SIMIC

LONDON transport insurance giant TT Club applauds equipment sharing agreements as efficient use of resources, but warns of needless liability if insurance cover is not in place.

To improve understanding of the risks and benefits involved, the TT Club is issuing the first of its new "Risk Bytes" publications.



The benefits of good neighbour agreements are well recognised and utilised by cargo handling operators, and others in the supply chain, said the TT Club statement.



Sharing infrequently used equipment gives greater flexibility in operations has significant cost savings. Usually reciprocal arrangements, they are not always formally outlined in well-defined contracts, it said.



"In such circumstances the casual nature of the arrangement, though often workable and agreeable to both parties, can lead to potential risks where liability and responsibility in the unfortunate event of an incident or breakdown may not be clear," said TT's Mike Yarwood.



"It is these circumstances that we are seeking to help operators avoid with our recently published 'Risk Byte: Good neighbour agreements'," Mr Yarwood said.



The Risk Bytes are designed to provide a snapshot of the risks associated with day-to-day operating risks that may not be recognised or, if they are, not sufficiently covered by the relevant insurance policies.



"Is in the event of the equipment or machine being lost or damaged during the period of the loan leading to financial exposure for the owner. In addition, this might severely impact business operations and cancel out any benefit gained from the arrangement, and severely damage years of a good working relationship with the neighbour," he said.



"We recommend checks on financial stability and whether sufficient and appropriate insurance cover is in place. But we are also offering advice on adequate staff training, health and safety provision and include a readily recognised case study of a typical asset sharing operation," Mr Yarwood said.