As the U.S. economy continues to move forward, one of the fastest-growing industries is Logistics and Freight Forwarding. While the term “freight forwarder” is used loosely, it encompasses a broad spectrum of services with respect to logistics, supply chain, and the direct or indirect transportation and warehousing of goods worldwide. More and more freight forwarding startups are entering the space, resulting in a highly competitive environment.
Shippers look to avoid any paperwork, bureaucratic procedures, border issues, insurance requirements, and all possible hassles associated with the transportation of goods, both domestically and internationally. If a freight forwarder, while acting as direct or indirect carrier or transportation intermediary (broker), manages to become a “one-stop hub”, its portfolio is sure to grow. To successfully achieve this, the broker or carrier must have the option to offer “All Risk” Cargo and Warehouse insurance coverage to their clients or prospects, thus insuring the shipper’s interest.
In essence, both Cargo and Shipper’s Interest policies cover goods against all risk of physical loss or damage from any external cause (subject to certain basic exclusions), but there are some key differentiators.
Shipper’s Interest coverage serves both domestic and international forwarders and transportation intermediaries, regardless of the size of their operation.
All freight forwarders, whether asset or non-asset based, should always retain (when applicable) the following coverage:
The purpose of the Shipper’s Interest section under their policy is not to undermine the necessity of these essential coverages, as they protect and defend freight forwarders in cases where they are legally or contractually liable. However, when an insured accepts coverage under the Shipper’s Interest policy that is primary in responding to such a loss, it is beneficial for all coverages to be kept under a single insurance carrier to provide a cushion against damaging their loss history, simplify the claims resolution process, and reduce the potential for gaps in coverage.
Freight forwarders and shippers operate in a very competitive environment and require comprehensive insurance solutions. Added services, such as Shipper’s Interest policies, are a key differentiator between a forwarder and their competitors. While this growing market segment provides a business growth opportunity for retail brokers, this is a complex coverage, and risks can differ for each freight forwarder depending on the specific services they provide. To learn more about the varying roles of a freight forwarder and the associated risks, view the article found here.
AmWINS Specialty Logistics Underwriters (ASLU), an AmWINS Group company, is a managing general agency specializing in the complex risk factors of the logistics and cargo industry. ASLU is dedicated to offering a high level of service to their clients through a unique balance of industry knowledge, responsiveness and technology. To learn more, visit amwins.com/aslu.
This article was written by Alex Rosas, Executive Vice President of AmWINS Specialty Logistics Underwriters (ASLU).
Legal Disclaimer. Views expressed here do not constitute legal advice. The information contained herein is for general guidance of matter only and not for the purpose of providing legal advice. Discussion of insurance policy language is descriptive only. Every policy has different policy language. Coverage afforded under any insurance policy issued is subject to individual policy terms and conditions. Please refer to your policy for the actual language.
(c) 2017 AmWINS Group, Inc.
As the healthcare industry remains on the front lines of battling the COVID-19 pandemic, staying abreast of the changing landscape and how the insurance market is adapting is critical to ensure new exposures are covered and renewals are successfully placed. In this article, our specialists share what they are seeing in the Healthcare and Senior Care markets, tips for risk control and mitigation, and how to get the best results for insureds.
The disruption to business and everyday life caused by the coronavirus (COVID-19) pandemic is resulting in an economic impact for insureds. Much of this disruption is likely not covered by insurance. We have consulted with several AmWINS insurance specialists across the Property, Casualty and Professional Lines sectors and offer a COVID-19 update.
Over the last few years, the legal cannabis industry has seen rapid growth and had a significant impact on the U.S. economy. With states continuing to legalize its use, insurance needs for cannabis-related businesses are becoming a popular topic of discussion. This article examines the evolving cannabis industry by exploring five key issues impacting coverage.
Construction contract negotiations, which determine the kind and amount of insurance required for a construction project, can be time-consuming, complicated and frustrating. Project owners require contractors on a project to name the project owner as an additional insured on the contractor’s casualty insurance program. It's important that both project owners and contractors understand the coverage provided by these additional insured endorsements. This article discusses four common ISO additional insured endorsements related to commercial general liability policies purchased by contractors, including their limitations, conditions and exclusions.
Parametric insurance is an innovative product that functions differently than traditional insurance by covering the impacts of an event and not just losses sustained to an asset. Proceeds of the policy are paid quickly and can be used flexibly to cover any expense associated with the triggering event. Coverages can be designed to capture the impacts of natural perils and other forms of non-damage business interruptions such as future epidemics. Learn how the parametric landscape has and will continue to play a major role in improving coverage and the recovery experience.
The theories of recovery, as well as the ensuing loss provisions, contained in property insurance policies are often complex and, at times, seemingly in conflict. Although a policy may not directly address these theories, their application by courts plays a significant role in the coverage determination process after the claim. It is essential that brokers understand the primary theories of recovery – Efficient Proximate Cause, the Concurrent Causation Doctrine, and the Anti-Concurrent Causation Doctrine – in order to navigate the challenging post-claim process and effectively serve their clients.