Cargo insurance covers loss or damage to the property in transit up to a declared set limit. Simply it is there to put the person back in exactly the same position as prior to the loss and one is not to profit from the incident. Although sometimes an uplift (normally 10%) applies, this is not for profit but for miscellaneous costs normally which are uneconomical to justify.
There are many different types of cover and clauses that can be added to suit the merchant's needs. When someone purchases cargo insurance, they may assume it covers all eventualities. However, this is not case, and some notable confusions are:
All cargo insurance covers theft.
Refrigerated cargo insurance covers any period of breakdown for as long as damage occurs.
Cargo insurance covers all types of leakage.
It covers seizure or refusal by customs by a change in regulation after sailing.
Cargo insurance covers damage or loss for unreasonable delay outside their control on time sensitive cargo.
Cargo insurance covers the clean-up and/or disposal costs.
All the statements above are all incorrect.
TYPES OF CARGO INSURANCE
All Risks - ICC A
The most common type of insurance and as the name suggests covers all risks excluding the name exclusions along with the important requirement that there must be a fortuity.
Benefits: Most extensive cover. Burden of proof is on insurers to prove otherwise. Covers piracy.
Disadvantage: Most costly as well.
Named Perils - ICC B
The least common type of insurance, but more extensive than its sister ICC C clauses. Importantly it covers sea entry into the hold of the vessel and dropping whilst loading/unloading onto the vessel.
Benefits: More extensive than C and useful if shipping higher value used goods or commodities susceptible to salt water.
Disadvantage: Does not cover theft and coverage only extends if peril can be determined.
Named Perils - ICC C
The least extensive of all types of insurance and covers risks such as fire/explosion or overturning on land carriage. Often a default policy for used goods.
Benefits: Offers the same coverage as all for general average and useful if the merchant wishes some self-insurance.
Disadvantages: Very little is covered unless a major incident occurs.
COMMON GENERAL EXCLUSIONS
Is excluded even if caused by a peril insured against. For example, where the vessel was involved in a collision, but the subsequent delay resulted in the damage to the cargo. This is excluded and therefore it is important the assured acts as a prudent uninsured for all time sensitive cargoes.
Inadequate or Insufficient Packaging
Is excluded and this exclusion extends to the stowage inside containers. What is often overlooked is this exclusion will cover poor ventilation which results in container sweat or deterioration.
This excludes any loss or damage that has arisen from the very nature of the goods. This could be from infestation or heating of grains, wetting from hydroscopic cargo or rusting of metal products. However, it doesn't mean these cargoes cannot be insured. As long as adequate precautions have been taken this may no longer be an inherent vice fault. For example, a shipment of glass arriving cracked may not be inherent vice if an impact is reported. Poor Stuffing and inherent vice often overlap.
It is very important to bear in mind the origins of insurance wordings have been around for centuries and have been slowly adapted. As flaws or perils occur, this has given rise to improvements and updates throughout various stages in history. In a similar way underwriters have looked to exercise greater care in assessing risks and hull clauses are a perfect example of this. In order to manage risks and losses, underwriters brought in the introduction of the Running Down Clause hoping to exercise safer navigation by making the shipowner bear a proportion of the loss in the event of a collision. As vessels and claims grew this became unsustainable which in turn brought about P&I Clubs and changed shipping forever.
Under the perils section the wording refers to "caused by" but this should really say "proximately caused by" because a hull loss normally arises from a series of events that may even go back years. Take, for example, a faulty repair on a valve which in turn led to stresses on the pipe causing leakage and subsequently the fluid combusting resulting in explosion. The proximate cause or peril is going to be the faulty repair and not the explosion.
Perils of the Sea
A very descriptive term which could have endless meanings and involves fortuitous accidents of or involving the sea. It has been known to include heavy weather, collisions or groundings. What it is not is an ordinary action of waves, winds or entry of sea water. The Marine Insurance Act specifically states, "that the vessel is deemed seaworthy when she is reasonably fit to encounter the ordinary perils of the seas of the adventure insured". Therefore, if a vessel sinks because of ordinary winds/waves, even if more severe than normal, this is not a 'peril of the sea'. Similarly, if the hold of the ship is flooded, this is not a peril of the sea although may indeed be another form of peril.
Fire or Explosion
Whilst the name may be self-explanatory, coverage is not so straight forward. The insurers expect the vessel to have a degree of fitness and that extends to even after the event has taken place. Insufficient fire-fighting equipment or even inadequate training would render the vessel unseaworthy and goes back to the Marine Insurance Act whereby the vessel must be fit for the voyage.
