vital to have them in place for the

following reasons:

• Claim protocols identify all personnel

from the insured, insurer and the

producer who should be involved in the

loss, and the process by which the claim

will move from first notice of loss

through settlement and recovery.

• They allow the insured and the insurer

to discuss potential claim situations

before they arise and determine how

they will be handled and who will be

notified. In this way, when a loss occurs,

everyone involved is familiar with the

process and can quickly react to mitigate

the loss.

• Claim protocols also serve as an outline

for the insurer’s global team to recognize,

and appropriately respond to, the losses

of an insured that might occur in another

country or region of the world.

The majority of cargo theft or accidental damage losses occur during the final two or three days of the transportation, rather than at sea.

Vulnerabilities: The final leg of the journeyThe majority of cargo theft or accidental

damage losses occur during the final two or

three days of the transportation, rather than

at sea. When cargo is onboard a ship it is

easier to protect, but after it has been

unloaded at the port, and the final

distribution by road or rail begins, it becomes

much more vulnerable. Of course, there can

be damage to cargo at sea, or there can be

a vessel casualty, but once it gets onto the

roads or rail, the cargo is more susceptible to

loss and / or damage from theft or damage

incidents during transportation.

Infrastructure deficienciesThe nature of the infrastructure in some

territories is a major concern when it comes

to inland transit. Inland transit in Mexico,

China and especially India can sometimes be

problematic, particularly away from ports

and large cities. In some territories, the

quality of warehousing is poor, secure

parking for trucks is non-existent, road

quality is inferior, intermediate storage

conditions are weak and there can be

banditry in remote areas.

In India, the infrastructure is not up to speed,

and the quality of roads, bridges and tunnels

is questionable. China is investing heavily in

infrastructure, so improvements away from

large ports and in the south of the country

will help the transportation of cargo as

growth continues.

Customer checklist: Helping protect cargo on the road

• Ensure that secure parking is used where available.

• Install tracking devices and have a plan to intervene, if necessary.

• Improve container security.

• Secure online cargo tracking facilities.

• Check routes in advance and identify alternatives.

• Train employees in handling and packing of cargo.

• Know your logistics provider and review freight contracts regularly.

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General averageGeneral average is a global maritime industry loss mitigation convention whereby ship owners and cargo interests

proportionately contribute to fully reimburse those in the venture who sustained loss or damage in preventing

the total loss of a vessel, crew and its cargo. undamaged interests must confi rm their contribution by way of a

fi nancial guarantee before their cargo or interest is released while their fi nal contribution is calculated,

Sometimes years later.

General average losses require the coordination of both local and global marine claim professionals. Marine

claim experts locally must manage the loss and interact with local authorities while global resources

assist in arranging the fi nancial guarantee security and communicating with the various interests

involved in the venture.

Increase in general averagesA noticeable trend at the moment is the declaration of many more general average claims.

The majority of these events are the result of engine failures and mechanical breakdown of

the vessel. This is, in part, directly attributable to the lay-up of the world fl eet during the

economic downturn.

Of course, this depends on the carrier, and some are much better at maintaining their

fl eets than others. But the laying-up of the world fl eet has been a big contributor to

the number of general averages that have exploded onto the marine cargo market in

the last two years, in comparison to the number of general averages that were

declared in the previous fi ve-to-seven years. General average was more rare in the

mid-2000s, because with robust freight rates it made more sense to keep the vessels

running and properly maintained.

However, when they are laid up, vessels are often poorly maintained, or not maintained

at all. When the economy starts to recover, these vessels are brought back into service

without any major refi ts or signifi cant maintenance having been carried out, resulting

in an increase in breakdowns and fi res.

Declaring generalaverage

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CaSeSTuDy

Whereismycargo?A common problem can be securing the timely

release of cargo, especially where the goods are perishable. A classic scenario would be

an insured purchasing an entire ship load of perishable goods. During departure, the

vessel is grounded by heavy weather. The insured would be notified that their cargo

had been delayed by the event and would not be delivered on schedule. In order to

have their cargo released for delivery to the final destination on board on another

vessel, they would have to agree to pay significant additional money to the vessel

owners for their contribution toward the damage sustained in the incident to the vessel

and cargo under General Average.

General Average Guarantee In such a situation, Zurich marine claims teams would co-ordinate their activity in its

various offices worldwide to engage the vessel owners, and agree to post a General

Average guarantee for the sum required to allow the goods to be released. Zurich’s

claims teams could assist in arranging for the trans-shipment of the cargo from the

damaged vessel to a new vessel.

The cargo could be delivered with no damage sustained. The goods could then

subsequently be sold in the local market and the insured would be able to continue

conducting business with no out-of-pocket expenses. The insured would see minimal

disruption to their operations and would have met their obligations to their customers.

