If your company is in the business of importing, distributing or exporting, there's always concern over ensuring goods are protected until they make it to their final destination.
For businesses with operations that involve the full chain of production - from raw materials and production through shipping and warehousing - a single all-encompassing insurance policy might be the best solution to safeguard the value of the inventory for the entire duration of its travel. Rather than buying separate policies such as marine cargo, inland transfer, stock and business interruption, businesses can purchase “Inventory” or “Stock Throughput” insurance from a single provider. This type of policy allows for seamless protection throughout the supply chain, beginning from the purchase of raw materials extending through the final inventory of completed products, no matter where in the world they start and end their journey.
The major benefits of consolidating the risks under a global policy includes more effective risk management, the potential for better pricing and lower deductibles as well as a smaller chance of a serious interruption in business should a loss occur.
Inventory/Stock Throughput policies offer a broad range of coverage to protect your assets throughout the supply chain. Some coverages that can be included are highly tailored to the unique risks facing companies in British Columbia.
One key coverage type for businesses with operations based in BC and along the West Coast is the inclusion of earthquake. If you have assets located in, or moving through, territories deemed to be at high risk of earthquakes, the insurance provider will often include the risk in the Inventory/Stock Throughput policy without the rate loading or high deductible that are applied to traditional policies.
Selling Price Valuation
Another option that can be included is selling price valuation, ensuring that reimbursements cover the selling mark-up for finished goods in inventory. Selling price valuation can be added to your Inventory/Stock Throughput policy in place of a separate Business Interruption policy. Additionally, businesses can also secure policies that include reimbursement for government detainments - even if the goods themselves are not damaged.
From a claims administration perspective, companies work with a single claims team that handles all issues with Inventory/Stock Throughput policies. Not only can working with a single claims team accelerate the reimbursement process, the business is also free from negotiating with several carriers and there is no confusion over who covers what portion of the losses. The ultimate goal, of course, is to keep the business running with the least amount of disruption and expense as possible.
Due to its complexity, not all insurance companies will offer these types of policies, and the terms and conditions may differ widely among the ones that are providers. It’s best to work with a broker you trust - or find one with a sterling reputation in this area - to work out the finer points of this coverage and recommend the best choices on the market for your individual circumstances.
For more information, contact a CapriCMW Risk Advisor.