Violent Theft by Persons from Outside the Vessel
As the name suggests, whilst piracy involves the capture/seizure of the vessel normally in open water, this clause covers incidents where gangs have targeted the vessel whilst at berth.
Peril is not used for jettison because it crosses over from general average where the policy would also respond even if under the absorption clause. Dropping anchor to avert a collision may be an example where this can be used.
An illegal act of violence of detention, or any depredation, committed against the vessel but commonly used for ransom rather than robbing these days.
Contact with Land Conveyance, Dock, Harbour Equipment or Installation
As the name suggests, sometimes referred to as fixed and floating objects. Only covers damage to the vessel and not liability to buoys, cranes, etc.
Earthquake, Volcanic Eruption or Lightning
Lightning is not a peril of the seas nor is it likely the others are defined as so, therefore shown as a separate peril.
Accidents in Loading, Discharge or Shifting Cargo, Fuel, Stores or Parts
An addition to cover, losses would not fall under perils of the sea because the very nature of these accidents may have some human element.
Contact with Satellites, Aircraft, Helicopters or Similar Objects, or Objects Falling Therefrom
Covers unusual but modern threats from above.
Bursting of Boilers, Breakage of Shafts
Does not cover any costs of repairing or replacing the boiler which burst on shafts. Can overlap with fire of explosion but really intended when breakdown is not violent or noisy.
Any Latent Defect in the Machinery or Hull
Does not cover the cost of correcting the latent defect. The principle is that there can be no recovery for the latent defect issue but the consequential damage that may follow.
Negligence of Master, Officers, Crew and Pilots
Providing the loss has not resulted from want of due diligence of the assured, owners and managers.
Negligence of Repairs or Charterers Providing Such Repairs, or Charterers
Not an assured under the policy, providing the loss has not resulted from want of due diligence of the assured, owners and managers.
Barratry of Master, Offices or Crew
Refers to gross negligence but a higher standard of care is expected in respect to the assured's due diligence when illegality or gross negligence is concerned.
BURDEN OF PROOF
Once the assured has made out his prima facie case that was the proximate cause of loss, the burden of proof lies on the underwriters to prove otherwise. For most hull claims the loss is never clearly obvious, so the assured does not need to prove beyond all reason doubt but simply on the balance of probabilities in his favour the loss arose under a peril insured against. Often there may be one or two possible perils, assured must present the strongest case and the same applies to the underwriters, they must maintain their arguments.
RUNNING DOWN CLAUSE - COLLISION
Unlike cargo policies, hull clauses cover liability for the assured as follows:
Underwriters agree to indemnify the assured usually for 3/4th of any sum paid to other persons by reason of the assured becoming legally liable by way of damages for:
8.1.1 - Loss of or damage to any other vessel or property on any other vessel.
8.1.2 - Delay to or loss of use of any such other vessel or property thereon.
8.1.3 - General average of, or salvage under contract of any such other vessel or property. Where such payment by the assured is in consequences of the vessel hereby insured coming into collision with any other vessel.
Importantly but in the same way as all liability insurance policies the indemnity is only due when sums have been paid by the assured therefore protecting the underwriters from claims directly. However, there are some very important exceptions to this rule where the intentions of P&I cover are obvious: The exceptions are:
6.4.1. - Removal or disposal of obstructions, wrecks, cargoes or any other thing.
6.4.2 - Any real or personal property or thing whatsoever except other vessels or property on other vessels.
6.4.3 - The cargo or other property on the insured's vessel.
6.4.4 - Loss of life, personal injury or illness.
6.4.5 - Pollution and contamination.
In the same way as the Marine Insurance Act 1906 covers the assured for general average/salvage where interests are the same but the sistership clause offers the same protection if the vessels involve the same assured.
GENERAL AVERAGE AND SALVAGE
In respect to hull insurance this covers the vessel's proportion of salvage, salvage charges and/or general average, reduced of any under insurance, but in case of general average sacrifice of the vessel the assured may recover in respect of the whole loss without first enforcing their right of contribution from other parties.
Losses in respect to delay are not covered under the York Antwerp Rules and subsequently fall outside cover.
