To provide their services, insurance companies have licenses for various types of insurance of property, liability, financial risks, life. Liability insurance of customs brokers is one of the necessary conditions for the implementation of their professional work by these representatives.
Subjects of the contract
The insurance agreement is concluded between the core financial institution and the customs representative. To sign a customs broker professional liability insurance contract, a legal entity must be included or submit documents for inclusion in the Register of customs representatives. Otherwise, such activity does not fall under applicable rules.
An insurance company that intends to serve the interests of customs brokers is required to obtain a license for customs broker liability insurance.
Insurance object
The implementation of their professional activities and the possible failure to fulfill or poor performance of their obligations, as a result of which property damage was caused to third parties, is the object of insurance.
The work of the customs broker consists in the following tasks:
- declaration of declared products, cars, other vehicles;
- transfer to the appropriate service of documents and necessary information for customs processes;
- the provision of these goods, transport;
- conducting other activities related to the implementation of their brokerage activities.
Insurance event
The risk under the customs brokers liability insurance contract is the possible improper fulfillment of professional obligations under a contract concluded with third parties. The organization’s liability arises when the policyholder has caused property damage to his clients due to violation or failure to fulfill obligations under a professional agreement.
Damage received must be formally confirmed and sued for damages. Compensation may be awarded by court order. In addition, losses can be compensated if the insurance event occurred in the customs territory during the validity of the insurance contract, and it is directly related to the specified property.
When concluding a customs broker liability insurance contract, the company is obliged to indemnify for damage from the following events:
- failure to comply with the declaration deadlines;
- violation of the customs regime of goods arrived;
- incorrect calculation of customs duties;
- overpayment, non-payment or incomplete payment of accrued payments;
- fines, penalties, penalties for violations of customs operations;
- violation of the procedure for the use of goods and cars, if the customs procedure has not yet been completed.
Insurance coverage
The amount of liability under an insurance contract cannot be less than the amount approved by applicable legislative acts. It is established by agreement between the insured and the insurer. The insurance amount under the customs broker liability insurance policy may be of two types:
- Non-aggregate. This is the maximum amount of security for each insurance event. The company is liable for losses incurred only within the agreed amount.
- Aggregate. With this type of insurance liability, the contract determines the total amount. When the corresponding event occurs, the company compensates the victim for losses.The amount of liability of the insurer is reduced by this amount. Additionally, you can set a limit for one case, type of risk, product group.
When determining the scope of liability for liability insurance of a customs broker, a deductible may be specified in the agreement. With a notional amount of non-refundable damage, the company will not pay compensation if the loss is less than that amount.
If the damage received is higher, then the insurer calculates the full payment amount. With an unconditional amount of non-refundable loss, during the calculation of the amount of compensation, the financial institution will reduce the size of the deductible.
The liability of customs brokers is insured for the entire period of their activity or a one-time contract is concluded for a one-time transaction. In any case, the contract does not begin before the insurance premiums are paid to the insurer's account.