Is it an act of God ? Or not?
The argument is likely to pop up between truck owners and their clients if cargo is stolen from the hundreds of trucks abandoned by drivers on the highways amid the lockdown.
Any theft would be the responsibility of the truckers as the cargo is in their possession, say clients, who are likely to seek compensation. But transporters insist any such theft would be an act of God, and the onus is not on themselves.
“It is certainly an act of God,” said P Sundarraj, Managing Director of Tiruchirapalli-based Subham Freight Carriers India Pvt Ltd. “Vehicles were abandoned due to the coronovirus, which led to the lockdown, and in turn created panic among drivers, leading them to abandon the vehicles. We cannot be held responsible if the cargo is stolen from the vehicles.” Nearly 50 of his company’s vehicles were abandoned by their drivers in Maharashtra.
Bal Malkit Singh of Mumbai-based Bal Roadlines concurred. Drivers are abandoning the vehicles to look for accommodations with basic amenities or to head home. “It is an extraordinary situation like war. Everything is shut. There is no question of any claims for damages. The situation is beyond our hands. It is an act of God and a natural calamity,” said Singh.
What is covered
Further, carriers’ liability policies cover only accidental damages or negligence. Thefts from trucks abandoned due to a lockdown fall under neither category, said an analyst covering the insurance sector.
Insurance company officials are in a fix. The marine policy covers goods from the time it leaves the warehouse till they it is delivered at the destination, during the ordinary course of transit. The owner of the goods takes the insurance policy and enters into a contract of ‘affreightment’ with the transporter.
The transporter’s responsibility is that of a bailee while he holds the goods and that of a carrier when it is transported, said an official of a large private insurance company.
Right of recovery
When the transporter takes due care and prudence in the carriage of goods, it may become difficult to hold him responsible for the abandonment of the vehicle by the driver due to this extraneous situation, the official noted.
However, if the insurers admit the claim of the owner of the goods, then they may obtain the ‘subrogation’ rights and proceed against the transporter. Right of recovery may be a contentious issue and each case will be decided on merits, the official added.
Insurance companies will try to wriggle out citing some archaic interpretation and clients will argue that this calamity was not in their hands to control. “While coronavirus can be treated as an act of God peril, my guess is courts might go in favour of the clients,” the official further said.