Global experienceIn such a case, little could have been done to avoid the situation and in the end, there

may be no damage sustained to the insured cargo. By selecting a global insurer with

local marine claim expertise, the financial obligations of the insured can be met and the

cargo delivered, with Zurich managing the claim to the advantage of both companies.

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Salvage guarantees Salvage security posted by cargo owners is driven by an

arbitration board in London under the Lloyd’s open form

salvage contract. In that arbitration process, only certain

underwriters’ guarantees are recognized, primarily

underwriters in London with strong fi nancials. A local insurer

in Malaysia might have diffi culty being able to post its own

security, and may have to buy a bond or other fi nancial

instrument to post security for salvage, which would be

charged back, and become part of the cargo claim.

Recognized guarantees mean fewer delaysThe fi nancial security and salvage guarantees issued by

multinational insurers are recognized by the salvage arbitration

group in London directly. It can be issued quickly, is accepted

immediately, and the cargo can be released much faster for

delivery on to its fi nal destination. until an acceptable

guarantee is posted, whether it is for general average or for

salvage security, the cargo will not be released. A centralized

global process for the review and vetting of salvage security

affords insureds the opportunity to have guarantees issued

promptly on their behalf for the quick release of their cargo.

Salvage–postingsecurity

indirect costs for customers due to delays in the release of cargo• Cancellation of the customer’s contract or purchase order for failure to meet the delivery schedule.

• Cancellation of future orders from the customer and adverse selection to an alternative supplier resulting in future revenue declines.

• Cancellation or reduction in orders from other customers arising from industry knowledge of the delays experienced.

• Interruption of the manufacturing fl ow to replace the goods if there is an extended delay.

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Another example of the sort of problems encountered

by insureds concerns issues with containers and

packaging. A typical scenario could involve retail industry.

A line of clothing that is manufactured in Asia needs to

be shipped directly to a european buyer just in time for

its seasonal release.

However, it would only take a fresh water leak from a

hole in one of the sea containers carrying a part of the

shipment of clothing during the course of transit, to

cause a humidity condition within the container. While

the clothing would not directly be damaged by the

water, the moisture would allow a mildew odor to affect

that part of the shipment.

Shipment rendered un-saleable When delivered to the distribution centre, the clothes,

while physically undamaged, would have a smell that

would deter any would-be buyer, also affecting the other

clothes on the store shelves. It might be that not all the

clothes would be affected, perhaps only particular sizes,

but the clothes would be rendered un-saleable. The

result would be that the entire clothing line, and its

launch, could be threatened.

Risk mitigation Such a problem can be avoided by a simple loss

prevention measure. Having a container inspection

program put in place by the supplier, the hole in the

container could be identified before the container is

loaded with the cargo for shipment to europe, and

the entire loss could be avoided.

Inspection programs of containers and packaging is

a simple yet vital risk mitigation measure that may

remove or reduce potentially devastating, and yet

avoidable, losses.

The solution In such a situation, the Zurich Marine claims team,

in conjunction with local appointed experts, would

implement an action plan that utilized a cutting edge

ozone treatment process to eliminate the mildew odor

and recondition the clothing, making it once again

saleable by the european buyer or distributor.

This solution would not only have reclaimed the affected

clothing, but also prevented a larger issue for the

insured. The entire order could have been cancelled due

to damage to a portion of it, and may have jeopardized

the overall relationship between the designer and retailer

had the clothing line not been available for sale at the

outset of the new season.

CaSeSTuDy

There’saholeinmycontainer!

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Obligations ininternationaltrade

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until recently, the latest version of the terms

was from 2000. However, a new version has

been released, as of january 1, 2011, known

as Incoterms 2010.

What are Incoterms?The Incoterms are delivery terms for the

national and international merchandise trade.

They are obligations of a national and

international purchase contract between

buyer and seller and, amongst other things,

clarify the questions:

• Who pays the transport cost to where?

• Where is the risk transfer, i.e. who

assumes the risk, and when, in the event

of damage or loss?

• Who must take out transport insurance

to where?

• Who is responsible for export and

import clearance?

Incoterms 2010As a result of the new Incoterms, customers

should be aware that:

• the Incoterms must be explicitly agreed

upon between buyer and seller with

reference to Incoterms 2010

• they may not contradict themselves in

the purchase contract

• they can now also be used for

domestic business

• the destination location, destination port

and destination terminal must be specified

more precisely than in Incoterms 2000.

The ICC stresses that all contracts made

under Incoterms 2000 remain valid after

2011. The ICC says that it recommends using

Incoterms 2010 after 2011, but parties to a

contract for the sale of goods can agree to

choose any version of the Incoterms rules

after 2011. However, it is important to clearly

specify the chosen version.

