This case involves a manufacturer of specialized lubricants and surface treatments for close-tolerance manufacturing that hired a logistics firm to transport millions of dollars worth of product from Europe to its final destination in the United States. While en route to its final destination in the United States, the cargo was destroyed due to an accident. Since then, the insurer has refused to pay for the loss, asserting that the policy governing this shipment was changed while it was in transit. The loss of this shipment, and the subsequent failure of the insurance company to pay for the loss, forced the manufacturer out of business.
Question(s) For Expert Witness
- 1. Please briefly describe your work in logistics, and specifically your experience arranging appropriate insurance coverage.
Expert Witness Response E-077552
I was with a major logistics company from 1987 until late 2014, during which time I rose to Vice President of Operations. In that role, I directed operations for the largest of the company’s seven regions, which included approving contracts and setting profitability standards. I was mainly focused on domestic shipping, though I do have some exposure to international logistics as well. I am certainly familiar with the items being shipped here, as one of my biggest contracts was with a manufacturer of similar products. I had many instances requiring additional insurance, and I am highly knowledgeable about that process. I am also knowledgeable of the obligations that fall on a logistics company as a third party to a manufacturer/insurer relationship.
Expert Witness Response E-078108
This sounds like it is exactly within my area of expertise. I am the director of insurance with my international logistics company, in which capacity I’m responsible for signing agreements with our insurer. I am also formerly licensed as a New York State insurance broker, and I have experience procuring marine and overland cargo cover. I would like to know more about the change of insurance coverage while en route, as well as other circumstances including policy limits. My first impression is that this should be a very black and white issue. I’m awfully surprised to hear that coverage was changed without notice to the manufacturer.