Remember Your Due Diligence

ITIC would recommend that Members carry out a thorough background check of the parties that they are intending to do business with. This is not only to satisfy any regularity issues, but also to ensure that you are able to make an informed decision on whether to accept the appointment. Those who undertake little or no due diligence, yet are prepared to extend credit, can quickly find themselves in difficulty.  

ITIC offer a debt collection service, which is additional to the professional indemnity insurance cover. After the 2008 financial market crash, there was unsurprisingly a rise in debt collection claims being notified to ITIC.  In many cases, it was found that the Member had accepted an appointment from, for example, "ABC Ship Management, as agents only". All too frequently ABC Ship Management would advise that they would have to wait for funding from their principals before being able to pay the agent. ABC Ship Management had no assets. There was very little that ITIC could do to assist the Members to recover the monies due. You need to know who your principal actually is to ensure you know who is going to pay you.

It is appreciated that some appointments may be received at short notice, which will require you to take urgent action. In these situations you may not have time to find out more, but ITIC would always encourage Members to know as much as possible about their principal, their reputation and to make an assessment as to whether they are financially sound and have the means to pay your bill. In addition, always be suspicious if the appointing party refuses to disclose details of their principal.