Transit Insurance Notes
Page 5
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CONTINGENCY POLICIES
THOSE hauliers employing I sub-contractors commonly charge them with " insurance as a small percentage deduction from their freight accountsSome sub-contractors object to this procedure on' the ground that they already hold an adequate insurance of their own. In such cases the insurance charge is often waived. But just because a sub-contractor produces a valid policy at the time of inspection it is no guarantee that the policy will be kept in force. The policy may lapse or not be renewed at the proper time, or after a claim has arisen it may transpire that some vital policy condition has been broken, with the result that the insurance company concerned rightly refuses to pay.
A small claim could be settled between the parties, but the chief difficulty would arise where there is a heavy loss following, say. a burn-out in respect of which no insurance is found to be in force. The sub-contractor could be held liable, but even then his resources might well be insuffi
cient to meet the loss. The unfortunate result of this would be that the haulier concerned would be left to settle with his customer and recoup himself as best as he could.
Another difficulty which occasionally arises is where the sub. contractor recovers from his insurance company, but refuses to hand over the insurance money.
All these little-known but very awkward contingencies can be insured against at coin. paratively slight cost. It is suggested that every concern which employs sub-contractors should seek this protection as a " second string" to its main goods-in.transit insurance.