Since 1936, the International Chamber of Commerce (ICC) in Paris has published the Incoterms® or an international, uniform regulation of essential buyer and seller obligations. They are used in offers, contracts, order confirmations, orders, conditions of purchase and sale, and Letters of Credit.

It is also important to remember that the

Incoterms do not regulate:

• transfer of ownership, notification

of defects

• inability to deliver

• handling of payments

• legal venue

• and applicable law.

The Incoterms are neither common law nor

commercial usage.

For more information on incoterms 2010 visit: http://www.iccwbo.org/incoterms

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And it is estimated by the International union

of Marine Insurance (IuMI) that 60% of marine

claims losses during transit are caused by

inappropriate handling, packaging and/or

securing of goods.*

Frequency losses from rough handlingZurich became aware that something needed to

be done about the issue of correct handling of

goods in transit as a result of its work with a

major customer a couple of years ago.

In the course of a claims analysis study, Zurich

discovered that the main problem was not major

damage to cargo but more a question of

frequency losses. And the majority of these losses

Transportyourgoodssafely,ontimeandwithoutlosses

Cargo handling has always been an issue, but in recent years it has become a major concern. It is easy to see why – according to research by the Swiss Federal Institute of Technology*, a third of all deliveries are damaged or delayed.

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The solution: an e-learning platform / blended learningZurich’s answer is to launch the Zurich Cargo Risk Academy,** a simple online

tool offering employees training on cargo handling, organized into different

modules. For example, there is a module on handling dangerous goods,

another on packaging, as well as international trade regulations and terms.

Zurich customers can benefi t from these complimentary courses, which are

accessible anywhere in the world.

Where more detailed or specialized knowledge is required, a blended

learning system is being developed which also involves face-to-face training.

The training focuses on:

• employee and asset protection

• compliance with legal and regulatory requirements

• how to reduce frequency losses

• how to maintain business continuity

• how to manage costs of risks

• balance sheet protection

• sharing of knowledge and best practice.

Overall, the Zurich Cargo Risk Academy aims to help global corporations

reduce their frequency losses in this area, and to comply with their duty of

employee education in a cost-effective, geographically independent way.

TolearnmoreabouttheZurichCargoRiskacademyvisitwww.zurichcargoriskacademy.com

*Swiss Federal Institute of Technology Zurich, university of St. Gallen, 2010.

**Planned launch in selected european countries is August 1, 2011.

were caused by rough or inappropriate handling,

problems with packaging and securing of goods, wrong

handling of commodities, or the wrong choice of

container. Although the average loss was only around

uSD 22,000, frequency was the problem.

Lack of trainingFurther analysis revealed that many of the workers

lacked basic knowledge about the correct handling of

goods and had very little or no training. Zurich found

that in the transport sector generally there was very

little attention paid to training and tuition of employees.

Training opportunities in the open market were either

unavailable, unsatisfactory or too expensive.

Zurich saw that the training issue needed to be addressed

and created a multi-lingual tool for Zurich customers to

provide online training on correct cargo handling, from

choosing the right packaging and the right container to

loss prevention advice for cargo handlers.

An industry problemIt soon became clear when Zurich looked at other

customers that rough handling was a major problem for

the sector as a whole, largely driven by cost factors and

a lack of training options. Zurich saw an opportunity to

help customers by providing a global tool to share best

practices in cargo handling.

ZuRICH CARGO risk aCaDemY

The purpose of the Forum is ‘to reach a better understanding of the

reasons that lead to the application of poor practices in packing of

containers that result in industrial accidents as well as to reach

consensus on a common approach throughout the supply chain

for the correct application and enforcement of the appropriate

standards for packing containers.’

6http://www.ilo.org/public/english/dialogue/sector/techmeet/gdfpc11/gdfpc-consensus.pdf

ensuringsafetyinthe

packagingofcontainers

earlier this year, 83 government, employer and worker representatives met at the Global Dialogue Forum on Safety in the Supply Chain in Relation to Packing of Containers2, organized by the International Labour Organization.

Points of consensusThe Forum adopted a set of ‘Points of Consensus’, which included the following:

• Many accidents and problems in the transport sector are attributed to poor practices in relation to packing of containers, including overloading or misdeclaration of contents.

• Lack of training and knowledge of available standards is a signifi cant reason amongst others for poor practices in the packing of containers.

• Inadequate dissemination of existing standards and guidance, and lack of awareness of this information, not only among workers and their employers, but other stakeholders and authorities, such as police, occupational safety and health (OSH) inspectors, OSH doctors, etc.

• In many cases, there is a lack of development of appropriate plans for the consolidation, distribution, segregation and securing of cargo in containers.

