You are reading: Why marine transit insurance makes sense now more than ever
Why marine transit insurance makes sense now more than ever
Goods lost or damaged in marine transit is something no business wants to experience. That’s when something goes awry along the supply chain with goods you’re selling, buying or intend to use in your business while it’s being transported by sea, air, rail, road, post or courier.
A lot can go wrong when your goods are on the move. So, whether you’re looking to protect your risks with your goods moving within Australia, or cover exports or imports, marine transit (also called cargo) insurance could make sense. It’s a technical and specialist area, so this article will explain how it gives businesses peace of mind.
Where COVID-19 has raised new risks
More than 50,000 merchant ships trade internationally, and Shipmap.org’s online visualisation shows what that traffic looks like. However, despite sounding like a well-oiled machine, up to a third of cargo at major hubs wasn’t loaded onto the vessel it was supposed to sail on, a recent study found. That’s due to COVID-19’s impact on the ships’ capacity, equipment shortages and global supply chains. And, even if your goods finally arrive in Australia, a workers’ strike could further delay their transit, as happened recently at Port Botany, in Sydney. The pandemic’s multiple waves, with its on-and-off-again business restrictions have also thrown a few spanners in the works.
Insuring through the carrier
While it is possible to organise cargo insurance through a carrier, or an overseas supplier, it tends to be based on weight or per item, which usually falls well short of the goods’ value. It’s also important to make sure your coverage extends to risks including:
- Abandonment of cargo
- Government rejection of cargo
- Loss of use/market
- War, strikes, riots, piracy
- Nuclear accident
- Improper packaging
Marine transit insurance is complex, and it’s preferable to seek specialist support to ensure you’re covered for every scenario.
Expert advice and tailored cover
As your broker/advisor, we strongly advise having your own policy to protect your goods in transit. It might be a requirement of your business loan or contract you’ve signed to verify you have your own certificate of insurance. Organising tailored coverage through a broker/advisor:
- Is customised to your specific needs and business operations
- Hands you proper as well as accurate documents
- Cover must deal with matters of domestic, international and maritime law
- Means you’ve got control over your claims to be paid the correct value of your goods, so you won’t be out of pocket.
We can advise you on available marine transit policies and how they can be customised to your business. These can protect your business for damage or loss to your goods due to fire, shipwreck, piracy, and rough seas, plus you can add extra coverage.
You might need just a single shipment policy or an annual policy covering your goods for a pre-agreed amount depending on the type of goods that are being transported. Annual transit insurance, for example, covers your goods travelling within Australia and globally, including imports, exports as well as the risks associated with Transhipment risks (the moving of goods from one conveyance to another). If you run a manufacturing business with several sites, for example, a stock throughput policy could be a good fit. It covers ocean cargo, inland transit as well as property and storage. As well, there’s carriers’ cargo liability, carriers’ goods in transit, and marine liability coverage.
Keep these extras on your radar
Just as autonomous and driverless vehicles are disrupting the future of road transport, expect the same to happen in marine transport. Insurers are working on the finer details of their coverage here. There are already semi-autonomous bulk carriers in Norway, and semi-unmanned ships expected on the waves this year.
So, you have solid options to protect your goods and business against marine transit risks. We’re here to help you navigate the complexity of this insurance for your business success.
Article originally published by Insure, November 2020.