‘No deal’ Brexit comes with insurance doubts

New Zealand exporters might not be covered by insurance if goods they send to the United Kingdom are held up or spoilt because of a Brexit ‘‘no deal’’, the Insurance Council says.

The industry body’s chief executive, Tim Grafton, said marine cargo policies typically contained clauses that covered exporters if their shipments were delayed at the border or rejected at Customs.

But both these types of cover were only available ‘‘when the cause of the rejection or delay was unforeseen at the time the shipment left New Zealand’’, he said.

‘‘This is because insurance can only cover sudden and unforeseen events or accidents.

‘‘The possibility of the UK leaving the European Union without a Brexit deal in place has been known for some time now; therefore it’s possible that a claim arising as a result of a hard Brexit may not be accepted by insurers.’’

Each insurer would make their own decisions based on the circumstances of a claim, so the Insurance Council was encouraging anyone who might be affected by Brexit to get in touch with their insurer to understand their cover, he said.

Britain is currently due to leave the EU on March 29 and the fastest sea freight times between New Zealand and British and European ports range between 21 and 24 days, meaning exporters may soon be sending goods to the UK that could arrive after a ‘‘no deal’’.

Custom Brokers and Freight Forwarders Federation chief executive Rosemary Dawson said there was ‘‘absolutely no clarity’’ on what the process might be for handling imports and exports in the event of a ‘‘no deal’’ Brexit.

She could not see established trade stopping between the UK and New Zealand.

But she said exporters that ‘‘trans-shipped’’ goods between the UK and Europe – either by sending goods first to the UK and then to Europe, or vice versa – could face challenges.