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• Suitable risk assessments are not always carried out in the supply chain so that the levels of risks would be identifi ed, and particular problems would be targeted.

• Those responsible for packing containers are not reached by the existing guidance on good practices for packing containers.

• There is a need for a system for the inspection of containers for proper packing at the point of origin.

• Misdeclaration and the lack of adequate information on container contents and weight.

• Different consignments are packed in the same container and unpacked without the appropriate planning and coordination.

• It is agreed that safety in the supply chain can be improved by implementing good practice through international standards on the packing of containers.

• It is agreed that an IMO–ILO–UNECE* code of practice on the packing of cargo transport units (CTUs) is necessary. The three organizations are requested to proceed with the revision of the existing guidelines for packing of CTUs which would form the code of practice.

• Awareness of and training on consistent standards for the whole supply chain are necessary.

• It is important to ensure that training is more focused and simple.

• Once the code of practice emanating from the revised IMO–ILO–UNECE guidelines for packing CTUs is adopted, it will be important to ensure it is followed up with user-friendly publications (training material, tool kits, etc.) and that the code, and the accompanying publications, are made free and easily accessible and are widely disseminated.

• There is a need to improve the collection and publication of data on accidents related to the improper packing of containers. In this regard, consideration should be given to reviewing the standard classifi cation of accidents in order to identify road and other accidents that are related to improper packing of containers.

* International Maritime organization (IMO)International Labour Organization (ILO)united nations economic Commission for europe (uneCe)

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Riskengineering:greaterpeaceofmind

Everyone knows that prevention is better than cure, or indeed, that risk mitigation is better than having a claim.

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But this is even more true in a world where

just-in-time delivery and time-sensitive

projects have dramatically increased the

cost of business interruption or delay. In a

time of cost-cutting and belt-tightening,

risk engineering can often be seen as an

additional expense, but the value of reducing

losses and interruptions can far outweigh

the cost.

now is the time for risk engineeringIt can be argued that a period of economic

downturn is exactly the time that companies

should be investing in loss mitigation. In

diffi cult times, companies simply cannot

afford losses and the delays they can entail,

and when margins are tight, they may not

have the fi nancial strength to cope with

losses and lost customers. Risk prioritization

is essential in order to optimize the value

from the risk management budget.

Risk engineering can be particularly

important for companies that are starting

to expand and to export their products.

As companies enter new markets, such as

Brazil, Russia, India and China, it is vital that

they have access to as much information as

possible beforehand so they are aware of

the risks they may face.

Re-routing to avoid delayFor example, a Zurich customer required information

about the transport of automotive products to

Russia. With just-in-time processes, any delay would

have been very expensive for the company. Risk

engineers were able to offer four alternative routes,

with a risk grading for each route, allowing the

client to balance the various alternatives with the

customer’s transport cost estimates.

Customer risk engineering checklistHas a risk analysis been carried out?

Where are losses occurring?

Why are losses occurring?

Is the bigger picture being looked at, especially with regard to supply chain interruption? Have interdependencies been mapped?

Is there a mitigation plan in place?

Is the mitigation plan being effectively communicated to all employees?

Is there regular monitoring of the effectiveness of loss prevention measures?

Is the data relating to loss prevention being collected?

Is there an effective system of risk reporting?

Are costs of risks and cost benefi t analyses being carried out?

Is the human element being taken into account?

Is there a global risk management program in place, including an effective multinational insurance program?

...the value of reducing losses and interruptions can far outweigh the cost...

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Loss trends and patternsClaims professionals see the loss trends and

developments:

• How thefts are being carried out.

• Which transportation routes are higher risk.

• Which transportation companies are security minded.

• Which companies have a higher theft incident record.

An insured had a loss trend of water damage to their products originating out

of Indonesia. The trend was identified by the marine claims adjuster who handled

the losses as they were discovered upon delivery of the product in the uS.

The underwriter was advised of the loss trend, and contacted the marine risk

engineering department who then arranged for an inspection of cargo loading

and shipping procedures at the insured’s supplier in Indonesia.

The risk engineer determined that the supplier did not conduct an inspection

of the containers when they were received for the loading of the insured’s

cargo. Such an inspection would have identified deficiencies in the container.

By implementing a container quality check before loading the insured’s goods

for transit to the uS, future similar losses could be prevented or reduced.

Further, the claims and underwriting team were able to advise the insured on

improving its freight contracts with the carrier and increasing the carrier’s liability

if damage occurred to the insured’s cargo as a result of the carrier’s negligence.

Casestudy:Waterdamagetogoods

This information on local loss development

patterns can be collected and passed to the

risk engineering teams who can then share

them with customers to help develop

economically viable, tailor-made solutions.

