Marine Transit Insurance

Goods in transit are highly susceptible to damage by collision, fire, storm, theft, jettison, or mishandling. Cargo insurance is an essential means to guard against serious financial loss, and in particular as a protection against supply chain exposure.

Insurance also provides cover when a voluntary sacrifice is made to safeguard a vessel, cargo, or crew and to get to a place of safety to prevent the risks of crashing, sinking, and even piracy and hijacking.

If the cargo is not insured, the surviving cargo will not be released until the owner pays for it.

Your business could be financially exposed to loss or damage to goods whilst in transit from your location to your customer’s premises. Equally important is the risk of loss or damage to inbound goods especially those purchased on an ex-works basis.

Goods in Transit Insurance

Where the exposure is limited to the movement of goods within the UK and where you are deemed to be responsible for any losses during the transit process. This can include sending to and from your business and exposure might depend upon your terms of trade – i.e. when is a payment made/received?

Marine/Airfreight Insurance

Normally accommodates the overseas movement of goods and includes transit by vehicle, aircraft, and ship. Again, the extent of your exposure would be dictated by the terms of trade with your customers and suppliers; i.e:

• Which party is responsible for insurance?
• Is there any insurance at all?
• At what point is payment for the goods made?
• Are you happy to rely upon insurance which may, or may not, be arranged by an overseas supplier of freight forwarder?

Stock Throughput Insurance

This can be a useful option to cover stock through the whole supply chain. It can provide protection from the point of purchase from a supplier to storage at your own premises, or at third-party locations, before eventual delivery to the end customer. This type of insurance provides a comprehensive one-stop solution for stock and can prevent possible gaps in the cover that might exist if the transit and storage risks are either not fully insured or are covered under more than one policy. It is particularly useful for companies whose products go through the hands of a number of subcontractors before final production and eventual sale.

Insurers normally assess premium by looking at the estimated stock movements to any given location on an annual basis. It is usual for insurers to provide quotes on a minimum and deposit basis with the potential for the premium to be adjusted at the end of the policy term. Some insurers will also offer cover without adjustment at the end of the policy period.

Many companies use third-party carriers to move their goods, a situation which should be treated with some caution in relation to the limited insurance coverage that may be offered by these haulage company. Similar problems also exist with warehousing companies and this is where the benefit of arranging your own stock throughput insurance arises.