The fishing industry represents a dangerous environment – both from a physical peril point of view as well as a commercial operation point of view. Life out at sea carries with it inherent risks – it’s no wonder therefore that commercial fishing is regarded as one of the most dangerous industries in which to work.
Commercial fishing is also a volatile business with profit margins often at the mercy of a sometimes very unpredictable resource (namely the fish itself!) Despite significant advances in fishing technology, Marsh Africa still often encounters personalities who have been involved in the industry for decades who can’t explain why the resource is ‘acting’ in the way it is between one year and the next. To that degree fishing remains to a large degree a dynamic unpredictable industry – and that’s just the “procurement side of the business.” On the sales side there are local and international factors to consider – a change in the rate of exchange could turn a poor season into a good one (despite the fact that the product base hasn’t altered.) Supply and demand can often dictate success or failure.
Of the risks touched on above, some are insurable whilst others – generally speaking – are not. The risks that you will generally not be able to insure against would be rate of exchange fluctuations, loss of fishing time, poor catch rates – leading to other consequential losses.
On the Insurable side, a typical fishing company will possess assets that require insurance – vessels, a factory, a workshop possibly, a cold store, motor vehicles, machinery, product, loss of profits / business interruption following a loss, etc. They will also have employees that they would need to consider cover for (besides COID) – group personal accident, employee benefits, etc. The company will be exposed to potential liabilities that they should insure against – for the vessels (P&I,) for motor, for general liabilities at their premises, for product sold and distributed internationally, etc. On the sales side - trade credit insurance may be a requirement (both domestically and internationally.)
Then there would be certain more ‘exotic’ risks to consider from an insurance perspective – product recall, brand protection, fidelity guarantee (i.e. insuring against the infidelity of your own staff,) kidnap and ransom (if you have employees travelling to high risk parts of the world on company business,) environmental risks, mergers and acquisitions, etc.
The basic cover required and the need to consider some of the more ‘exotic’ Insurance products will very much depend on the size and complexity of the company – as well as their exposure to risk and how they go about eliminating or restricting it. How strong are their internal risk management processes and procedures? Is risk management an ingrained function of the company or is it more of a catch-phrase with little real substance?
All of the above highlights the need for the fishing company outlined above to consult with a professional insurance broker and risk advisor in order to review (in conjunction with senior managers within the fishing company) the fishing company’s risk exposures and how best these can be addressed. In order to derive the best benefit from your broking house your broker needs to fully understand your business, they need to know what your needs are and they then need to bring the full weight of their in-depth knowledge of Insurance to bear on your business.
There may well be a number of insurance products that you don’t feel you need – and you may be quite correct in this assessment. The important thing is to identify whether there is a risk in the first place (no matter how small it is) and to then decide how to deal with it. If there’s an opportunity available whereby the risk could be transferred to an insurer then that should be one of the options considered. If such an option exists and it is then decided not to take up the insurance option for whatever reason (e.g. price, not enough value for money, not wide enough cover, etc.) then at least the risk has been considered and an informed decision made not to insure it. A professional insurance broker and risk advisor can provide you with valuable assistance in working through this process.
More and more (certainly at a corporate level) company boards of directors are obliged to have risk committees in place to identify and evaluate the potential risks faced by the business (and not necessarily just insurable risks, but all risks) and to mitigate these to the best of their ability. This talks to the establishment of risk management programmes coupled with risk transfer (insurance.) Once again, a professional insurance broker and risk advisor can assist you with this process and should be able to add value.
The above mentions a corporate environment – but even the smaller SMME operators – require professional advice in relation to insurance and risk management. Many of the fundamental risks faced by the smaller operator are the same or at the very least similar to those faced by the corporates. There are still vessels that need to be insured and liability exposures that require cover. Product still needs to be insured (possibly even as early as the “catch” stage just after it’s taken on board.) Fishermen are still subject to danger and the peril of being injured on board or lost overboard – their dependents will (in all likelihood) seek some form of compensation for the vessel owners.
Probably the most import aspect of any insurance you purchase is that it responds (the way you expect) when you suffer a loss. There should be no surprises in relation to your insurance coverage when a loss occurs. To ensure that this is the case it is vital that your broker has explained the full scope of cover to you (including policy extensions and exclusions; excesses and conditions.)
So whether you’re a big corporate fishing company or a small one-vessel operator there is a need to seek sound advice from a reputable and well-established professional insurance broker and risk advisor.
Marsh Africa (following the acquisition in 2012 of the Alexander Forbes – Short-term Insurance Broking business) is a pre-eminent, African insurance broker and risk advisor. Marsh is proud to be intimately involved in the South African and Namibian fishing industries, servicing numerous clients from major corporates through to SMME operations and singleton owners. In addition Marsh prides itself on having a dedicated marine team in Cape Town that has significant experience in arranging insurance placements for hull, Protection & Indemnity (P&I,) cargo (incl. catch,) inland transit, ship repairers liability and other classes of marine insurance. Complimenting the marine team are non-marine colleagues handling the assets, liability, motor, product recall and other risks requiring cover.
Besides its African footprint, Marsh (part of the Marsh & McLennan Group of Companies) is a truly global company with operations based in 130 countries around the world. This gives it access to an extensive range of expertise within just about any industry sector – fishing being one of them. The company leverages these connections to ensure that it remains in touch with developments taking place internationally that may have an impact on its local client base – or these clients’ global operations. It also helps Marsh keep up to date with trends within the insurance market globally.
In addition to conventional insurance broking expertise, Marsh also has a dedicated division focused solely on risk management – Marsh Risk Consulting (MRC.) MRC’s role is to provide clients in all industries with strategic advice and innovative solutions across a comprehensive range of insurable and non-insurable risks.