The global nature of trade means that logistics has become a much more intertwined phenomenon. A consumer gadget bought in Singapore might have been manufactured from raw materials in South Africa, assembled in China and warehoused in Hong Kong before dispatch to Singapore. Logistics is the glue that binds this all together and companies are seeing an explosion of demand through the rise of e-commerce and digital marketplaces. As volume and complexity of deliveries continues to skyrocket, so do the risks associated with logistics, adding further pressure on logistics companies to effectively manage those risks.
Why do logistics companies need insurance?
Insuring your company is all about managing the risks by transferring them to an insurer. It’s about protecting the assets, people and cash flow to weather any incidents in order to continue operating a successful business.
Accidents, lost items, damaged goods… who gets the blame if anything goes wrong during the shipping process? Logistics companies usually get the blame and have to absorb the cost of incidents, reinforcing the importance of insurance. Furthermore, as more logistics companies move upmarket to deliver goods that vary from Chanel bags to expensive medical equipment, the frequent incidents of damaged and missing goods become extremely costly.
What insurance policies do logistics companies need?
Freight Forwarders’ Liability Insurance (also known as Bailee’s Liability Insurance): crucial for all logistics companies involved in storing, carrying, or coordinating cargo through the transit life cycle. This insurance protects them from claims made by customers or third parties for their legal liability for the lost or damaged cargo. The insurance is there to protect them from their legal liability as bailees.
Goods in Transit Insurance: important for manufacturers or those that rely on third parties to store and / or ship their products to their customers and others. This is a cargo insurance that protects goods for physical loss and damage whilst in transit. Most cargo policies are offered on either an all-risk basis or a named peril basis. All-risk policies cover any cause of loss other than those that are specifically excluded by the policy, e.g. war and terrorism. Named perils policies only cover those risks specifically named in the policy, e.g. fire or explosion.
Stock Throughput Insurance: useful if your business is involved in exporting, assembling, manufacturing and / or distributing goods to customers. A Stock Throughput Insurance policy which is a form of cargo insurance protects inventory against physical loss and damage. It covers products across all stages in their life cycle; from raw materials to finished goods in your customers’ hands. It covers the goods over any mode of transportation, domestically or internationally, and across multiple logistics partners. It is a comprehensive product designed to meet the needs of our globalised trade economy.
How do I find insurance?
Anapi believes in providing our businesses with the best tools to manage insurance using data. Our software benchmarks your policies against similar companies in your vertical and gets quotes from multiple insurance carriers specialised in logistics to present you options for cost effective coverage.
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