What are the potential consequences of Brexit for the transport sector?

The prospect of Brexit is causing a great deal of uncertainty and concern in many sectors. The transport sector also has its concerns, amongst others around the new risks that Brexit may bring. To what extent will these still be covered by their existing insurance?

What are the potential consequences of Brexit for the transport sector?

The UK will shortly leave the European Union. At the moment, it’s still not clear whether it will be a ‘hard’ or a ‘soft’ Brexit.  If it’s a ‘hard Brexit’, there will no longer be any trade agreements between the EU and the UK. Under a ‘soft Brexit’, there will no longer be freedom of services between the UK and the EU but there will be trade agreements which will enable the placing of cross-border contracts.

Clearly, Brexit doesn’t mean that all commercial agreements with the UK will suddenly come to an end. But it may have specific consequences, amongst others in terms of liability in the transport sector. We highlight a number of potential new risks below:

Increased risk of losses caused by delays

Since, after Brexit, the UK will no longer be part of the European Union, long queues may occur at the border. There is a risk that these queues will be so long that some goods will be spoiled on arrival. Or that goods will not be delivered on time and contractual penalties will be imposed as a result.

If the delay is unexpected, the carrier can claim force majeure. Clearly, however, he must be able to prove that this is the case. If he can do so, he will not be liable for the loss caused by the delay. If he cannot prove it, his liability will be limited under the international convention for the international carriage of goods by road (CMR).

If, at the time of loading, it is clear that there is already a delay at the border, the carrier should contact his client. That way, the client will be responsible for deciding whether or not transportation of the goods should proceed.

Goods transportation insurance can offer a solution to this problem. This allows your client to cover themselves against certain risks, e.g. the risk of goods being spoiled.

Stowaways

If a truck has to wait at the border, there is a risk of migrants hiding in the vehicle. It is the driver’s responsibility to prevent this from happening. If migrants are found, he may be fined by the UK Border Force. So, it’s advisable to check the vehicle on a regular basis and to record the time of these checks in a logbook.

With additional cover from your legal protection insurance provider, as a carrier, you can claim compensation for any legal expenses that you incur, provided that the fine was imposed by the UK Border Force and the fine was unjustified.

Risk of liability for documentation

If a business transports goods to a country outside of the EU, generally speaking, it will also be responsible for providing the correct customs and excise documents. If these documents are not in order, the client may hold him liable. So, it’s important to keep up to date with the rules governing the import and export of goods to countries outside of the EU.

Vanbreda offers various types of liability insurance that cover this risk.

Third party liability insurance

Within the EU, any third party liability insurance is valid. A driver with Belgian insurance is covered in all EU member states. After Brexit, the UK will no longer be part of the EU, so a driver driving in the UK will no longer be able to claim on this insurance.

He will have to take out additional insurance to be covered in the UK. Vanbreda can provide you with information on this.

What about alcohol and cigarettes?

Drivers often buy alcohol or cigarettes for their own use when they’re abroad. After Brexit, the checks are likely to be more stringent. So it’s important that every driver understands what is permissible and what is not.

Deliberate recklessness is not covered by insurance policies. Moreover, if he has deliberately flouted the rules, e.g. in the case of smuggling, the driver in question will not be able to claim under legal protection insurance.

Christophe Maes

We are there for you.

To find out more about how to protect yourself against these new risks post-Brexit, please email us at e-mailadres Christophe.maes@vanbreda.be or call us on +32 3 292 00 34.

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