You might think that once an insurer pays a claim, the file is closed and the insurer moves on. But if there’s another party involved, there may well be an action to get the other party to pay – that is, to recover the loss’s costs.
It sounds simple, and in principle, it is: the responsible party, or their insurer, pays for the damage or harm caused.
In reality, it isn’t always that simple.
How recoveries work
If you’ve had an incident, your first step should be to call your insurer. Time is of the essence, as you want the insurer’s team to spring into action as soon as possible.
“We’re appointed on day one,” says NTI Marine Recoveries Consultant Tye Joyce. “We reach out to our claims surveyor to ensure that while they’re exploring the claims side of things, they’re also keeping the recoveries side in mind.”
“If they’re on a ship, for example, we’ll make sure they’re getting the data logs, manifests and other information we need,” Tye says. “Because once the ship’s sailed, a lot of the time we can’t get that documentation.”
Time can be an important factor in recoveries. Notifying insurers as early as possible of a claim means any associated recovery can begin right away. That generally means you’ll see results faster, which in turn means less disruption to your business.
But it’s even more important than that, as Tye explains: “We can protect any ‘time bars’ as well. Time bar clauses specify how long an insured party has to initiate action against a carrier. If a cargo comes by sea or by air, a lot of the time there’s a seven or 14-day time bar to notify the carrier there’s been damage.”
“When we’re on the file we can look for that notice to the carrier. If it’s not there, we reach out to key stakeholders to make sure, because otherwise it might be too late [to start a recovery action] - you can’t get in touch three months after an incident to make a claim.”
Our dedicated recovery team
A good recovery team helps the insurer make stronger claims and secure larger payouts from responsible third parties. That’s good for the insurer. But it’s also good for policyholders.
“It can help a customer maintain lower premiums,” Tye says. “If our underwriters can be confident that we can make good recoveries, our loss ratio comes down. That makes for a better risk profile, which reduces the need to increase premiums.”
NTI is unique in that we have a dedicated Marine Recoveries team – Tye and his colleague Russell Knight.
“We build relationships with customers, brokers and other parties. We can concentrate on recovery from the start and take it all the way through, rather than a claims person having to handle the recovery process as well as the claim or using external recovery agents, as some insurers do.
“We also focus on staying up-to-date on the legislation, which is always changing. We attend court cases and mediations to make sure our customers get the best results possible.”
Case study: APL England
The Singapore-flagged APL England encountered heavy seas and lost propulsion off the NSW coast in May 2020. Some 50 containers were lost overboard, and the ship was towed to the Port of Brisbane. Investigators found evidence of corroded container securing points on the deck and inadequate lashing for cargo.
NTI’s recovery team lead a multi-insurer recovery investigation, as Tye explains:
“We were able to get our surveyor on the boat. The carrier tried to claim it was rough seas, but it wasn’t evident from weather reports or the ship’s logs.
“Our surveyor was able to determine the decking was in poor condition and badly rusted. He could have put his foot through some areas of the ship’s decking. It was evident that the ship had been poorly maintained.
“So, this put us in a good position. He gathered the documents we needed, the evidence we needed, to make a really strong case.
“We were able to submit legal documents to have the ship arrested. We were able to say to the owners, ‘we’re not letting it go until you can guarantee a million as collateral.’ That protected everyone’s interests.
“Given the size of NTI’s claim and recovery team, we were able to co-ordinate activities on behalf of several other insurers. This meant we could obtain information quicker with only one Surveyor in attendance, and co-ordinate recovery action .
“There were lots of mediations, lots of times we had to be available. It was the best part of two years with the shipping line insisting they weren’t at fault and weren’t willing to pay anything.
“There were nine claims in total, and our ability to have them all allocated to our team meant we could deal with them as one large matter – it was definitely more effective.
“We negotiated a good recovery for our policyholders, much better than what some of the European agents were getting.”
Through early notification of a claim, our actions can save Insureds premium dollars well into the future. That’s the difference a dedicated team makes. They work hard to deliver the best possible outcomes for our customers and their results, we believe, speak for themselves.