Insuring transportation of abnormal loads

Certain vehicles and loads cannot be moved on public roads without exceeding the limitations in terms of the dimensions or mass as prescribed in the Regulations of the National Road Traffic Act, says risk and insurance consultant Indwe Risk Services automotive and trans- portation risk specialist Steve Cornelius.

“Where such a vehicle or load cannot be dismantled without disproportionate effort, expense or risk of damage and transferred into units that can travel or be transported legally, it is classified as an abnormal vehicle or load,” he notes.

When the movement of an abnormal load is considered to be in the economic and/or social interest of the country, a special permit may be issued to allow it to operate on a public road for a limited period. Permits are normally issued by the Department of Roads and Transport and, if necessary, input is obtained from local and metropolitan authorities.

The permits require a combination of abnormal warning signage, amber flashing lights, marker lamps, reflectors and escort vehicles.

When insuring an abnormal load, transporters must take into account a number of potential liabilities which can be attached to the transport of an abnormal load, as losses can occur otherwise. This may involve damage to the goods being transported, damage to the vehicle transporting the goods, damage to third-party property, injury or death of third parties, environmental damage, professional liability of independent, professional engineers involved in route clearance and conveyance specifications and routing.

“The structuring of the correct insurance cover will depend on the contractual and statutory arrangements that apply between the transporter, consignor and consignee,” says Cornelius.

Potential risk exposures cover a range of insurance categories, including motor, marine, liabilities and professional indemnity. “These are mostly specialised insurance products and will need to be placed with specific insurers that have the capacity and expertise to provide the correct solutions,” adds Cornelius.
Risk can be mitigated by ensuring that the correct vehicles are used, that these vehicles are correctly maintained and that the drivers have the required special driving licences.

Hazardous and dangerous goods are listed in standard specifications by SABS 0228 and governed under the South African Dangerous Goods Act. This Act will address challenges such as professional driving permits, transport emergency cards and dangerous goods declarations.

“The major challenges related to the transportation of hazardous goods are the risk of spillage, resulting in contamination, loss or damage to the conveyance carrying the goods; loss of the goods being conveyed; damage to third-party property; and death, or injury, to third parties.

Indwe Risk Services specialises in insurance products that are designed to cover rehabilitation and recovery costs. Particular changes to existing motor vehicle products are required to deal with the transportation of hazardous goods,” explains Cornelius.

In recent years, the average cost of spillage, recovery and rehabilitation as a result of abnormal load incidents has been over R400 000 per incident. Local authorities around South Africa are becoming stricter in their enforcement of spillage and clean-up costs, and in holding the transporter and owner account- able for consequential damage resulting from spillage. Civil liability can also be a catastrophic risk and needs to be insured.

“It is clear that if transporters are involved with either abnormal loads or hazardous goods transportation, it is essential that they adhere to statutory compliance requirements. It is also important that all potential risks attached to these loads are identified, quantified and insured.
“The role of qualified brokers and specialist insurers cannot be ignored and the Indwe Risk Services team of experts is on hand to advise transporters of the correct insurance to cover their liabilities and risk, whatever their cargo,” Cornelius concludes.