Cargo Insurance for frozen food
As an introduction, it important to consider the difference between hard frozen goods and goods carried in chilled or cooled condition.
Hard frozen goods are a far more attractive proposition to an insurer than those in chilled or cold form. Failure or malfunction of the refrigerating machinery may not necessarily be catastrophic for several hours if frozen goods are involved, provided the container or conveyance is kept shut. On the other hand, chilled or cooled goods are more prone to deterioration, and quickly too, if the cooling machinery fails, especially if it does so in a hot climate. An insurer should reflect this greater risk in its premium and terms, which should be more onerous than they would be for solid frozen goods.
Frozen Food clauses describe in this article are excluding Frozen Meat.
When it comes to the transportation of frozen food, some basic clauses of any cargo insurance policy will be different. Clause to the cover of all risk of loss or damage excluding loss or damage resulting from any variation in temperature are geting obsolete.
At the contrary, some cover must be added to your cargo policy in case of particular risk that can causes a change in the temperature of the good in transit:
- Breakdown of refrigeration machinery resulting in its stoppage for not less than 24 hours
- Fire or explosion
- Vessel or craft being stranded, grounded, sunk or capsized
- Overturning or derailment of the land conveyance
- Collision or contact to the vessel, craft or conveyance with any external object other than water
- Discharge of cargo at a port of distress
It is possible to negotiate with an insurer a minimum period shorter than 24 hours. It usually apply for goods sent by road with temperature controlled vehicles, for which the minimum period of stoppage can be reduced to around 8 hours. This exception is due to the fact that if the refrigerating machinery breaks down or suffers a malfunction, the carrier can easily take the goods to a cold store within that timeframe
The freezing works and/or cold stores are identified as the places for the commencement and termination of transit. These wording is particularly important because temperature controlled transportation of the cargo, wether based on land or sea, are designed only to maintain the goods at the temperature at which they are loaded.
The cargo must be in a chilled or frozen state before being loaded on board the chosen method of transit. At the same time, the temperature in the conveyance upon loading must match the temperature of the goods loaded.
Finally, a special note at the end of Frozen Food Clauses states that the insurance does not cover loss or damage due to embargo, rejection, prohibition or detention by the government of any country. However it does not exclude loss or damage to the goods caused by any of the perils covered by the Frozen Food Clauses, provided it occurred before the embargo, rejection, prohibition or detention.
The addition of the Frozen Food Clauses extends the insurance significantly to all risks of loss or damage, including inherent vice, but excluding:
- The risk of bone taint, salmonella and infection prior to the attachement of the insurance
- Fault in preparation, dressing, cooling, freezing, wrapping or packing
- Claims for loss of market