Details of the risk
- The insured is resident in France.
- The insured’s goods are going to be in transit by land from Luxembourg to Belgium.
- The policy will also cover damage to the insured goods when they are in storage in Belgium for 90 days,
- The business is placed through a French coverholder.
For goods in transit risks, the risk location may be determined by the following factors:
- The country/territory in which the insured is resident, or its establishment is situated, and
- Where the goods are physically situated or being imported to and from.
Whether or not a factor is relevant will be dependent on the countries/territories identified.
Analysis
France:
EU insurance law which is applicable in France states that “a risk is located in an EU/EEA member state if relates to:
- A building (and its contents if covered under the same policy) situated in that member state.
- A motor vehicle, ship, yacht or aircraft registered in that member state.
- A travel policy for four months or less taken out in that member state.
- For all other types of insurance, it is a risk of that member state if the insured is habitually resident in the member state or for a business or an organisation if the establishment to which the contract relates is situated in that member state."
As the insured is located in France, the risk has French risk location and is subject to the French regulatory and tax regime.
Luxembourg and Belgium:
The EU rules mentioned above are applicable in Luxembourg and Belgium. The fact that the goods are going to be in transit by land from Luxembourg to Belgium is irrelevant to the regulatory risk location as this concept is not recognised under EU law, therefore this does not create a regulatory risk location in either of these countries.
However, as the policy is insuring goods that will be stored in Belgium for more than 60 days, a tax risk location will arise in Belgium because the moveable property is located there. Therefore, a premium apportionment will need to be carried out and the premium allocated to the goods in storage element of the risk will be subject to the Belgian tax regime.
As there is a single regulatory risk location and it is in France, the risk must be written by Lloyd’s Europe using the Lloyd’s Europe stamp.