Quest News™

June 18, 2015

Understanding Your Policy – Extra Expense Clause

A Professional Liability policy or any insurance policy for that matter is loaded with information.  Understanding the ins and outs of your policy can be a daunting task.  Looking past all the bullet points and headers lay a very powerful clause that gives you a crucial benefit –Extra Expense Coverage.

The Extra Expense clause can be found in all of Avalon’s Errors and Omissions (E&O) coverage included in the base of Avalon’s Combined Transit Liability Policy (CTL).  Extra Expense coverage is a protection from the direct costs associated with the failure of a consignee or receiver of cargo to collect or remove the cargo at its designated delivery place. 

If your consignee abandons the goods or fails to pick them up, there are direct costs to you including transportation, storage and demurrage.  You may receive proceeds from the sale of the abandoned cargo or you may be able to recoup some expense from the consignee.  Extra Expense coverage protects you if you can’t, or the cost exceeds the funds you are able to procure from those sources.

The clause is generally triggered when the insured is shown as the shipper on the master bill of lading or the freight forwarder who booked the freight with the steamship line.

You shouldn’t have to take on the burden of the costs associated with abandoned cargo.

While it is a tiny clause within the E&O policy, it packs a punch when needed.  There has been a recent uptick in claims involving extra expense and having this coverage built-in protects you from the unexpected. 

Avalon’s base CTL program includes Errors & Omissions and Cargo legal liability.  The policy can then be tailored to your needs through various coverage options including Motor Truck Cargo Legal Liability, Warehouse Legal Liability, Contingent Cargo Coverage, Contingent Auto, Regulatory Defense and other endorsements covering transportation liabilities and legal costs specific to your business.

For additional information on Avalon’s Combined Transit Liability, contact or contact your local Avalon representative. You can find a listing of our offices here.

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