These might include:

• alternative transportation providers

or routes

• the implementation of dedicated routing

• the use of pre-planned and secure

rest stops.

26

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27

Common-sense loss preventionThere are many areas where risk engineering

can make a difference, including security,

employee training, routing options, packing

improvements and cargo handling. Some risk

engineering measures can be simple and

inexpensive, but can make a huge difference.

And while some may be technical or

innovative, others may be more about

common sense.

A claim paid by Zurich involved a turbine

being transported from Berne, Switzerland to

Chicago, Illinois. The fi rst part of the trip was

managed with the help of a special fl at-bed

trailer. However, the route had not been

checked before the shipment, and at the

entrance to a tunnel, the driver of the

4.20 meter high rig failed to notice the

sign saying the maximum vehicle height is

3.80 meters. needless to say, the turbine

was heavily damaged as the truck crashed

into the tunnel. Checking routes is an

essential and basic part of loss mitigation.

A claim paid by Zurich involved a shipment

of clothing that was on its way by road

from Rotterdam, netherlands, to Zurich,

Switzerland. A storm broke out with

torrential rain, and because the truck driver

had forgotten to properly tie down the

tarpaulin, the cardboard boxes were soaked

by rain and road spray, causing water

damage to the clothing. Human error is a

major loss factor that can be mitigated

through proper training and monitoring.

The human elementIt is important to remember that the human

element is crucial to risk engineering systems

and devices are useful, but it is often the

human element that can have the biggest

impact on mitigating risk. Training is

invaluable for increasing employee

awareness, so that they become involved

and part of the solution.

Risk engineering is not just about preventing

and mitigating losses and reducing potential

disruptions to operations, but is increasingly

about providing the correct risk analysis

methods. These can then enable the

understanding and reduction of the total

cost of risk, as well as prioritizing risk

improvements and enabling informed

decisions around optimizing future capital

expenditures and tracking and measuring

risk improvements.

...systems and devices are useful, but it is often the human element that can have the biggest impact on mitigating risk.

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Infrastructure projects are becoming attractive again to

investors as people look to get some sort of return for

their money, with the recent focus on power plants and

refineries, both oil and chemical.

The project challenge: On time and on scheduleThe big challenge associated with large-scale infrastructure,

power plant and industrial projects is bringing assets online

and on schedule, and so the management of the marine

and transit risks becomes crucial. Moving oversize,

expensive, ‘one off’ or bespoke shipments into extremely

complex settings, markets and jurisdictions is a challenge.

It is even more of a challenge to ensure that this is done

on schedule.

Projects:

thewayaheadinfrastructure projects are beginning to see growth again after a quiet period. From the middle of last year, there has been a noticeable increase in such projects, especially in the Middle east, north Africa, the uS and Asia.

29

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The benefi ts of integrated teams for customers

A single point of contact for the customer.

Claims are dealt with quickly and effi ciently so that supply chains aren’t interrupted and projects aren’t delayed.

The ability to share information: claims information is vital for risk engineering to identify where problems lie and how mitigation measures can be best applied.

Ensure that claims protocols are in place from the start.

Underwriting can refl ect the risk engineering efforts of the customer.

Improved policy terms and recovery prospects.

For large projects like this, it makes sense to

have a global insurer involved that can provide

coverage running across different insurance

lines, such as DSu, marine and construction.

Integrated teamsThe insurer’s job is, of course, to provide risk

transfer, to identify and manage risks, and to

provide global claims services. This requires

not only an insurer with a global presence,

but also one where underwriters, risk

engineers and claims specialists all work

together as an integrated team. Only a

handful of insurers in the marine sector have

dedicated marine risk engineering personnel

– most of them use surveyors.

Marine underwriting, claims and risk

engineering teams cannot operate in isolation

and should work closely together as a unit, not

separate entities. This can lead to an effi cient

workfl ow and relevant risk improvements.

The value of such integrated teams is

particularly important when the insurance

requirements of a project involve a range of

risks in different geographic locations.

Delay in start-upMany infrastructure projects involve the

transportation of key components, and any

delay in their arrival can have major cost

implications. Insurance plays a key role here,

ensuring that if there is a problem, claims

can be resolved quickly and effi ciently, thus

minimizing delays. Marine Delay in Start-up

(DSu) cover, a form of business interruption,

is increasingly in demand from project

owners/investors, and is also a requirement

from many lenders where the project relies

on fi nance.

Seamless coverLarge infrastructure projects often involve

a range of insurable risks. There may be a

supply element, a property element, a

marine transit element, business interruption,

construction all risks cover, and then initial

start-up and operation. Increasingly

companies are looking for seamless cover,

providing protection from the earliest stages

of the project through completion.

