Did you know that property while in transit is not covered under your Property Insurance policy? What would happen if a machine is damaged during transit to a customer and the transportation company’s Cargo insurance doesn’t provide adequate coverage? If your operations involve moving a product from point A to point B, then an Inland Marine insurance policy will allow you to set predetermined limits to protect your property while on the road.
If you use the services of a third party to transportation company, you should be aware of Cargo Liability insurance. Many of our machinery dealer clients use third party services to deliver equipment to customers. If equipment is damaged during its voyage, the third party’s Cargo Liability insurance policy will cover the cost to replace goods while damaged in transit.
Cargo Liability limits are not standardized in the industry. Be sure that you and your insurance advisor are reviewing all third party insurance limits before using their services, or you could find yourself exposed to their lack of coverage
Even after you and your advisor have deemed the third party’s insurance satisfactory, exposures remain.
Their insurance policy may have been canceled and you as the certificate holder may not be informed. Their carrier may deem the damaged equipment in transit to be worth less than that agreed between you and your customer.
These, among other reasons, provide a strong argument for Inland Marine insurance as an added layer of protection above the review of your third party service providers.
A final added benefit of Inland Marine coverage is control over the claims process. You may file a claim under your policy for damage to property in the hands of a third party transporter. After you have received the benefit from your carrier, they will subrogate against the third party’s insurance provider.
If you have found this article informative and would like to learn more about protecting your operations, please contact me directly to discuss.