GENERAL AVERAGE ABSORPTION CLAUSE
A clause that is intended to assist the owner and insurer alike. Declaring general average is often expensive, time consuming and can be damaging commercially especially for small amounts. The absorption clause has a simple fix to this problem where underwriters agree to settle in full, from the ground up without having to declare general average. This is limited to certain limits and any claim including adjuster's fees cannot exceed this amount. Otherwise general average needs to be declared as normal.
Section 55 (2) of the Marine Insurance Act 1906, the codifying marine insurance law in England, states:
(a) The insurer is not liable for any loss attributable to the wilful misconduct of the assured, but unless the policy otherwise provides, he is liable for any loss proximately caused by a peril insured against, even though the loss would not have happened but for the misconduct or negligence of the master or crew;
(b) Unless the policy otherwise provides, the insurer for ship or goods is not liable for any loss proximately caused by delay, although the delay may be caused by a peril insured against; and
(c) Unless the policy otherwise provides, the insurer is not liable for ordinary wear and tear, ordinary leakage and breakage, inherent vice or nature of the subject-matter insured, or for any loss proximately caused by rats or vermin, or for any injury to machinery not proximately caused by maritime perils.
This automatically excludes any claim, whether cargo or hull, for losses attributed to wilful misconduct, wear and tear, inherent vice and delay. Most marine insurance policies follow the same principle.
In addition, the hull clauses also contain additional exclusions:
War and strikes.
Terrorist, political and malicious acts.
Radioactive contamination chemical, biological and electromagnetic weapons.
Losses Commonly Not Insured Under Hull and Machinery Clauses
Increased Value: Additional exposure in the event of total loss.
Protection and Indemnity Risks: Loss of life, cargo liability, repatriation, wreck removal, pollutions, harbour liabilities.
1/4 Collision Related Claims: Original concept was for owners to bear the costs to become more due diligent, however nowadays often P&I pick up the remaining share or even all and sometimes under the hull.
Loss of Charter Hire: Loss in charter hire following an incident.
Loss of Freight: Loss of freight following an incident.
War Risks: War and strikes incidents.
P&I insurance may be taken out by the charterer, bareboat charterer, owner or even include space on a vessel, but it involves liabilities in the operation of a vessel. Since there are numerous other risks associated with their legal and contractual liabilities, this role falls outside activities as freight forwarder or operating as a NVOCC and subsequently insurance provided for them.
As a charterer they may operate a voyage or time charter whereas an owner is more a permanent fixture but they have very different risks and interests so whilst the same insurer may insure both, there is a degree of separation required in handling their claims. Even to a certain extent there may be conflicting interests, P&I Clubs are accustomed to these problems and often have very clear reporting lines when incidents happen.
Whilst not limited but most owners' P&I are placed within a mutual or non-profiting insurer and were originally represented by shipowners, and look after the interest of shipowners, therefore tend to be a leading force in dictating the rights and wrongs in shipping generally. There are a number of fixed premium insurers as well who do dominate the brown water trade.
In 1899 the formation of the International Group (IG) was created to represent the mutuals as a group, and today this represents over 90% of all blue water tonnage. As part as the IG group each member enters a pooling agreement whereby after a certain limit the group as a whole contributes to an individual loss to protect each the member. This is a very unique system where a shipowner may have to contribute to a competitor's loss.
Personal Injury, Illness and Death
Liability for injury, illness, or death.
Crew substitute replacement.
Loss of belongings.
Damage to Cargo
Liability to cargo itself.
Liability to bunkers.
Liability for disposal/storage, other charges.
Liability for uncollected general average contribution.
Liability to fines.
Liability to clean up costs.
Liability for preventative measures.
Liability to restorations/claims.
Liability in cost of raising, removing and destruction of wreck.
Liability in carrying out raising, removing and destruction of wreck.
Fixed and Floating Objects
Liability to buoys, small fishing boats and nets, and coral reefs.
Liability to peers, docks, quays and other port installations.
Liability to shore cranes and other port facilities.
Collision - Running Down Clause (RDC)
Often cover the hull uninsured proportion in respect to collision liability (1/4).
Liability costs for repatriation of stowaways.
Liability costs for accommodation and security.
Provision of Security
Whilst purely discretionary but P&I Clubs often assist/provide.
Undertakings/Guarantees in the event of arrest or threat of arrest from risks covered.
Freight & Demurrage and Defence Costs
Whilst not covering the financial loss but provide legal assistance in defending disputes arising.
