Top tips from our expert: removal of debris for storage and cargo risks
Steve Gordon, our Product Head - Marine Commercial Lines, says it's worth checking the fine print for this - and explains how Geo can help you and your clients.
Removal of debris for storage and cargo is something that can be overlooked in cargo and stock throughput policies, and is worth reading the fine print of. It does what it says on the tin, covers the additional cost of clean up after an incident (ask us for a wording if you want to see the real thing).
The removal of debris clause usually has a sublimit which is either a percentage or a monetary amount – and it needs to be set correctly because the standard limits aren’t fit for everyone.
A standard limit might be 10% of the overall policy limit, so if the overall limit is £1m then you have say £100k for removal of debris. Lower policy limits might mean very low removal of debris limits, so beware.
Lower policy limits might mean very low removal of debris limits, so beware.
In particular, in stock throughput policies these standard sublimits can be way too low.
If you imagine a warehouse full of goods when a roof falls in, would £10K be enough to cover the clear-up costs? That depends on the size of the warehouse; the amount of goods and other circumstances.
If a client had to hire 100 skips, and 10 humans to clear the warehouse, plus pay for transport and disposal, what would that cost?
There have been instances where sublimits have been given specifically for storage risks and have been set very low, at say £5K. That wouldn’t go anywhere near to providing the cover required or intended under the wording if a reasonably sized warehouse had a similar loss to the example above.
It is meant to be an additional benefit following a core physical loss/damage claim, but getting it right can be the difference for your client’s balance sheet.
Try to calculate the limit with your client as best you can, and ask your insurers to consider giving you a higher limit for the removal of debris cover because of this.