Are your valuable customer orders and stock insured while on the move?
Whether you’re a tradesman or contractor transporting expensive tools and materials from workshop to client site, or a renewable energy specialist installing PV systems at homes or businesses, the protection of your valuable stock and customer orders while in transit against damage or loss due to an accident, theft or hijacking is critical to the sustainability of your business, your reputation and financial stability.
Millions of small and medium size enterprises operate in South Africa’s economy. According to risk advisors and insurance brokerage, Aon South Africa, each day thousands of these business owners run the gauntlet of transporting valuable stock and customer orders to sites around the country, without the protection of insurance against their precious goods being damaged during transport or lost to accident, theft or hijacking.
“It is common practice in the contracting industry for clients to pay 70% deposits for orders, and then the balance upon successful delivery or installation of the goods – for example kitchens, shopfitting, solar PV systems, geysers, granite tops, CCTV equipment, alarms systems and so on.
If these goods are damaged or entirely written off during transit due to a vehicle accident, theft or hijacking, the business owner could be left in a world of pain of having to replace the damaged goods at their own cost if not insured, not to mention the enormous reputational damage which could ensue if customers are left compromised and out of pocket.
When materials and stock are essential assets in your small business, it’s crucial to protect them while on the move under a “Goods in Transit” policy as part of your commercial insurance,” explains Clayton Ellary, Commercial Branch Manager at Aon South Africa.
A ‘goods in transit’ policy typically covers for:
• Loss of goods during transit as a result of an accident
• Theft or hijacking of goods during transit
• Damage caused due to transit
“Goods in transit insurance will cover you for the loss or damage to goods that you are responsible for while being transported to and from your business premises to the destination site. This is especially important when you’re responsible for goods that have already been paid for by a customer and are pending delivery or installation by you,” adds Clayton.
The importance of this insurance cover for a commercial business (of any size) becomes clear when you consider for example the impact of losing a R200k Solar PV consignment of inverters and solar panels in a vehicle accident. Another worrying trend to consider is the increase in hijackings of branded vehicles with known valuable cargos and equipment such as IT, electronics, solar products, CCTV and alarms, designer apparel and so on – criminal syndicates target and hijack these vehicles, the stock is rapidly offloaded into waiting vehicles and they disappear almost as quickly as they strike.
“The most important aspect is to ensure that you have sufficient cover for the value, frequency and type of goods that you are transporting. While policies vary from insurer to insurer, an experienced broker will be invaluable in taking you through a thorough needs analysis to determine your exposures and match that to the most appropriate insurance cover.
In instances of high value goods being transported on a more frequent basis, you may require more comprehensive cover and higher sums insured under a marine policy, which would not be available on a standard commercial goods in transport policy,” explains Clayton. Aon has a Marine Insurance division with a dedicated team that has the specialist expertise to design, develop and place the most appropriate cover for your business needs.
“Goods in transit insurance is an essential but often overlooked essential for every business owner that transports goods between sites. An accident or theft of a major client order can and does happen and typically spells financial ruin without insurance cover. For many SMEs, a loss like this in the current constrained economy can be a massive, if not catastrophic blow that could close doors and wreck your professional reputation for years to come.
A broker with sector-specific experience of the many risks facing your commercial business is invaluable in ensuring that your cover is adequate to cover your unique industry risks, that it complies with any contractual agreements you may have with customers, and that you are not exposed under any exclusions and conditions that may exist on your policy,” concludes Clayton.