E&O INSURANCE 101
AND NEW EXPOSURES
Presented By: Jason Wieselman
09/18/2013
WHAT IS E&O/CARGO LEGAL
An unforeseen Act, Error, or Omission made by the insured
that directly contributes to financial loss suffered by a 3rd
party.
An amount the insured is held Legally Liability for under their
own bills of lading, while acting as an NVOCC,
Warehouseman, Domestic Property Broker, or Air/Ocean
Freight Forwarder, Delivery Agent. *** (Damaged machinery
40k NVO was Sued, Ocean Carrier exercised Tokyo selection
clause 8k legal still open)
WHO NEEDS E&O INSURANCE
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Doctors (malpractice)
Financial Planners
Attorneys (Professional Liability)
Insurance Agents
Forwarders and Brokers
Every time you issue an invoice, you can be
named in the event of loss or damage.
WHAT IS COVERED (Generally)
COVERED
Wrongful Release ***
Misdirected Cargo ***
Temperature Settings ***
Classification Errors ***
BL Exposure
Failure to Notify ***
NOT COVERED
Willful Acts
Commercial Disputes
Illegal Activity
IMPORTER SECURITY FILING (ISF)
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Cargo Holds (demurrage, delays, loss of market,
perishables)
Penalties (3rd party exposure)
Clarify your role with importers to avoid
confusion. (are you handling the ISF or is the
forwarder?)
ISF Penalties have been issued!
DOMESTIC LOAD BROKERING
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E&O (endorse current policy to include
domestic load brokering)
Contingent Cargo
Contingent Auto
Negligent Hiring of Truckers ***
Risk/Reward if not licensed as a Property
Broker
PAID CLAIMS
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Importer sued CHB for charging 300k in duties over 3 years for
goods that were duty free. 220k recovered from CBP.– 5k
deductible – 6400 legal -75k paid
64k Furniture shipment released without the original BL. 5k ded.
59k paid – 3600 legal
CHB sued for 2Million for failing to validate a POA from a FF
which lead to distribution of counterfeit merchandise. 44k legal
45k settlement
Sushi Grade Tuna shipment set at wrong temperature. 113k
value – deductible 5k – 109k paid.
Can you afford E&O?
TIPS FOR AVOIDING LIABILITY
VALIDATING POA’S (call importer to verify)
 WAREHOUSE RECEIPTS
 DOCUMENT EVERYTHING
 UNDERSTAND THE RISKS OF AD/CVD
 TERMS & CONDITIONS(website, emails, invoice)
 FORCE SHIPPERS TO ACCEPT OR DECLINE
MARINE INSURANCE
 CONTRACTS (show your broker before accepting)
 WAREHOUSE PERSONNEL
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IN CONCLUSION
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Talk to your Broker about your operations
Evaluate the cost/sales ratio to carry coverage
Know what policy is right for you.
Educate your staff about taking on new business
Get procedures in place
Grow your company safely by protecting your bottom
line and your personal interests.
QUESTIONS?
WWW.INTLBONDMARINE.COM