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Sunday, June 2, 2019

Delivery (of goods) - and exposure to liability…

‘Delivery’ would mean different things in different contexts… it has great relevance and meaning in Insurance contexts as well.  Childbirth, the culmination of pregnancy is one form of delivery. In the popular sport of Cricket, delivery is a ball –  the act of  bowling.  An over constitutes 6 deliveries. [there were 8 ball overs earlier and even recently in the finals of Hongkong Sixes tournament]
Whenever we buy goods, we ask for ‘home delivery’ – another form of delivery.  Pizza is the immediate example that strikes one’s mind.  Dial a Pizza and gets delivered in say 30 minutes in most cities.. there are some Companies which advertise that if there is delay of more than the specified period, they deliver you the pizza free !!  Delivery of goods would culminate in handing over and making it available at the place destined and would include transportation of goods  - there is so much of Marine Insurance in that – sale contract, transportation, mode of transportation, carriers, carriage acts, movement by road / rail, sea or air – contract of affreightment, multi-modal, ports, duties and more, if goods are to move from one country to another.

Delivery includes the process of transportation of goods through a mode, a carrier, a transport network.  Goods are physically moved from place to place via roads / rails – on land, through shipping lanes and airline networks – there are many people in such transaction.  We are not intending the traffic of data through internet reaching the destined point, which also could be delivery in some ways.  The process of moving the goods, handling them and distributing them to various recipients is logistics.   There are service agencies which specialise in moving goods from the point of production to the point of sale inclusive of the various places where they are handled, stored and moved. Besides the regular road, rail, sea and air carriers, there are also Postal and Courier services, which also receive, handle, store and deliver the goods at the destined places.

Generally, one goes to hotels to enjoy the delicate food; at times one would order a parcel and carry it home… but when it comes to pizza, one tends to call them on phone for delivery.  The various MNC specialising in pizza, have control rooms, preparatory points, sales and delivery boys and almost instantaneously deliver the grub at the ordered place ! 

From a simple insurance  perspective, there is no risk at all, the pizza is not too costly – and an accident, a peril or operation of something else, can utmost spoil the pizza,  or someother incident  - this when the pizza is treated as the subject matter of insurance….. the other things that could be insured would be – the vehicles that deliver the pizza or the boys who deliver the pizza.  Nothing complicated or so, it would appear…….

Not when, you spell the concept of liability – which would throw open a larger gamut.  It is not simple a sale of commodity – more of a ingestible  health product and hence the high risks of food liability including probable food poisoning – well that is an inherent risk of selling food whether at a restaurant or delivering at other’s place !

Then comes the risk of not executing the order within time and getting penalised.. again this may extend to some amount, which is not entirely not out of reach of a Food chain.. there also lies the risk of liability arising out of the acts of the ‘delivery boys’….  the ‘master is responsible for the acts of the servant..  All of us have seen the way, these boys drive around the city, in the race to outsmart others in the traffic and ensure delivery within the admitted time of 30 minutes. Just like any other vehicle on road, they could get involved in an accident and could cause injury to some giving rise to tortuous liability to the owner of the vehicle, which is the Restaurant / Food chain.

Read about an entirely strange incident of a liability claim filed for $15 million against a Pizza Co in USA.    It is a lawsuit against a leading Pizza and another Bank (!) by the family of a man employed for delivery of pizza.  The cause of action reportedly arose when there was a cal for delivery at a home owned by a bank. When the employee went there for delivery, there was none, presumably he had been lured there, was robbed and stabbed to death.  The family of the deceased have filed the lawsuit alleging failure on the part of the Pizza company to check the credentials and for failing of not assessing the risk of a criminal assault in the situation envisaged.  The Bank has been added as a party alleging their failure to secure the vacant building from criminal use. 

What would happen to the lawsuit  would be known only after some years – but the potential risk would send Companies of similar ilk scurrying for liability insurance understanding the  exposure to liability claims.  Of course, India is far away and we have not heard of much liability claims of these nature.

With regards – S. Sampathkumar.

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