Planes, trains and automobiles - Transit Insurance
Businesses must deliver their goods. In most cases this means by planes, trains, and automobiles. This means that your goods leave your premises and are subject to loss while in transit. How you manage this risk is an important business decision.
We deliver on our own vehicles
If you deliver your goods on your vehicles, the transit coverage in an Owner’s Cargo Coverage inland marine policy is what you need. This policy provides you with first party coverage on your goods on your vehicles. You specify the limits of insurance, and the premium is based on a combination of limits and deliveries, or vehicles covered.
We use others to deliver…
When selecting a motor carrier or delivery service, ask for proof of motor truck cargo liability insurance and what is the limit provided. Cargo insurance is considered a strict liability coverage where goods that are in the care custody and control of the carrier are their responsibility unless there are specific events that are acts of God, acts of a public enemy, or acts or default of the shipper, a public authority or inherent vice or nature of the goods being shipped.
The assumptions of cargo insurance is that there is a record of the shipment that describes what was being shipped and where it was to be delivered. The shipment must have been in good condition when turned over to the shipper and the shipper must document the damages done to the shipment.
The assumption that liability is with the carrier is a common starting point for the discussion. The wildcard that is present is the limit of insurance available for settling the claim. If you shipped a $250,000 machine with a carrier than has $50,000 in cargo limits, you may be chasing the carrier for the remaining $200,000. Do you have a contract with the carrier that specifies terms and conditions? In this case your contract would define the financial responsibility that the carrier needs to provide.
The supply chain issues highlighted in the pandemic make cargo insurance issues more important than ever. The rising costs of items during supply chain disruptions may make the cargo limits carried by the motor carrier inadequate. Recent price hikes in lumber and copper-based building materials have pushed prices to historic highs. Has the trucking company escalated their cargo limits in lockstep with the market cost increases?
As a shipper you have the option to purchase your own insurance for goods shipped with others. An inland marine Transportation policy is intended to cover your goods in transit under a bill of lading with another carrier.
The advantage to having your own transportation policy is that you control the terms and conditions of coverage, and you are a first party claimant to your insurance company. You pass the claims handling with the other carrier to your insurance company. You get the best claims service from your insurer, and they deal with recovery from the trucking company’s insurance carrier.
High Value Shipments
The concern about cargo limits becomes more focused when you are shipping a high value load. In these cases, it may be prudent to obtain a trip transit policy. This policy covers that particular shipment whether it is on your vehicles or the vehicles of a motor carrier.
You may find it easier to obtain a trip transit policy for a high value shipment than asking motor carriers to get a policy endorsement to increase their limits to satisfy your needs. As a first party coverage, you control limits and terms of coverage. If a motor carrier is involved, any recovery actions are left for your insurer to manage.
The Driehaus Difference
We know that transportation of your goods is a critical part of your business. We can help assess issues beyond insurance coverage with reviews of fleet safety programs, driver monitoring programs, use of telematics and how to use public data sources to monitor carrier performance. Our coverage knowledge for transportation exposures means we can help you protect what is important to you when it is on the move. Call us at 513-977-6860 or contact us at our website www.driehausins.com.