Insurance providers are struggling to keep up with changes and need a new approach to understanding the risks in today’s logistics sector, said Mike Foster, regional director of TT Club.
He warned that insurance purchased by logistics operators today is still based on a model for freight forwarders that has evolved little in the last 30 years. As a result, he said that many logistics operators run the risk of their insurance being inadequate.
Calling for more underwriters to assess risk on present-day contract criteria, Foster said that there was a need for greater understanding by operators of the risks implied by their contract terms.
Foster said: “The traditional forwarder accepted risks in relation to his customer’s goods, which he limited through his standard trading conditions and against which he insured, retaining little risk for his business, But for the logistics operator, the bounds are not so set. Liability for goods does not cease at the customer¹s gate: it may extend to delivery to the production line. He may even be part of the extended production line, with pre-delivery inspections now trumped by minor assembly work.”
