This will be part of a series of blogs on ocean cargo and inland marine insurance claims. It is a niche area within the niche of property insurance claims. Because I practice in Florida, New York and Texas, (all of which contain some of the United States’ busiest shipping ports), I have handled several of these claims when disaster strikes to cargo in transit.
Today’s worldwide economy places great importance on shipments of goods all across borders and boundaries. Many different disasters can strike in this context and having this valuable insurance coverage and understanding it is vital.
This area of practice is interesting because it blends many areas of laws together–contract, insurance transportation/shipping. This is a reason policyholders should seek experienced representation to help them navigate the detailed and specific claim process of ocean marine cargo and inland marine cargo claims.
So what is unpaid vendor coverage in this context?
Unpaid vendor coverage covers all export shipments sold on terms that do not obligate the insured to furnish marine insurance and thereby protecting against cargo loss or damage when title has passed but the insured has not yet been paid.
One example where this coverage is vital is where manufacturers/vendors are shipping goods on terms such as "FOB" (Free On Board). For instance if they are shipping goods from Miami to South America, and the contract states "FOB Miami," then it is generally the purchasers risk of loss from Miami on down to the South American port destination.
Unpaid vendor coverage is very important coverage for vendors to obtain particularly where they have not been paid for the goods being shipped.