Supply chain and logistics may seem risky in a world that can’t keep up with demand. Factories struggle to satisfy demand, and ships aren’t big or fast enough to accommodate the resulting logistics demand. At the same time, risk exposure is heightened. It is more than the probability of loss.
Cargo loss is widespread thanks to the increase in the size of container ships, longer transit times, plain old human error, unpredictable weather, cyber threats, political and piracy threats, and machinery breakdown.
These factors have a pretty significant financial impact. If you don’t have insurance, the only way out is carrier liability which is quite limited. Spending a few hundred dollars can save you tens of thousands should the worst happen. If your purchase orders include higher-than-usual volumes if you are investing in new product introductions, and if you have increased logistic bills, a loss at this juncture can cost a lot. Historically insurance has always been there to cover part or all of your cargo loss, but typical coverages may no longer make up for the full impact on your business. Companies are searching for flexible cargo insurance, which evolves with the challenges of modern supply chains.
Fit your insurance to evolving risks
Recent increases in risk exposure might result from accelerated consumer habits. However, the impact on your business still occurs. Market factors are less significant when you are dealing with missing goods. In such instances, you want to know how to get your supply chain back on track. The combination of the specific incident type and your cargo insurance coverages determines how much you can recover after a loss. Watch how incidents are shifting to discover which coverages might best fit you.
You need to insure your goods against rough handling so you can easily lessen the impact of an incident. Select an annual policy which covers all your shipments or scaling insurance to cover cargo by the shipment. These policies cover the value of your commercial invoice, freight, and duties. An annual policy allows you to extend coverages to specific circumstances in ports and warehouses.
Congestion serves as a double-edged sword for firms experiencing loss. Replacing cargo is tough when factories have extended lead times and bottlenecked ports. For firms that need to hit sales targets, insurance may help. If you insure goods with retail value coverage, you may potentially recover the total retail sales price for your damaged goods for a part of the cost.
As risk exposures continue to change alongside other supply chain and logistics issues, the correct mix of insurance coverages may help protect your company from disasters and everyday complications. Take the next step, and safeguard your goods by insuring your cargo now.
