multimodal transport operator insurance
Multimodal Transport Operator Insurance

Multimodal Transport Operator Insurance

The Multimodal Transportation of Goods Act of 1993 establishes legal responsibility for cargo loss or damage. As a result of the foregoing, the MTO (licenced operator) is liable for any loss or damage to the goods entrusted to them for transportation.

MTO Liabilities Insurance is designed to protect transportation operators and freight forwarders from legal liability that may arise as a result of their operations. MTO’s legal liabilities are covered by the policy. All marine liabilities of Freight Forwarders, MTOs, Haulers, In Transit Warehousing, Ship Agents, Clearing and Forwarding Agents, Custom House Agents, and Packing & Consolidating Agents are covered by the MTO Liability Insurance.

Why Choose Multi-Modal Transport (MTO) Insurance Policy?

The International Freight Forwarding market, over the past few years, has changed considerably with the emergence of Multi-modal Transporters (MTO).

In addition, a growing number of transportation providers, such as freight forwarders, shipping agencies, packaging and consolidating agents, clearing and forwarding agents, are now offering a variety of services to trading organisations, many of which operate on a global scale.

Many of these businesses have also changed to MTO status and obtained the necessary licence under the MTO Act. In order to obtain a licence from the Director-General of Shipping, the MTO operator must have its services insured.

Advantages of Multimodal Transport Operators Insurance

Here are the advantages of Multimodal transport operators insurance;

1. Meets Legal Requirements

Multimodal transport operator insurance assists MTO operators and businesses that have converted to MTOs in obtaining a licence by complying with the legal requirements outlined in Section 3 of the Multimodal Transportation of Goods Act of 1993.

2. All-inclusive Protection

A multimodal transport insurance policy protects you against losses caused by cargo damage or delays in delivery. It also covers losses resulting from errors and omissions, fines and duties, and third-party legal liability.

3. Transactions that are safer

Over the last few years, the number of multimodal transport operators has expanded. An MTO insurance policy makes transactions between transportation providers and trading organisations that operate globally safer and faster.

4. Fast Claims Settlements

An MTO insurance policy’s claim settlement process is quick and easy. IRDAI is in charge of regulating turnaround times. Industry specialists handle the claim procedure and documentation to ensure that claims are processed quickly and efficiently.

Benefits of an MTO Policy

Here are the benefits of MTO policy;

1. Limits of Liability (Sum Insured)

Two restrictions must be specified: a) a limit for each individual occurrence, and b) an aggregate limit for the Policy Period.

The policyholder can set the liability limits in INR or USD according to the projected exposure.

2. Errors & Omissions

Legal liability arising from the insured’s operations as a result of the insured’s, his agent’s, or sub-negligent contractor’s act, error, or omission.

3. Third Party Liability

The policy also covers property loss or damage, as well as bodily death, injury, or illness that is legally recoverable as a result of the insured’s operations.

4. Wide Territory & Jurisdiction

According to exposure, both the “Territory” and “Jurisdiction” might be in India or anyplace else in the world.

Inclusions

The policy provides coverage for legal claims deriving from:

  • Physical loss or damage to cargo while it is in the care, custody, or control of the insured or a party who has hired or subcontracted to perform transportation services.

  • Physical loss or damage to a subcontractor’s or customer’s vessel or equipment.

  • As a result of 1 above, there will be a consequential loss and/or business interruption.

  • The contribution of unrecoverable cargo to the overall average.

  • Fines and taxes are two things that come to mind when it comes to fines and taxes.

  • The Errors and Omissions extension would cover legal liabilities arising from the insured’s operations as a result of the insured, his agent, or subcontractor’s negligent act, error, or omission.

  • The Third-Party Liability extension would cover property loss or damage, bodily injury or disease, and legally recoverable consequential loss originating from the insured’s operations.

Exclusions

Financial guarantee and insolvency are common exclusions in multimodal transporters liability insurance policies.

  • Infractions of the law

  • Acts of dishonesty and deception

  • Unprecedented losses or shortages

  • Fines

  • Penalties

  • Punitive and exemplary damages are available.

  • Claims stemming from any earlier known issues are also not covered by the policy.

Claim Process

The policyholder should notify the insurer’s team and supply any relevant claim information. After that, you must provide all relevant documents, as well as a legally signed claim form. The claim will be settled after it has been examined and authorised.

Documents Required

  • A copy of the bill of lading, a survey report, an original invoice, and a packing list, as well as shipping specifications or weight notes, would be necessary.

  • Copies of any correspondence with transporters or bailees, as well as the claim bill, should be submitted.

  • If the insurer has any other criteria, such documents should be submitted as soon as possible to expedite the claim process.

To guarantee that claims are paid, you should provide all of the information requested by the insurer. To avoid, minimise, or reduce a Claim, one should take all reasonable efforts. Also, no criminal conduct, as well as dishonest and fraudulent acts, should be engaged in. Delivering hazardous cargo should be avoided at all costs.

Frequently Asked Questions

Here are frequently asked questions about MTO policy that you should know;

1. Is the MTO policy applicable to all modes of transportation?

A multimodal transport operators insurance policy covers all means of transportation involved in a single contract, whether they be air, sea, road, or rail. If you are operating as an agent for third-party NVOC principles, your MTO coverage will cover you.

2. In the event of two or more claims arising from the same incident or from continuous or repeated exposure to identical conditions, how much of my claim will be paid?

When two or more claims are attributed to the same incident or result from continuous or repeated exposure to the same or similar conditions, the limit of indemnity and deductible applicable under a multimodal transport operator policy will be applied to one claim, and the claim will be paid as such.

3. How is the cost of a multimodal transport operators liability insurance policy determined?

The cost of multimodal transporter liability insurance is determined by a number of criteria, including the indemnity limit, gross revenue, and the number of TEUs (Twenty Foot-Equivalent Units) supplied. Because each aspect has the potential to affect overall policy premium prices, our specialists thoroughly examine all of them, as well as the client’s requirements.

4. How can I begin my multimodal transport operator liability insurance coverage?

To begin coverage under a multimodal transport operator liability insurance policy, the following documents must be submitted on time: –

  • Premium Cheque

  • Form of Proposal

  • Letter of Mandatory

  • Any further documentation required by the insurer.

5. What are the Multimodal Transport Operators Liability Act's requirements?

No person shall carry on or initiate business in multimodal transportation unless he is registered under the Multimodal Transportation of Goods Act (MMTG), 1993, according to Section (3) of the Multimodal Transportation of Goods Act (MMTG), 1993. “Multimodal Transport Contract” is defined as “a contract under which a Multimodal Transport Operator agrees to perform or procure Multimodal Transportation in exchange for freight payment.”