A guide to Aquaculture Insurance - Handling claims

What happens if my farm is hit by a loss?

Providing your insurance policy wording is from one of the professional aquaculture insurance specialists, it will contain instructions on what to do and how to act if a loss occurs.

The instructions will be contained in the wording under the title of "Loss Reporting Clause" or "Claim Reporting Clause. Follow the instructions in the clause, and you will be ok.

Again, remember the rule -"If in doubt, shout!" Your insurers will be much happier if you tell them of a situation that is worrying you, rather than leave it to mature into something serious. Also remember that they are very professional (at least the experts insurers in the class are) and their specialists may be a very good source of help and guidance on stopping things getting worse. Let your insurers know if something is developing!

Refer to your insurance policy (you should always keep a copy easily available!) at all times. And keep a diary of what happens! Its easy to forget the exact details of events, but if you write down things as they occur, the notes will serve you well when it comes to giving details to your insurers.

What should I do if my policy is not around?

There is a standard answer to this question which is pure common sense - "Act as though you are uninsured!"

If you adopt that course, it is unlikely you will go wrong and it will be hard for your insurers to criticise you. But you have to test everything you do against the question - "Is this what I would do if I was uninsured?"

The best advice is not to get into a situation where your policy is not around! Not having details at hand of who to contact is not acceptable, so make sure you do two things:

1)As a part of your normal practice, brief your staff on who to contact if there's a loss situation, and thoroughly publicise their contact details across the site(s). That particularly applies to secondry sites, if you have more than one of them. Your policy cannot be in two places at once, so keep it readily available at your main site, and make sure full instructions are available to staff at the other sites.

2)Copy your Loss Reporting Clause, and post it in prominent places around the farm. Make sure a copy is always nearby.

The loss reporting clauses in aquaculture policies are extremely important. They give details of how you are to proceed and above all who you are to contact. Insurers recognise that aquaculture losses are sometimes very difficult to handle, and that their policyholders need fast advice, so they give instructions about how to contact their representatives - these almost always include home and off-duty telephone numbers. The concept is to bring as much experience and help to the situation, as quickly as possible. Whatever time of day or night it is, ring your insurers' representatives, put them on notice and follow their instructions. Ninety percent of the time they will go along with what you think is best.

There is one other piece of good advice if you get in a loss situation, or if you think you may be getting into one! Keep a log of everything! Write down events as they happen.

Once the immediate chaos has subsided - aquaculture losses can be very chaotic - sit down quietly and write up the events as they happened. Put in your reasons why you did things, and what actions you took, and list all the circumstances and events that occurred. Talk to your colleagues and note their comments too. Such a record can be a valuable tool for explaining what went on, to your insurers.

Where do loss adjusters come into all this?

Loss adjusters are professional people who quantify and evaluate claims under insurance policies. When you have a loss, your insurers will appoint a loss adjuster to investigate it.

Whose side are the loss adjusters on?

They are independent professionals whose job is to investigate claims and assess them against the terms and conditions of the insurance policies involved. They are professionally independant.

On the other hand, they are paid by underwriters and their reports goes to them, and a report may contain recommendations that claims should not be paid. But if you, the insured, have a broker acting on your behalf, your broker is your representative, and 100% on your side. Your broker should always argue your case for you, and advise and guide you at all times. If you are dealing with a company's agent, that is a different matter.

In extremely complicated losses it may be worth insureds retaining their own loss adjusters. That isn't often needed, but big aquaculture losses can be very complicated, and getting a second opinion to argue your case may be a prudent step.

Can I see their report?

You can if the underwriter agrees to you seeing it. They are usually reluctant to do so, but the loss adjuster will outline all the facts and arguments to you, and will make all the figures and calculations available.

Is there anything else I should do?

You need to make a formal claim at some point, so prepare your own schedule of the stock that has been lost, the average size of the stock and its value. This should be given to the adjuster at an appropriate moment.

What about salvaging stock?

Always remember to act as though you are uninsured!

If you are uninsured you will do everything you can to recover value from any stock that remains. Go ahead and do your best to reduce your loss in any legal way you can.

Why do you raise the question of the legality of salvaging stock?

You must always respect the law of your country!

If a disease in your stock is causing the loss, don't try and salvage it by selling it, either to other farmers for on-growing, or for human consumption, if that contravenes any laws. Whatever you do to try and reduce the loss, act within the law.

Note : The opinions expressed herein are those of the author .
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