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Cash-in-Transit Insurance in Contemporary Business Operations

By: Mawuli Zogbenu
Due to armed robbery attacks, it is always imperative to do cas in transit insurance
Due to armed robbery attacks, it is always imperative to do cas in transit insurance

‘It is not for nothing that even the Bible states that the love for money is the root of all evils’.

In the past few weeks, perhaps the biggest news and of particular concern of any risk-conscious institution was the one involving the murder of an expatriate who was said to have been carrying a huge sum of money in his car from the bank to his place of work. The incident was so bizarre, discussing it did not easily get drowned in the midst of many other cases of robbery during that week!

This week’s write-up would be limited to the implications for carrying cash from one point to another, particularly using vehicles.

Similar incidents prior
Readers would recall the case of the bullion van driver in the Eastern Region some two years or so ago. As unfortunate as this may be, what made it grab the headlines at the time was the fact that some ‘watchmen’ were the alleged culprits. These incidents happen quite often but in various forms as the target has invariably been the cash – cash being transported from one point to another. It is a fact that many things can happen while transiting cash from one point to another!

About five years ago, there was a report of an accident, near the Kwame Nkrumah Circle, involving a bullion van, carrying huge sums of money reported to have been hit by a commercial bus. The cabin of the van broke open and bundles of cash scattered all over. For some passers-by, it was an answered prayer, as motorists, both private and commercial all pulled up on the shoulders of the road to join the scramble for the scattered money. The police arrived in a timely manner to salvage the remains and immediately commenced investigations into both the cause of the accident and possibly locate the individuals who may have bolted with some moneys.

Similar bullion accident in Hong Kong
Four years ago, the Aljazeera TV had reported of the Hong Kong Police’s appeal to the public to return millions of dollars taken after a van transporting $68m (£44m) crashed on a highway.

An estimated $4.5m (£3m) worth of banknotes were left strewn across the road after the accident where dozens of people were said to have rushed to scavenge for the cash before the police got to the scene to secure the area. Much as swift investigations into these incidents are recommended, my contention was about the responsibility of the sender financial institutions and their allied service providers to have envisaged the likelihood of an armed attack, accident, loss due to several other factors, in the course of transiting money via bullion vans. Anyhow, the assumed onus was on the transporters of the cash to have a Cash-in-Transit (CIT) Insurance Policy as security for any such occurrences.

Cash-In-Transit (CIT) Insurance Policy
A CIT Policy provides cover for loss of or damage to money in the custody of an authorised person or institution, whilst in transit from the insured’s premises. The policy indemnifies the insured, usually the bank, against loss of or damage to safe or strong-room belonging to the insured or money lost in transit as a result of theft, within the limits of liability and the geographical coverage of the policy. Typically, insurers will require information on the limit per carriage to arrive at the estimated annual carriage and cash in safe.

What is Money in a CIT policy?
MONEY under this policy shall be deemed to consist of bank notes, currency notes, treasury notes, bank drafts, cheques, postal orders, money orders, insurance and postage stamps. For want of operational efficiency, many banks outsource the movement of cash to private cash-carrying companies. In Ghana, the private cash-carrying companies are presumed to be regulated by the Bank of Ghana, in line with their regulation on financial logistics and security. Other countries ,however, have their own pieces of legislations.

Signing on to the CIT Policy
A proposal form is normally completed with details about the estimated maximum amount in transit at any given time and the annual aggregate in transit. The premiums and renewal premiums are calculated on the amount of money in transit during the period of the insurance. The law requires the insured to keep accurate record thereof and avail them, at all times, for inspection. The insured shall also, within one month from the expiry of the policy furnish the insurer with the actual account details of all moneys-in-transit during the period. The premium for such period shall thereupon be adjusted and the differential paid as a return premium or additional premium. Meanwhile, the policy may be cancelled at any time before its normal expiry and in such event, no compensation or claim shall be payable.

CIT claim procedure
Prompt and thorough investigation of claims is crucial to indemnifying the insured for any one claim subject to the conditions of the CIT Policy. The insured is required to first and foremost report to the security agencies of the loss and furnish the insurer with all explanations, vouchers, proof of ownership and other evidences as may be required by the insurer to substantiate the claim. Notwithstanding the settlement of the claim, the insurer may, at its own expense and without prejudice, take appropriate steps to recover the lost money and the insured is obliged to assist in anyway necessary (e.g. provide information to either the insurer or the police).

Exclusions under a CIT Policy
Just like any other policy, these exclusions are factors or circumstances that may absolve the insurer from paying a claim. Under a typical CIT Policy, the following exclusions may vitiate the payment of a claim:

•    Damage occasioned by or through or in consequence, directly or indirectly, of any of the following occurrences, war, act of foreign enemy, hostilities or warlike operations, labour unrests, etc.
•    Abandoning dispossession resulting by order of any government de jure or de facto or by any public authority.
•    Any act of terrorism, regardless of any other cause contributing concurrently or in any other sequence to the loss, damage or expense.

•    An act occasioned by fraud or dishonesty of any employee, family or household member of the insured arising out of shortages due to clerical or accounting errors, outside the limits specified in the policy and deemed consequential.

The way forward
Developments in the past few weeks should be a wake-up call for corporate institutions to embrace the Cash-in-Transit insurance policy. Managers of such institutions must also ask questions as it is a very delicate type of policy which requires a more meticulous due diligence from both the insurer and insured in administering; hence the necessary safety precautions and education must be in place in order that both parties would be on the same page in the event of a mishap. Institutions which handle large sums of money, are particularly encouraged to constantly and actively have their CIT insurance policies in force so long as they remain in the business of working with MONEY which has, since time immemorial, been ‘sugar’ to ‘ants’!

Until next week, “This is Insurance from the eyes of my mind”