Note: Charterers and owners may decide to self-insure to some degree cargo and other related losses by applying a very high deductible because their main concerns may be the other high-risk losses imposed against them by Port and/or Government Authorities.
Liability and E&O Insurance
Liability insurance provides protection from claims whilst acting within your insured's services. Whether you are acting as a freight forwarder, NVOCC, customs broker or warehouse operator, coverage can vary greatly, and it is very important to know what is covered.
What is important to note about these types of covers is the purpose to defend/protect the assured and cannot be used in any way as a substitution for an open cargo policy. Claims will be limited as applicable to international conventions, and also importantly insurers will look to defend, negotiate or avoid claims reported so there will be very little shipper's satisfaction if they don’t have cargo insurance.
Whilst liability insurance rarely follows a standard format like cargo insurance, it is normally very individually based on the provider. It is important to look out for the following:
What is important to note about liability covers is it is there to defend/protect the assured and cannot be used in any way as a substitution for an open cargo policy. Claims will be limited as applicable to international conventions and it’s also important that insurers will look to defend, negotiate or avoid claims reported so there will be very little shipper's satisfaction if he doesn't have cargo insurance. There is no substitute for cargo insurance.
Some policies require that claims must be made from the assured's customer for coverage to be engaged so it may be important to be aware of this or change provider. This obviously offers a cheaper option, but claims do not necessarily arise just from their customers these days and more and more from the carriers to thirty party contractors. Most of these claims were passed back down the chain or never collected but master carriers have changed their merchant’s clause on the back of the bill of lading to make it easier to pursue agents/booking parties and forwarders.
Third Party Damage
Whilst this follows from cross liability claims but covers damage to containers, equipment, craft or other people’s cargo. Claims should generally get passed down the chain but it’s generally not so easy and trying to pursue shipper in certain parts of the world can be uneconomical and time consuming. Such coverage avoids the burden of being stuck with these types of claims.
Delay & Consequential Liability Losses
Whilst generally excluded under carriers’ terms and conditions, these claims do arise even if they are almost always refuted. Some policies which include this offer a lot of relief for the assured. Whilst the limits may be heavily capped but almost always these claims are refuted and defended. By including these in the policies it avoids insurers leaving the assured to handle and they can pick up with their expertise.
Customs fines are generally excluded under most liability policies but with the proposed SOLAS requirement this may be a problem for forwarders and agents. Any fines will generally not arise from errors & omissions, but fraudulent information provided by the shipper who will unlikely pay.
This has become an increasing problem for everyone, and the carriers are cracking down heavily. They have dedicated departments and specifically focus attention on the forwarder/booking party because they are the easiest. Costs can easily run into six figures and with threats of blacklisting and legal proceedings there is little escape from these types of claims when they happen. Whilst it is important to inform insurers promptly, adequate limits should be obtained for protection.
ERROR & OMISSION
This is not something always automatically covered in liability policies so important to double check with your insurance provider. This involves claims which occur because of any wrongful act or omission from the assured or their agents whilst during their insured's service.
It is incorrectly believed that if a loss or damage arises from an error & omission this voids limitations and any claim submitted by the claimant will need to be paid in full. This is incorrect because international conventions generally still do apply and the only exception where they can be broken is during gross misconduct. Simple accidental mistakes or misunderstandings do not fall under this category. There is no substitute for cargo insurance.
Some policies require that claims must be made from the assured's customer for coverage to be engaged so it may be important to be aware of this or change provider. This obviously offers a cheaper option but claims from carriers, customs and third parties will not always be provided by the customer. An error provided by the shipper/customer is not an error & omission so would not fall under this category and if an error arises from assured's wrongdoing then claim will most likely come directly. Is a flaw in some policies.
Policies generally cover wrongful release if failure to follow proper instructions, but that involves the document of title. It is not an error & omission if knowingly releasing cargo without a document of title but against a request or security instead. That is a deliberate act and therefore it is essential the assured follows strict requirements to fully protect themselves if this falls outside of cover.
Failure to Purchase Cargo Insurance
Some policies cover or specifically exclude this. Even if covered this generally has to be requested in writing to avoid any abuse on cover. In such an example, limitation would not apply, and any claim should be adjusted on the same terms if they purchased.
GENERAL EXCLUSIONS UNDER LIABILITY & E&O
Chartering Any Vessel or Aircraft - Common exclusion outside their insured services.
Commercial Losses - Involves failure to collect freight and other charges.
