Feb 2024: Logistics and Warehousing insurance is designed to protect businesses involved in storage, transportation and distribution of goods.
This particular type of industry faces unique risks due to the movement and handling of products across various stages of the supply chain & it is important that businesses involved in Warehousing and Logistics carefully assess their specific risks and tailor their insurance coverage accordingly.
Here are some key components of Logistics and Warehousing insurance:
Goods In Transit Insurance:
Goods in Transit Insurance specifically covers the transportation of goods from one location to another, whether they be your own goods or goods belonging to another party. GIT Insurance covers the cost of replacing the inventory and is required for any businesses engaging in warehousing and logistics or delivery, ensuring the protection of the stock against potential losses or damages while in transit.
Coverage under this type of Insurance can vary depending on the size of the business transporting goods and what they are transporting. Policies can be tailored to meet the specific needs of the business, this may include coverage limits, deductibles and protections. Insurers would consider the value of the goods, type of goods (high value, low value, theft attractive goods, perishable, frozen, hazardous, chemical etc) and the destinations (national / international) and ownership of the goods.
An example of a Goods in Transit claim is outlined below:
- During transit, a delivery truck is involved in accident on the Motorway. The accident results in significant damage to a shipment of computer chips. The impact causes some of the packages to be crushed, leading to partial or total loss of the electronic components.
Because the Computer Chips were in the possession of the company transporting them, they will be held responsible for the cost of replacement or reimbursement and this is where Insurance can kick in.
Liability Insurance:
There are three main types of Liability Insurance for warehousing & logistics:
Public Liability coverage offers protection against third-party claims for both bodily injury or property damage that occur on the premises of the logistics or warehouse facility.
Lets consider a hypothetical example of a Public Liability claims in a warehouse to illustrate how this type of insurance might give rise to a claim:
- During a routine visit, a client representative who is touring the warehouse trips over a misplaced pallet and falls, sustaining a broken wrist. The pallet had been temporarily left in an aisle by a warehouse employee who was in the process of restocking shelves. The client sues the warehouse for medical costs and damages.
Incidents of this nature should always be reported to the insurance company immediately. The Public Liability for a warehouse would usually be covered under their commercial combined package.
Carriers Liability insurance covers the liability of the carrier for loss, damage and delay of customers goods which are being transported under a contract of carriage.
- Cover available under conditions of carriage
- Legal costs
- Accidental mis-delivery
- Temporary/Incidental storage
- Contingent Liability for bone fide sub-contractors
- Theft attractive goods
- Trailer/container/fridge cover available
- All risks and full responsibility options available
Employers Liability policies insure you against liability and costs, in respect of personal injuries or illness incurred by employees in the course of employment, during the period of insurance. The policy will usually extend to covering the employer in proceedings arising out of alleged breach of duty.
Business Interruption Insurance:
Business Interruption provides cover for financial losses which result from a temporary shutdown of operations due to insured “perils”, such as fire, escape of water, explosion etc.
An example of a Business Interruption claim in the warehousing business may look as follows:
- A large warehouse serves as a distribution centre for various products. The warehouse is completely flooded following a storm. The flood has caused extensive damage to the facility, rendering it temporarily unavailable for usual business operations. Once there is flood cover in place, the Business Interruption element of the policy will kick in to cover any losses to profits caused by temporary closure for a specified time frame. This will depend on the type of policy and level of coverage that you have in place. If the client has “increased cost of working cover” the additional expenses arising from temporarily moving premises would also be covered.
Fleet Insurance:
Fleet Insurance covers liability to third parties and physical damage for owned or leased vehicles used in connection with the business. This type of policy will cover multiple vehicles on one policy much like any private car policy, only they are all insured under the one roof.
Cyber Insurance:
Cyber insurance protects against Cyber threats, such as data breaches or hacking incidents which may cause systems to malfunction and can compromise sensitive information related to logistics and warehousing operations.
Consider a scenario where a Cyber claim may arise:
- A warehouse experienced a Cyber Incident that significantly impacted their operations. The incident involved a ransomware attack on their central inventory management system, compromising sensitive data and disrupting their business process. This ransomware attack came from a sophisticated variant through a Phishing Email, encrypting crucial files and rendering the central inventory management system inaccessible. So not only have the attackers gained access to sensitive customer and supplier information, they have completely disrupted the day to day operations of the business
Cyber policies usually would give the following covers covered:
- Privacy Breach Notification & Crisis Management Costs
- Privacy & Security Liability
- Cyber Extortion
- Business Interruption – Loss of Profits & Operational Expenses
- Data Recovery & System Damage
- Regulatory Defence and Fines
- Payment Card Data Security Liability
- Additional Covers such as Social Engineering & Funds Transfer, Fraudulent Use of your Identity & Property Damage
Our team can assist you through the myriad options and tailor make a package of insurance that is affordable and fits your business.
Speak to Emma Bourke today to learn more or email ebourke@bradyinsurance.ie or go to our Contact Page Here.