Shipping Agents

The cover is designed to assist in the recovery of brokerages and port disbursements, and indemnifies members against errors, omissions and negligence, including breach of warranty of authority, a subject discussed in detail earlier in this Course. Somewhat similar cover may be obtained on the Lloyds market and from a few insurance companies. In their ‘Non Mandatory Rules for Shipping Agents’ UNCTAD require an appropriate level of liability insurance whilst it is mandatory for Members of the Baltic Exchange and for Company Members of the Institute of Chartered Shipbrokers to have satisfactory “professional indemnity” insurance cover. By far the majority of charterers, operators, shipowners, brokers and agents are honest, although in most cases shrewd and keen to take the maximum advantage of trading opportunities. In fact, the functioning of this most complex of markets depends to a great extent upon mutual trust. Consequently, an unscrupulous trader or shipowner does have the opportunity to exploit the trust of others (albeit briefly). It is therefore imperative that shipowners encountering previously unknown charterers and charterers uncertain about the credentials of a new shipowner, should investigate the others’ background. Can the newcomer provide a bank reference and/or guarantee before completing business? Are others who have conducted business with them before prepared to offer a recommendation? Have they come to the notice of bodies such as BIMCO, The Baltic Exchange, or the International Maritime Bureau (the branch of the International Chamber of Commerce, dealing with unscrupulous activities)? What has ‘market gossip’ to say about them? Shipping can be a lot of fun and an entertaining career. But it can also be commercially dangerous. It is essential to learn from experience, to arm oneself with knowledge, and to develop guile and ability, at the same time gaining a reputation for integrity. If all this can be allied to obtaining a professional qualification, such as that offered by the Institute of Chartered Shipbrokers, so much the better.