Customs Seizure and Strikes - Often considered an exclusion because it often involves regulatory issues that fall outside insurers control.
Cyber Fraud - This is unfortunately quite a modern-day problem where many exclude this although some offer as an extension.
Fraud or Criminal Activity - Common exclusion from such activities arising from the assured and their employees.
General Liability - Excluding losses arising from out of premises, products and bodily injury since it falls outside of insured services.
Insolvency - Recently insurers have taken a harder approach to insolvency exclusion and sometimes it is not just restricted to the assured.
For details on other exclusions, please consult your insurance provider.
Seizure or Arrest
This excludes losses where customs or powers have taken the cargoes outside a merchant's control and often arises from prohibited or mis-declared cargo.
"All Risks" or A Clauses contain the words "(piracy excepted)" in the capture/seizure/arrest etc. exclusion in Clause 6.2. A claim relating to piracy in respect to physical damage or the payment of ransom under general average would be covered under ICC A Clauses but not B & C. The reason, coverage under B & C does not make reference to "(piracy excepted)" and would simply fall under seizure.
This excludes losses arising from insolvency or financial default of the owners, managers, charterers or operators of the vessel and would also exclude forwarding expenses if it involves termination of voyage.
Note: Other exclusions should be referred to under the policy exclusion clause.
ADDITIONAL EXCLUSIONS FOR VARIOUS COMMODITIES
Insurers evaluate risk and it is not gambling as one might deduce so often on certain types of commodities there may be additional exclusions:
Electrical Appliances - Often contain a clause to exclude loss or damage arising from breakdown or derangement unless covered under an insured peril.
Recommended: The merchant may wish to use impact detectors inside containers to evidence any incident. Without any evidence no claim will be considered.
Hazardous Cargo - Often will not cover expensive clean-up costs.
Recommended: The merchant may request a debris removal clause under his policy.
Liquid Cargo - Often will not cover ordinary leakage or defined as sudden.
Recommended: Install impact detectors to determine an incident when no external damage is noted and/or include GOT clause in the policy.
Used Goods - Often will only be insured on limited perils.
Recommended: The merchant may wish to instruct pre-shipment inspections for high value goods and obtain insurers agreement to extend cover to all risks.
Reefer Cargo - Often will only cover breakdown on reefer units for 24 hours or maybe longer.
Recommended: The Merchant may wish to discuss with their insurance provide for a lesser period for more sensitive cargo such as medicine.
Second-hand Vehicles - Often will exclude pilferage, dents and scratches unless from a peril insured against.
Recommended: The merchant may wish to carry out a pre-condition report.
Steel or Metal Cargo - Often will not cover rust unless caused by a peril insured. i.e. hold flooded.
Recommended: The merchant may wish to conduct own tests even if Silver Nitrate test prove no evidence of salt water.
CARGO EXTENSIONS/ADDITIONAL CLAUSES
These will need to be discussed and agreed with your insurance provider. Given the countless number of risk scenarios of commodities and geographical implications, policies need to be tailored. Some notable extensions are:
Brands Clause - Assured has a duty to mitigate any loss but this clause allows the assured to forgo salvage sale and dispose the cargo if they feel it's necessary to protect their brand name. Important for corporations.
Debris Removal Clause - This allows coverage for removal and destruction of cargo which is not normally covered under cargo insurance. The clause often has limits to 10-25% of cargo value but is often applied on top of the insured amount. It is an important clause for cargoes that when damaged have no salvage value and need to be disposed of carefully.
Extra Expense Clause - Allows costs, including chatering, storage, etc. to forward cargo to destination involving any interruption of the voyage. Normally capped but important clause for bulk cargo, especially to avert a delay type of losses. Generally, extends cover even if the owner/charterer defaults and cargo stranded.
Forwarding Expense Clause - Similar to the extra expense clause, but generally for containerised shipments. Generally, extends cover even if the owner/charterer defaults and cargo stranded.
Guaranteed Outturn Clause - Allows claims for shortage and leakage to be assessed by documentary evidence which would normally exclude paper losses. Important clause for bulk and liquid cargo.
Local Clause - In some jurisdiction it may be required to purchase local insurance which does not offer the same protection as international providers. This clause allows assured to benefit from the full protection under the policy and avoid double insurance. Important in certain jurisdictions.
Packing Clause - Insurers agree not to use the insufficiency packing exclusion unless carried out by the assured/representatives' knowledge. Important clause for forwarders/NVOCC if they are carrying out these roles and assisting with insurance.
