Reading between the lines of a claims report and forming a conclusion

Following my article in the September edition of Insurance Panorama, here is what you should have spotted

The fact that the first carrier apparently had difficulty in telling the difference between a seaport and the industrial estate of an inland town is the first matter of concern

The second is his delivering 30 miles from the correct delivery place
His preferring not to offer an explanation is a serious matter, putting him in a very bad light At the very least, he should not be used again

The failure of the loader in not reporting the receipt of the goods to his manager drives another nail into the coffin and the fact that the goods other staff made no enquiry about the goods, despite their daily routine involving the checking of all goods inwards suggest that either the staff were part of a conspiracy of silence or that the goods were never received by this freight forwarder

We next look at the coincidence of the ‘opportunist thief’ – to quote police parlance – having just by chance an angle grinder on his arm as he walked past the one warehouse out of 26 on the site that contained the valuable goods (for the purposes of this exercise, widgets are highly theft attractive), choosing to cut into that warehouse, is the stuff of fiction

As to the police having decided that it was unlikely that the identity of the persons responsible would be discovered, it is disappointing that neither the mis-delivery driver, nor the loaded who allegedly took the goods in, were arrested and interviewed under caution, even though they may have been innocent. As the last two people who admitted to seeing the goods, they should have been interrogated at length, if only to disprove any involvement in the theft

Now to the arithmetics! If you accept that the average sales success in business is around 20% of all sales pitches over a given period – and that the disposal of stolen goods follows a similar pattern – the suggestion that the widgets would be disposed of in local pubs and clubs can be described as extremely optimistic and highly unlikely. If one has 8,500 stolen widgets to sell, one has to pitch to 42,500 people in order to sell all of them with a 20% sales ratio. And this assumes that in all those 42,500 people there are no off-duty police officers or upstanding members of the public who will report the thief who is trying to sell the stolen goods

This is one of those claims that are very dubious indeed and there is not even any evidence that the goods every entered the warehouse. The freight forwarding firm has a lot of work to do if it is to persuade its insurers that the claim is genuine. Even if they do that there is still the problem of their legal position. They made no contract with any party to store or forward the goods. They are bailees at common law, thereby liable in negligence for the full value of the widgets

Definitely a claim that smells; and the smell is not one of sweet perfume!

John Potter, ACII
Chartered Insurance Practitioner
Trainer in Cargo, Goods in Transit, Hull and Energy insurances