Moving oversize, expensive, ‘one off’ or bespoke shipments into extremely complex settings, markets and jurisdictions is a challenge.

29

>

A key component was a new chemical

reactor that was manufactured by MAn

DWe in Germany, also a Zurich customer.

The reactor had been built at MAn DWe’s

factory in Deggendorf, Germany, and was to

be transported 600 kilometers, by water and

road, to the Sasol Solvents Site in Moers also

in Germany. The two-week trip was not a

typical, everyday transportation of goods.

The reactor had a diameter of nine meters, a

height of eight meters, and weighed 570 tons

– which is equivalent to 350 saloon cars!

Delivering a key componentThe challenge was not only to ensure that

there was no damage to the reactor, but that

it arrived at the plant on time. The reactor

was a key component and without it the

new capacity would be unable to begin

production, representing a major business

interruption and putting Sasol-Huntsman’s

significant investment at risk.

Considerable risksThe risks were considerable – the loading

and unloading procedures were particularly

critical due to the enormous weight of the

reactor. Risks during the transportation

included possible damage to the reactor, or

even a total loss. Time delays during the trip

would cause the customer to suffer potential

production losses and if the reactor were

totally destroyed, the production of another

reactor would take another two years. Zurich

provided erection All Risk, Marine Transit,

and Delay in Start up cover for the project,

as well as risk engineering advice for the

transportation of the reactor.

Successful transportationThe transportation comprised a 600-kilometer

trip via various rivers including the Danube,

the Main-Danube Canal, the Main, the Rhine,

and then, after a two-week trip, it was loaded

onto a truck to be taken to the Moers plant

with a police escort. The reactor arrived safely,

undamaged and on time, and the new

capacity remained on schedule to start

production on time.

See the video and full story on

http://www.zurich.com/globalmarine/

The Sasol-Huntsman project

One of the leading chemical maleic anhydride producers in europe, sasol-Huntsman, expanded their production capacity in order to meet growing demand for their products.

The risks were considerable – the loading and unloading procedures were particularly critical due to the enormous weight of the reactor.

Projects:thewayahead

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The un Secretary General Ban Ki-moon, spoke earlier this year

at the launch of the World Maritime Day, where the theme for

2011 was: ‘Piracy: Orchestrating the Response’1. Ki-moon said:

“Piracy seems to be outpacing the efforts of the international community to stem it… Despite the deployment of signifi cant naval assets to the region, the number of hijackings and victims has risen signifi cantly. more needs to be done.”

7http://www.un.org/news/Press/docs/2011/sgsm13386.doc.htm

Piracy:

notgoingawayDespite increased attention from governments, global organizations and the maritime sector, piracy continues to be a major problem.

31

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The nature of the problemThe statistics reveal the scale of the problem. More people were

taken hostage at sea in 2010 than in any year on record, according

to the latest global piracy report from the International Chamber

of Commerce (ICC) International Maritime Bureau (IMB). Pirates

captured 1,181 seafarers and killed eight. A total of 53 ships

were hijacked.

The number of pirate attacks against ships has risen every year for

the last four years, the IMB revealed. Ships reported 445 attacks in

2010, up 10% from 2009. While 188 crew members were taken

hostage in 2006, 1,050 were taken in 2009 and 1,181 in 2010.

According to the IMB, hijackings off the coast of Somalia accounted

for 92% of all ship seizures last year with 49 vessels hijacked and

1,016 crew members taken hostage. A total of 28 vessels and 638

hostages were still being held for ransom by Somali pirates as of

31 December 2010.

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Somalia – no signs of improvementAccording to specialist intelligence company exclusive

Analysis, there has been no improvement in the number of

hijacked vessels being taken by Somali pirates: ‘The shore

situation in Somalia has made little difference to the ability

of pirates to carry out their work with impunity. The

number of ships held has increased dramatically in the last

year – they are also being kept for longer before ransoms

are paid.’

The company said that the last year has seen attacks

across the whole Somali Basin and Arabian Sea but

concentrating in the Arabian Sea for the last three months.

“We expect to see more attacks and hijacks off Tanzania

and Kenya in the coming months with some activity into

the Mozambique Channel,” it adds.

Method of attackThere has been little change in the method of piracy

attack, using a mother ship as a base and then sending

out fast skiffs with fi ve or six pirates armed with AK-47,

rocket propelled grenades and long ladders for scaling the

ship’s side.

According to exclusive Analysis, the use of mother ships is

not new, but the size and quantity has increased – they

give range and sustainability to the pirates for some weeks

and the ability to carry many pirates in order to carry out

multiple attacks. exclusive Analysis has seen up to 60 on

one mother ship.