Sellers Interest - Covers claims when cargo sold FOB and C&F and buyer refuses or fails to pay. Buyers Interest is the same but vice versa.
Note: Other extensions should be discussed with your insurance provider.
LONDON INSTITUTE CARGO CLAUSES v AMERICAN INSTITUTE CARGO CLAUSES
The clauses are similar with very little difference. However, there are a few minor differences that may have an advantage whether you are a forwarder, shipper, or receiver.
London ICC - Covers cargo first moved into the warehouse for the purpose of loading for transit.
AIMU - Covers cargo when cargo leaves the warehouse for commencement of transit.
Result: The London ICC has greater coverage and is important from a forwarders point of view. Whilst loading may have certain cover, if the forwarder is in charge of this operation the subrogation waiver can be a benefit.
London - Does not cover inadequate packing by assured if packed prior to the attachment of risk. Also specifically mentions "packing" will include stowage into a container.
AIMU - Excludes inadequate packing defined to include stuffing of container when done by assured prior to transit.
Result: Very much the same but London has a slight edge because it extends cover after being moved as defined in the transit clause.
Notice of Loss
London ICC - Requires the assured to notify in "reasonable dispatch in all circumstances" within the assured's control.
AIMU - Requires the assured to "promptly" report any loss or damage that may give rise to a claim.
Result: Whilst very similar, London clauses provide some more flexibility especially if loss details are still unclear.
London ICC - Excludes loss or damaged by delay even if caused by a covered peril, except where expenses payable under general average.
AIMU - Warranted free of claim for loss of market or for loss, damage or deterioration arising from delay, whether caused by a peril insured against or otherwise.
Result: London clauses appear to offer slightly wider scope for delay in general average matters. Both exclude delay, even if caused by an insured peril or not. For example, grounding of a vessel resulting goods missing their sale by date.
London ICC - Excludes unseaworthiness of the vessel for coverage.
AIMU - Covers misconduct of the carrier if shipper is innocent.
Result: AIMU offers greater coverage for the shipper when he has done no wrong.
Whilst there is little difference between London ICC and AIMU, London may suit the freight forwarder better because of the transit clause especially in respect of any subrogation waiver clause. A consignee may favour the AIMU more, especially in respect of the wider seaworthiness clause, as he rarely has any control on the vessels. A shipper may favour the London clauses in respect to the transit and notification clauses.
It is predicted that cybercrime will cost the world USD6 trillion annually by 2021, up from USD3 trillion in 2015.
As increasing numbers of businesses continue to recognise the cruciality of obtaining cyber insurance: experts predict that by 2030, the annual gross written premium will increase by 200 percent, from around USD2.5 billion to USD7.5 billion.
Cyber insurance protects the assured from internet-based risks. It generally covers the assured for data breaches, phishing, hacking or other information technology risks which may include business interruption, financial cost and/or legal expenses. Select examples of types of claims arising from cyber fraud are:
Ransomware is malicious software that infects a computer and displays messages demanding a fee to be paid in order for your system to work again.
Claims result from a hacker trying to hold a company to ransom to restore the company website online or to not release sensitive information.
Phishing is a fraudulent attempt, usually made through email, to steal personal information, for example, a company purporting to represent clients or make requests to change bank accounts.
Arising from the unauthorised access to or control over computer network security systems for some illicit purpose. Hackers can destroy, steal (information or funds) or even prevent authorised users from accessing the system.
A computer virus is a malicious software program loaded onto a user's computer without the user's knowledge and performs malicious actions. It can self-replicate, inserting itself onto other programs or files, infecting them in the process.
For example, claims can arise from the accidental uploading of viruses or transmission of viruses to a third party.
Intellectual Property Claims
Theft of intellectual property, including copyright, patents and trademarks etc.
Risk management is an important part of insurance and this is no different in the context of cybercrime. Reckless practices or inadequate risk management procedures could prejudice claims and whilst it may be impossible to absolutely prevent cybercrime, there are certain instructions that can limit the risk.
Never accept email instructions to change important details such as bank accounts without proper checks or speaking to your usual contact.
Always check minor discrepancies in domain, emails and/or company names.
Never deal with parties who only operate from a mobile phone and have no landline.
Never disclose important information over email or telephone.
Never open attachments you are not confident of knowing who they are from or what they are about.
Always report any strange behaviour to your client, bank or relevant party so they can investigate.