I Didn't See That Coming
By: Maya Mackey, Bond Manager - Roanoke Trade
The list of unintentional mistakes and inadvertent errors that a customs broker is subject to is quite extensive. Failure to follow instructions, incorrect classification of goods, improper quotation of charges, unauthorized release of goods, incorrect document preparation, failure to properly clear goods upon entry, failure to collect documents and failure to timely or properly file an ISF are only a few errors that may ensue while transacting business on the client’s behalf. Unfortunately, clients may suffer a catastrophic financial loss should such an error occur, and if so, they will more than likely initiate a claim against you.
Given the potential settlement amount and legal fees, customs brokers must not overlook the likely hit to their bottom line to cover costs for these types of claims. Consequently, errors and omissions insurance is an extremely viable solution for customs brokers and freight forwarders that seek a way to manage the financial impact when a claim is pursued. For most, it’s not a matter of if such an event will occur – it’s a matter of when.
The daily operations of a transportation intermediary involves a constant change of rules and regulations as well as extensive documentation and extreme attention to detail. Additionally, with the “needed it yesterday” business climate in present day may contribute to unintended yet careless mistakes. The opportunity for a clerical error or oversight having a financially damaging effect on your customer’s business operations is a reality. The fact is, that it really doesn’t matter if you actually made a mistake or not, the customer is looking for someone to remedy their financial loss and they’re going to do whatever they can to recover their losses. If it’s a customs related loss, the likely target of their efforts will be the customs broker.
Choosing the right coverage is essential to your business and all policies are unique. Key factors to consider should include the financial strength of the insurer, continuity of coverage from year-to-year and claims handling services for the program you choose. Also, make certain that your coverage addresses the risks for your specific operations, finances and the amount of liability you’re comfortable taking on without insurance. Errors & omissions insurance can replace worry with certainty that your business can survive these claim situations.