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Piracy hits all-time highPiracy at sea hit an all-time high in the fi rst three months of 2011,

with 142 attacks worldwide, according to the International Chamber

of Commerce (ICC) International Maritime Bureau’s (IMB) global

piracy report. The increase was driven by a surge in piracy off the

coast of Somalia, where 97 attacks were recorded in the fi rst quarter

of 2011, up from 35 in the same period last year.

Worldwide in the fi rst quarter of 2011, 18 vessels were hijacked,

344 crew members were taken hostage, and six were kidnapped.

A further 45 vessels were boarded, and 45 more reported being

fi red upon. In the fi rst three months of 2011, pirates killed seven

crew members and injured 34.

Of the 18 ships hijacked worldwide in the fi rst three months of the

year, 15 were captured off the east coast of Somalia, in and around

the Arabian Sea and one in the Gulf of Aden. IMB fi gures showed

that Somali pirates were holding captive 596 crew members on

28 ships as at the end of March 2011.

nine incidents were reported off Malaysia in the fi rst quarter of

2011, with fi ve incidents recorded for nigeria.

Of the 18 ships hijacked worldwide in the fi rst three months of the year, 15 were captured off the east coast of Somalia...

33

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Ships held for longerThe average length of time that ships are held for has been steadily

increasing over the last year – around 120 days at the moment, some

longer, some shorter – depending on the owner’s response to the

ransom demands, says exclusive Analysis. On the issue of the pirates’

attitude to cargo, exclusive Analysis says they have seen little

evidence of cargo being used, looted or transshipped in any

signifi cant quantities: ‘The bulker, tankers and container vessels

cannot have their cargo removed. The pirates have no ports or

capability to do so. normally the cargo will be part of the deal –

in most instances it can’t be moved anyway, although perishable

goods will be lost.’

Defensive measuresWhat are the most successful, cost-effective defensive measures that

can be taken by ship owners to deter attacks? exclusive Analysis lists

them in order of success:

• Armed guards

• A ship that can do more than 20 knots

• Razor wire

• An alert crew

34

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the uK and President Obama’s executive Order Concerning

Somalia of 13 April 2010. The former makes it illegal to pay

money, directly or indirectly, if it is known or reasonably

suspected that it may be used for terrorism. The latter prevents

uS persons, and the defi nition of a uS person is wide, from

making payments to certain persons, essentially specifi ed

terrorists and those determined to be engaged in acts

threatening the stability of Somalia.”

He adds, “We fi nd that it pays off to have a close liaison with

the relevant authorities involved in policing those provisions –

the Serious Organized Crime Agency in the uK, and the Offi ce

of Foreign Assets Control in the uS – when dealing with

situations involving the payment of ransom to pirates, so as

to ensure that the payments are duly authorized and legal.”

Tackling the root problemIn the longer term, any solution needs to move beyond

deterrence efforts and tackle the issue in Somalia itself. un

Secretary General Ban Ki-moon explained: “We need to support

alternative livelihoods and the rehabilitation of coastal fi sheries.

We need to develop Somali capacity to deal with piracy-related

activities on land and in its territorial sea. This must be linked to

the broader efforts to develop Somalia’s police and coast guard,

as well as its justice sector, to ensure that persons suspected of

acts of piracy are prosecuted.”

Of course, it is not just the seas around Somalia that are subject

to piracy. exclusive Analysis points to the west coast of Africa in

the area of nigeria and neighbouring countries, as well as

Bangladesh, the South China Sea and Indonesia, and anchorages

off Singapore.

There is some positive news, however, that highlights how

international efforts are beginning to successfully tackle the

problem of piracy. The IMB said in its report that while attacks

off the coast of Somalia remain high, the number of incidents

in the Gulf of Aden reduced by more than half last year, with

53 attacks in 2010 down from 117 in 2009.

According to exclusive Analysis, having armed guards on vessels

undoubtedly deters hijackers. Indeed, no ships with armed guards

have been captured. As to the impact of naval forces and other

moves by the international community, exclusive Analysis says that

they are able to keep a steady state: “Without them the picture

would be considerably worse. The ocean area is just too large to be

everywhere at once. Too many ships that are hijacked have taken

few measures to protect themselves adequately in the hope the

navy will protect them. This is a dangerous attitude.”

Regulatory issuesWhen it comes to the payment of ransoms, there is a regulatory

element that has to be considered. Christopher Dunn, Managing

Partner, Waltons & Morse explains: “In the marine fi eld, and

particularly in the uK and the uS, the main regulatory issue is ransom

payments to pirates, given that pirates are criminals and may be linked

to terrorists, although the April 2010 uK House of Lords Select

Committee Report ‘Operation Atlanta’ indicates that there is

no evidence of such a link to Al shabab despite a confl ation in

some quarters.”

