Many Ghanaian traders cannot withstand the economic impact of loss or damage of imported cargo, yet only a handful know much about what constitutes a good marine cargo insurance policy to protect their precious goods.
As a result, importers in Ghana have been advised to opt for local insurance for their cargoes, as it presents better offerings.
Members of Ghana’s cargo insurance committee, during the latest edition of the Eye on Port show, indicated that insuring cargo with local companies is safer as it guarantees a more reliable claim process among several other benefits.
According to Emmanuel Fiifi Blankson, there are close to twenty different well-resourced local insurance companies that can offer covers for all forms of cargo imported into the country – leading the National Insurance Commission (NIC) to embark on a vibrant programme to encourage patronage of local marine cargo insurance.
The insurer tabled that surrendering insurance to foreign entities is bedevilled with many challenges, including language discrepancies.
“In international trade, transactions are done in different languages. Certain clauses and transactions are inserted into the policy which you might not understand; and when the reason you’re buying the insurance crystalises, you find out that you might have bought insurance but you do not have cover,” he explained.
He said it is the NIC’s objective to sanitise and streamline cargo insurance processes so that Ghanaian importers get value for many services as far as cargo insurance is concerned.
Mr. Blankson said not only do the trading public get stress-free value for money services, but the domestic insurance industry also stands to benefit tremendously – leading to a win-win situation for Ghana’s economy.
Adding to that, seasoned academic and chartered shipbroker Gertrude Adwoa Ohene Asienim said it is wiser to take charge of purchasing insurance compared to relinquishing the duty to suppliers like many Ghanaian importers do.
“Anytime you are buying goods using any of the INCOTERMS and the seller is doing any of the obligations for you, it means the seller is adding their margins – and that is what people do not realise. Margins are added onto the transport and also the insurance. That means you pay more for something that could have been done locally by yourself, at no extra margin to your business.
“Again, in that case you buy insurance using foreign exchange – which means you are making losses. We usually complain that the cedi is always fluctuating, and these are some of the reasons,” she educated.
The maritime expert – who is Executive Director of the West African School of Shipping and Whitestone Shipbrokers Ghana Ltd. – listed a number of international regulations including The Hague Visby Rules, the Hamburg Convention, the Warsaw Convention among others which provide some protection for cargo carriers such as merchant ships and grants exemptions for certain incidents at sea. Thus, it is important for importers to be conversant with these; or at least insure their cargoes appropriately with these in perspective.
“For example, if you bought bottles of water worth 10 cedis each, it is likely the carrier will pay you something around 2 cedis if something happens at sea; leaving the rest of the 8 cedis for you to manage the risk. So when insurance comes in, they pay you for the sum insured or for the damage or loss you incurred and place you where you were before your loss,” she cited.
She clarified that there are various types of insurance cover, hence it is better for traders to insure locally so they can opt for the appropriate policies that provide the kind of cover they want.
Gertrude Adwoa Ohene Asienim however encouraged sales persons of local insurance companies to abreast themselves with the technicalities of marine insurance, in order to demystify service offerings to clients.
