Laura-May Scott and Margaret Campbell analyze the ABN AMRO Bank N.V. v. RSA et al case in detail and also cover what should be included in a marine cargo policy. ----more---- Transcript: Intro: Hello and welcome to Insured Success, a podcast brought to you by Reed Smith's insurance recovery lawyers from around the globe. In this podcast series, we explore trends, issues and topics of interest affecting commercial policy holders. If you have any questions about the topics discussed in this podcast, please contact our speakers at insuredsuccess@reedsmith.com. We'll be happy to assist.  Margaret: Hello, welcome back to the Insured Success IRG podcast. I'm Margaret Campbell, a partner at Reed Smith and this is my partner, Laura-May Scott. We are both insurance recovery specialists. Today we're going to present to you a case analysis on a very important case that we worked on during the pandemic. In this case, we represented ABN AMRO who was suing a group of 14 insurers in the company and the Lloyds Market and ABN’s broker, Edge, for losses it thought it should have been covered for under its marine cargo insurance policy.  Laura-May: And it's worth setting the scene here a bit and reminding listeners what a marine cargo policy typically covers. A marine cargo policy does not just provide cover for marine transit. It's capable of being extended to cover transport by air, rail, road and storage. So marine cargo cover can ensure the entire movement irrespective of the means of transport of the underlying goods. Now, under a standard insurance policy, it's only the physical loss or damage to the goods which is generally the subject matter of the insurance.  Margaret: So going back to the ABN case, the case there concerned losses of £35 million suffered by the bank when two of its customers Transmar and Euromar defaulted under a series of repo financing deals over cocoa and cocoa products. And a significant fraud was uncovered in relation to the defaulted transactions. Not only had the same goods been pledged to various banks, but the quality of the goods was absolutely terrible. Following their defaults, the bank was left holding large quantities of cocoa and cocoa products worth only a fraction of the loan repayments due to the bank. During the course of this case, Laura-May and I learned a lot about cocoa and cocoa products, much more than the man on the street ever knows. And we would issue a warning to everyone listening to this podcast to avoid cheap chocolate.  Laura-May: Yes, indeed. Initially, we worked with the bank and the broker to seek to persuade the insurers to actually pay out under the policy. We gave presentations to them on the underlying goods and the steps that were being taken by the bank to recoup losses. Thereafter, we entered into formal correspondence where the bank formally claimed an indemnity for the shortfall under an all risks policy of marine cargo insurance, which as Margaret says was placed with 14 cargo insurers in the London market by Edge brokers. However, the insurers formally rejected the claim after five long months of discussion.  Margaret: So this claim was actually made for financial losses arising from the defaulted transactions. The problem was the cargo was valued at 35 million and when it came to be sold, it was worth, you know, just a couple of million. Uh There had been no physical loss or doubt with just a question of quality. For those of you familiar with marine cargo insurance, there have been many legal authorities in England that say that in order to trigger a marine cargo policy, you must have physical loss or damage to the cargo. So what was different here? Well, in this case, this was precisely the risk that the bank was, was concerned about and they talked about it internally, they took legal advice from outside lawyers, they talked to their brokers, they went backwards and forwards for months saying in this scenario, what would happen in that scenario, what would h