According to Mr. Dunn, a specialist marine insurance practitioner, “

of particular relevance are section 15 of the Terrorism Act 2000 in

35

36

The aim of the Centre is to participate in and

contribute to the growth and development

of Shanghai as an international finance

centre and global shipping hub by 2020.

The Centre will also provide benefits for

Zurich customers through its focus on

studying and forecasting new developments

and trends in the fields of global shipping

and financial industries.

The research projectsZurich has brought together some well-

known specialists in shipping and finance

from foreign and domestic academic

institutions, working closely with the Chinese

ZurichInternationalResearchandDevelopmentCentreofShippingandFinance

The Zurich Research and Development Centre (R&D Centre), based in Shanghai, China, has now been in operation for more than a year, having been officially inaugurated in March 2010.

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government. In the last year, the Zurich R&D

Centre has successfully completed ten

research projects, which were led by eight

research teams.

The projects included a report on liability

insurance for shipping agencies and the

development of shipping insurance in

Pudong, China, produced by Professor Wang

Xuefeng, the Dean of the International

Shipping School, Shanghai Maritime

university, as well as marine insurance

studies by Patrick Donner, Associate

Academic Dean of World Maritime

university. Other projects covered topics

such as the development of shipping-related

derivatives markets in Shanghai, and aircraft

and ship-related fi nancing.

Policy referencesThe projects have been taken by the

government as policy references, and

the recommendations made are being

adopted to roll out new policies and

innovative reforms about market access,

shipping-fi nance and tax incentives.

james Liu, Senior Project Manager at

the Zurich International Shipping and

Finance R&D Centre, says that the

recommendations to support the

development and upgrading of shipping

agencies’ liability insurance products

will provide better risk protection to

customers, and the recommendation to

develop shipping industry funds in

Shanghai will benefi t ship fi nancing,

building and maintenance businesses.

37

Future projectsLooking ahead to the second year of

operation, the Centre is undertaking a

number of new projects that will

benefi t customers. In particular, james

Liu points to a study on port risk

management and insurance solutions

that he believes will benefi t customers

by giving them a better tool to

analyze and address the risks in

operating the port facilities including

piers, docks, warehouses, and also

provide new business opportunities to

logistics companies and freight-

forward companies.

He also points to research on current

market access benchmarks for foreign

service providers, which he says will

provide new policy advice to the

government to remove unnecessary

barriers for foreign fi nancial and

shipping services companies to enter

the markets of Shanghai.

38

Contributors

sean Dalton Senior Vice President, Head of Marine, uS

mike Davies Chief underwriting Officer Marine, Asia Pacific

steve Gillen Head of General Insurance Marine Claims

Howard kingston General Insurance underwriting Manager Marine

Oliver Daniel Lopez Senior Risk engineer, Switzerland

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39

For more information, please contact your broker or your Zurich contact. Alternatively, visit: http://www.zurich.com/globalmarine

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05/1

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CA

The information in this publication was compiled from sources believed to be reliable and is provided for informational purposes only. All sample policies and procedures herein may serve as a guideline, which you can use to create your own policies and procedures. We trust that you will customize these samples to reflect your own operations and believe that these samples may serve as a helpful platform for this endeavor. Any and all information contained herein is not intended to constitute legal advice and accordingly, you should consult with your own counsel when developing policies and procedures. We do not guarantee the accuracy of this information or any results and further assume no liability in connection with this publication and the sample policies and procedures, including any information, methods or safety suggestions, contained herein. Moreover, Zurich reminds you that this cannot be assumed to contain every acceptable safety and compliance procedure or that additional procedures might not be appropriate under the circumstances. This is also intended as a general description of certain types of insurance and services available to qualified customers through the companies of the Zurich Financial Services Group, including, in the united States, Zurich American Insurance Company, Zurich Towers, 1400 American Lane, Schaumburg, Illinois 60196; in Canada, Zurich Insurance Company Ltd, Canadian Branch, 400 university Avenue, Toronto, Ontario M5G 1S7; and outside the u.S.A and Canada, Zurich Insurance Plc, Ballsbridge Park, Dublin 4, Ireland; Zurich Insurance Company Ltd, Mythenquai 2, 8002 Zurich, Switzerland; Zurich Australian Insurance Limited, 5 Blue Street, north Sydney, nSW 2060, Australia and other legal entities, as may be required by local law. Your policy is the contract that specifically and fully describes your coverage. The description of the policy provisions contained herein gives a broad overview of coverages and does not revise or amend the policy. Certain coverages are not available in all jurisdictions. You are in the best position to understand your business and your organization and to take steps to minimize risk, and we wish to assist you by providing the information and tools to help you assess your changing risk environment. In the united States, risk engineering services are provided by The Zurich Services Corporation.

www.zurich.com