"The merchandise was damaged in transit" is not welcome information. Recovering from the loss will depend upon how well you and your insurance broker have identified your supply chain risks, assessed those risks and put adequate coverage in place. Below are 10 questions that a knowledgeable cargo insurance broker partner should ask when developing a cargo insurance policy that is structured to protect your company’s unique supply chain risks and exposures.
1. How are your import and export cargoes and/or distributed goods insured currently?
This is a place to start to understand whether your assets are adequately protected against loss.
2. Do you use a forwarder, logistics company or transportation carrier to help manage goods in the supply chain?
3. What are the goods and their approximate value in the supply chain on an annual basis?
4. What is the geographic scope of the supply chain?
5. How are the goods packed?
6. What are your terms of sale and/or your purchase terms?
7. If you sell your goods on cost-and-freight terms, do you have insurance if title to the goods does not transfer to the buyer?
8. If you purchase goods on cost, insurance and freight terms, do you have contingency insurance that fully protects your interests as a buyer?
9. Do you have any of these exposures in your supply chain: storage/warehouse exposure, consolidation exposure, staging exposure, processing exposure, fulfillment exposure?
10. If your goods are insured by you, under a policy in your name, what are the coverage terms? Are any supply chain exposures not covered?
Leslie Levy August is secretary general of Trade Bridge International and a licensed property & casualty insurance broker in Barrington, Ill. She can be contacted at firstname.lastname@example.org.
Steve Connor is president of Wyvern International Insurance Brokers and a licensed property & casualty insurance broker in Barrington, Ill. He can be reached at SConnor@WyvernInsurance.com.