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1 Goods in transit Module 6 Copyright © Santam Ltd. 2007 Course code: ASSESS123 / Module 6
1
Goods in transit Module 6
Copyright © Santam Ltd. 2007 Course code: ASSESS123 / Module 6
Copyright © Santam Ltd. 2007 2 Course code: ASSESS123 /Module6
Module introduction We reckon it is also suitable to put the emphasis during this project on Section Goods in Transit. Most businesses transport goods to some extend, whether it is to deliver or to pick it up. The following aspects will be addressed in this module: • Type of cover; • When does transit commence and end; • Protection; and • Premium calculation. We are not going to emphasise on specific cover, exclusions and conditions as per policywording, but rather on the underwriting of goods in transit as a consequence of the last-mentioned. The module does not entail general questions, reviews, quotations and questions regarding amendments, like the other modules. It is only expected of you to study the visual material on the three respective risks, to answer questions on it and to complete an application form for the last risk. Please motivate your answer throughout. Module objective The objective of this module is to evaluate your knowledge of goods in transit, with specific emphasis on the type of cover, protection and premium calculation.
Copyright © Santam Ltd. 2007 3 Course code: ASSESS123 /Module6
Case studies Part 1 Transportation of maize-meal Firstly, study the visual material, Risk 1. Comment following on the visual material ______________________________________________________________________________
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Copyright © Santam Ltd. 2007 4 Course code: ASSESS123 /Module6
Motivate your answers with the relevant facts throughout to qualify for the maximum allocation of marks as indicated per question. Questions Our insured, ABC Foods, delivers a consignment of maize-meal to a wholesaler. They enjoy cover under Section Goods in Transit in terms of the Multimark III wording. 1. Which type of cover will you grant the insured? He wants the best possible cover
available. Base your decision on the type of vehicle and protection. ______________________________________________________________________________
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2. When does this specific consignment end?
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3. To your opinion what would be the greatest danger the insured faces when transporting
this specific type of commodity?
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Copyright © Santam Ltd. 2007 5 Course code: ASSESS123 /Module6
4. ABC Foods transports at any given moment an average of 8 tons of maize-meal. Can you imagine the consequences should the vehicle, as observed in the visual material, be involved in a collision or overturn? The company transporting the load is usually held responsible by the authorities to remove the debris. How can ABC Foods ensure that they are sufficiently covered for such an event?
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5. ABC Foods delivers their products themselves. On which basis will you determine the premium?
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10
Copyright © Santam Ltd. 2007 6 Course code: ASSESS123 /Module6
Part 2 Transportation of ready-made braai equipment and indoor fireplaces Firstly, study the visual material, Risk 2. Comment following on the visual material ______________________________________________________________________________
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Copyright © Santam Ltd. 2007 7 Course code: ASSESS123 /Module6
Questions 1. Does this type of commodity pose a great danger while transporting it?
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2. Would the damage to products be covered in terms of Section Goods in Transit should the ropes break during the trip and should the products fall off?
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3. The insured owns only the one truck as observed in the visual material. Suppose the truck breaks down while he is busy delivering his products. He is now compelled to use his personal one ton utility vehicle (LDV) to be able to deliver the rest of the products to the dealers on time. Will he still enjoy cover for the mentioned goods in terms of Section Good in Transit?
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4. On which basis would the premium be calculated if these deliveries were done by a
transport contractor? (Consider the transport contractor as our insured and not Metalworks.)
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TOTAL
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5
Copyright © Santam Ltd. 2007 8 Course code: ASSESS123 /Module6
Part 3 Transportation of timber and ready-made timber products Firstly, study the visual material, Risk 3. Comment following on the visual material ______________________________________________________________________________
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Copyright © Santam Ltd. 2007 9 Course code: ASSESS123 /Module6
Questions LWC Woodworks manufactures timber cupboards and other similar products. They usually go to pick up the raw timber from the suppliers to save on transport costs and they deliver the smaller type of ready-made cupboard themselves. They use a transport contractor only for the cupboards and pieces of timber which are too big for the trailer (refer visual material). The transport contractor manages his own insurance. 1. Which type of cover will you grant the insured? He wants the best possible cover
available. Base your decision on the type of vehicle and protection.
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2. As observed in the visual material, the insured himself loaded timber supply on the
pavement in front of the entrance of the workshop. Suppose the timber (while it is temporarily stacked there and before it could be taken into the factory) is damaged. Will it be covered in terms of Section Goods in Transit? The insured had to make room in his workshop for the timber and wasn’t able to take it in immediately.
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3. Suppose the timber on the trailer fell off whilst in transit and caused damage to other
property (e.g. a vehicle). Will this event be covered in terms of Section Goods in Transit?
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Copyright © Santam Ltd. 2007 10 Course code: ASSESS123 /Module6
4. If it was indicated on the application form that the commodity is timber and the
insured transports some of his woodwork machinery on the trailer, will it be covered in terms of Section Goods in Transit?
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Copyright © Santam Ltd. 2007 11 Course code: ASSESS123 /Module6
5. Complete the application form by using the following information: Current policy: Number remains unchanged Commodity: Timber and timber cupboards Vehicle: LDV with trailer Transport fees: R1 000 000 (annual load) Load limit: R15 000 Number of vehicles: 1 Excess: Basic > 10% of claim min R500 Hijacking > 10% of claim Premium: R1 700 Riot and strike: N.A. Removal of debris: N.A. Fire extinguishing charges: N.A. Declaration condition: Annually Defined events: Fire, collision, overturning of vehicle, subsequent theft and
hijacking
Copyright © Santam Ltd. 2007 12 Course code: ASSESS123 /Module6
N.A.
