As the supply chain becomes more complex and costly every day, the business of freight insurance is also rapidly evolving, especially for high-value freight. For carriers, import/export businesses, and logistics companies alike, staying on top of the recent changes is vital for protecting your assets and being prepared for shipping complications. With all of the recent changes like reduced policy limits, rising premiums, and legal pressure, here is a guide to what your shipping business needs to know about recent changes in high-value freight insurance coverage.
Tighter Underwriting And Lowered Coverage Caps
One of the major shifts in the freight insurance industry is the reduction in maximum coverage caps. Insurers are becoming more cautious about high-value shipments, and are frequently reducing the amount of cargo they’re willing to cover under a standard policy. This trend is happening primarily in industries like electronics, luxury items, pharmaceuticals, and temperature-sensitive goods.
For many businesses, securing higher freight insurance caps will now require extra negotiation, higher premiums, or an extra supplement policy.
Tariffs Are Increasing Cargo Values
One of the biggest drivers of change is the rise of U.S. import tariffs. These additional expenses are now included in the overall amount that shippers are expected to insure, which is known as the “landed value” of freight. Because of this, even if the base cost of expensive goods hasn’t changed, their insurance value has.
If you have a shipment that formerly required $5 million in coverage, it may now need $6.5 million because of increased duties. You may have significant coverage gaps in the case of damage or loss if your policy does not reflect these increased values.
How Can Shipping Companies Protect Their High-Value Loads?
Because traditional freight insurance policies are changing and covering less and less, more shippers are looking for custom options. These policies have important add-ons like spoilage coverage, theft protection, debris removal, and loading/unloading liability coverage. These extra policies go beyond the now-limited traditional high-value freight insurance and help to cover those gaps that companies are now facing.
Many companies are also combining freight into fewer, larger shipments as a result of the growing costs and insurance changes. Although this lowers the frequency of transportation, the greater likelihood of theft, spoiling, or port delays raises the risk of each shipment.
These larger loads are being marked as high-risk by insurers more frequently, which has an impact on the accessibility and cost of high-value freight coverage. Carriers and shippers need to assess whether their insurance caps can accommodate these larger, higher-value loads.
Feeling Lost In The World Of Freight Insurance? Let Strickler Insurance Help You
We know that all of the recent changes and extra considerations can be very overwhelming for you and your freight company. That’s why our experienced team is here to help you. We want to sit down with your business and learn about your needs and concerns. Then, we can help you find the kind of trucking insurance coverage best suited for your freight or shipping company. Contact Strickler Insurance to find clarity and great high-value freight coverage for your logistics business today.
