Cargo insurance saves Argus Group from million-dollar loss.
Argus Group, Ltd. is an oil and pipeline construction company that sources goods from all over the world.
Argus’ supply chain runs through some of the world’s most complicated and high-risk countries.
Doing business primarily in Russia and former Soviet countries, the company ships every type of cargo through every possible mode – plane, ship, truck, rail and more.
A comprehensive cargo insurance policy
Argus has insured its shipments, regardless of carrier or mode, through a comprehensive policy with UPS Capital since 2001, and had very few supply chain incidents over the years. That is, until the summer of 2012.
Policy saved Argus from catastrophic financial loss.
In just one month, their cargo insurance policy saved the company from two unusual shipping issues totaling a million dollars in lost goods.
Claim 1: Truck Catches Fire
A truck carrying a load of Argus’ welding equipment was on its way from Finland to a jobsite in Moscow when it caught on fire. By the time firefighters had arrived, the truck and its contents were consumed in flames. The $809,000 shipment was a total loss.
“Of course, we replaced the goods right away for our customer,” said David Lax, vice president of operations, Argus Group. “Without insurance, it would have been an unmitigated disaster.”
Argus’ claim was paid in full about the same time the invoice came for the replacement parts they’d ordered.
Claim 2: Containers Expire
A cargo ship bound from Charleston, South Carolina to Antwerp, Belgium was carrying two of Argus’ containers when it burst into flames in the Atlantic Ocean 1,200 miles from land. It took 11 months to salvage the ship, tow it to port, resolve the General Average claim (which was covered by Argus’ cargo policy) and deliver the goods to their destination in Russia. And though the containers, valued at $150,000, were undamaged, their contractual shelf life had expired, so Argus had already replaced them for the customer.
Powering through the difficult international process of evaluating the viability of the goods, Argus ultimately received a claims settlement for $150,000, plus an additional 10% to help cover the demolition of its goods. Without their cargo insurance policy, Argus could be in a much different place financially than it is today.
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