Moral Hazard: Bordering on fraud.

Recently We came across a case, wherein, due to
sheer negligence of CFS, a costly consignment was
damaged. The survey was carried out. However,
When the landing remark certificate was issued (this
is given by the port authorities), it reflected that the
subject consignment was delivered damaged.

There are two implications of this. Whilst the CFS’s
liability is unlimited, the Vessel’s liability is limited
per package / per Kg. And if the vessel and CFS are
owned by the same governing parties, they can reduce
their liability by a sizable chunk if the consignment
is of high value.

I do not understand what we should term such actions
by port authority personnel, a moral hazard or
outright fraud. While the insured gets his claim from
the Insurance Company. Subrogation is prejudiced,
technically speaking.. And the port has got nothing to
loose in this.