Insurer Covers Costs When Port Agent Fails to Get a Pilot for a Ship

The International Transport Intermediaries Club (ITIC) is highlighting how it stepped in to aid one of its customers when a simple oversight racked up large fees. The provider of professional indemnity insurance settled a claim that it acknowledges was a lack of communication that led to a simple oversight.

The ship’s owner filed a claim for $135,000 in expenses and late fees it incurred when one of its ships was operating outside its normal liner schedule. It had scheduled special port calls and notified the liner agent of the inbound schedule, requesting that arrangements be made for the calls outside the regular service pattern.

Using the initial arrival plan, an agent scheduled the pilot for the ship and initiated the customs clearance for the ports. The agent, however, was heading out of the office on leave and handled the assignment over to a covering team.

When the ship was delayed in its first port of call, the company notified the agency of a three-day delay for the first of the two scheduled discharge ports. The agency’s team adjusted the arrangements at the first port but omitted to make changes for the second port.

The problem only became apparent when the ship reached the second port, and there was no pilot available. The company reports it incurred the $135,000 expense due to the urgent need to finalize a pilot and late fees that were incurred. It requested reimbursement from the insurance company, placing the blame for the expenses on the agent’s mistakes.

ITIC reports that the agency cooperated and provided the documentation and acknowledged their omission in adjusting the schedule at the second port. “As there was no defense,” ITIC said it “honored the claim and reimbursed the full amount.”

“A mistake like this highlights the need for clear internal communication and robust handover procedures,” said Mark Brattman, Claims Director at ITIC. “Our goal is to help members learn from such incidents and strengthen their operational procedures.”

Despite the modernization of so much of the operations and the push toward electronics and digitalization, it highlights that much of the shipping industry remains concentrated on fulfilling basic daily tasks. A simple oversight resulted in the delay and expense for the vessel and ultimately the insurance provider.