Case 3 Cargo Liability - Warehouse

A member's warehouse was severly damaged during a storm, when strong winds blew off part of the roof and caused the remainder to collapse. Cargo stored on the member's facility - both inside and outside the warehouse - was damaged by falling or flying debris, while some of the cargo in the warehouse also suffered extensive wet damaged from the heavy rain. Two fork-lift trucks and a racking system in the warehouse were also damaged by the collapsing roof.

The member made a claim under his property cover for the repairs to his warehouse and equipment which, together with the associated clear-up costs, came to more than USD 800,000. A number of cargo-owners also submitted claims for damage to their goods, but the member, acting on the Club's advice, rejected them all on the grounds that the damage had been caused by a storm, an excepted peril under the member's trading conditions. Those claims were not pursued and eventually lapsed.