A shipbroker has contributed US$24,000 to settle a demurrage dispute after failing to pass on key documents promptly, in a case that illustrates how procedural gaps can draw an intermediary into a dispute they did not originate.
The claim, featured in the most recent edition of International Transport Intermediaries Club's (ITIC) Claims Review, centred on a US$48,000 demurrage claim that shipowners were pursuing against charterers following delays at discharge. The broker’s role was straightforward: pass on the supporting documents and objections between the two parties. The delay in doing so meant charterers’ objections did not reach the owners in time, narrowing the opportunity to address weaknesses in the underlying claim before the dispute hardened.
Liability was not clear-cut. The owners’ claim had its own deficiencies, and causation was disputed. ITIC assisted the broker in negotiating a commercial settlement, with the broker ultimately contributing half the value of the claim.
The case turns on a risk that sits at the heart of any intermediary’s professional exposure. A broker handling post-fixture communications is not simply a conduit. The timing and accuracy of what they pass on, and when, can determine whether a party can still defend itself. ITIC has flagged the failure to forward claims documentation within contractual time limits as a recurring cause of claims against shipbroking members, a pattern the insurer has documented across multiple editions of its Claims Review.
The specific danger in demurrage disputes is contractual time bars. Charterparties routinely include provisions requiring that claims and supporting documents be submitted within defined deadlines, often 60 or 90 days following completion of discharge, depending on the charterparty form. A delay of even a few days can render an otherwise valid claim time-barred, leaving the owner with no recourse against the charterer and a potential claim against the broker who sat on the paperwork.
Mark Brattman (pictured), claims director at ITIC, said the broker’s position in the information flow makes prompt forwarding non-negotiable.
“Shipbrokers sit at the centre of the information flow between owners and charterers,” he said. “When documents or objections are not passed on promptly, the broker can find themselves part of the dispute, even where the underlying claim has weaknesses of its own.”
The settlement illustrates what professional indemnity insurance does beyond paying a finding of fault. The US$24,000 contribution was not the product of a clear finding of fault. It was a negotiated outcome in a situation where both liability and causation were genuinely ambiguous.
ITIC’s involvement meant the broker had access to expert assessment of that liability position and professional support in reaching a resolution. That function is distinct from simply paying compensation when negligence is established. That dynamic is consistent with what ITIC has documented across recent cases involving marine professionals facing disputed claims, where the value of cover has often been visible in the defence and negotiation process, rather than in the indemnity payment alone.
“Demurrage claims often carry tight contractual time bars, so claims and supporting documents should be passed on as soon as they arrive, with a record of when that happened,” Brattman said. “Even a short delay can prejudice a party’s position and prove costly.”
According to ITIC’s 2024 claims commentary, 801 indemnity and debt claims were reported across all membership categories that year, with shipbrokers ranking as the second-highest source by member type. That figure is a reminder that document-handling protocols such as timestamped forwarding, acknowledgment tracking, and clear internal routing are not procedural formalities. They are the first line of defence against PI exposure.
