July 25, 2025 • 16 mins
Dylan from Innovate Insurance explains the crucial differences between cargo insurance and freight liability policies, highlighting the concerning statistic that 80% of globally shipped freight is either underinsured or not insured at all.
• Specialist insurance brokers understand logistics risks better than general brokers or freight forwarders
• Many cargo owners mistakenly believe shipping lines automatically provide comprehensive coverage
• Three main types of cargo insurance: single trip, annual blanket cover, and open cover policies
• Annual blanket coverage typically saves approximately ten times compared to multiple single trip policies
• High-risk commodities like lithium batteries require additional questions and specialized coverage
• General average costs are covered by cargo insurance but not by freight forwarder liability policies
• Standard policies typically exclude war risks and delays, though additional coverage can be arranged
• Real case: a £300 annual premium saved a mobility scooter manufacturer from a £40,000 loss
• Policies can cover door-to-door transportation and even warehouse storage in some cases
• Digital integration is improving insurance processes for both forwarders and cargo owners
To learn more about proper cargo insurance for your business, reach out to Innovate Insurance through the link below, or contact Freightbox for your freight forwarding needs.
🔗 Dylan Hart Cert CII 📞 Direct: 01527 864092📞 Office: 0121 448 6914
📧 Dylan.hart@coversure.co.uk 🌐 www.innovateinsurance.co.uk
🔗 #InnovateInsurance | #Coversure | @innovateinsurance
🔗 Freight Box Ltd📞 Office: 0121 516 1903 📧 sales@freightbox.co.uk
🌐 www.freightbox.co.uk🔗 #FreightBoxLtd | #FreightForwarding | @freightboxltd
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
Freight forwarding just got a whole lot smarter.
Welcome to Freight Box, thepodcast, where your cargo is our
priority and transforming yourbusiness is our mission.
From sea freight to air freight, we do it all and we do it
better.
We make logistics seamless,efficient and stress-free.
(00:21):
Subscribe now and let's takeyour business to the next level.
Speaker 2 (00:32):
Hello and welcome to another episode of Freightbox
Podcast.
My name is Amit Singh, I am theCEO of Freightbox and today's
guest is Dylan from InnovateDylan, how are you?
Speaker 3 (00:42):
Yeah, I'm good.
Thank you, Amit.
Thank you for having me onPleasure to be here.
Speaker 2 (00:45):
That's good to have you.
Thank you for taking the timeto come and see me today.
So, dylan, just tell me alittle bit about yourself and a
little bit about Innovate.
Speaker 3 (00:51):
Yeah, so my name's Dylan, I'm an account handler
over at Innovate and we are aspecialist insurance broker
mainly for the logistics andcargo industries, so
encompassing anything frominsurance requirements for
importers and exporters,warehouse keepers, freight
forwarders, freight agents andkind of anything that involves
freight movements as a whole.
Really.
Speaker 2 (01:11):
Oh, fantastic.
So you must be really busy atthis time of year, especially
what's happening globally andeverything that's happening
economy and wars and issues withthe Red Sea, the Gulf Sea, the
Suez Canal.
I guess you're probablyoverwhelmed with all the
workload you currently have.
Speaker 3 (01:21):
Yeah.
So we've had quite a lot of newinquiries from people checking
whether their current cover iscorrect that's sold elsewhere,
maybe not by a logistics broker,but then also from existing
clients, no query on is theircover correct?
And us taking the time readingthat policy documentation and
making sure that the activitiesthey are doing are covered by
the insurances they've got.
Speaker 2 (01:38):
Before we dive into all the details of today's
podcast, I just wanted to sharesome phenomenal statistics with
you.
I mean, the insurance industry,for one in Europe, is worth
over $3.5 billion as of 2025,which is absolutely phenomenal.
But saying that there was alatest BIFA report that came out
saying that 80% of freight thathas moved globally is either
(02:00):
underinsured or not insured atall, I mean that's a phenomenal
statistic, isn't it?
Speaker 3 (02:04):
Yeah, it's crazy, isn't it?
I mean, I think when you lookat the insurance for the
movement of goods, there's twoelements cover to consider.
You have the cargo insuranceand marine cargo insurance and
also the freight liability.
So for us it's just abouteducating customers and making
sure that they understand thedifferences and kind of
cross-references between the twoand making sure that they are
correctly insured for all of therisks that they have and the
(02:25):
exposures that come as that.
Speaker 2 (02:27):
Do you think it's an educational thing for customers
or do you think it's actually abehavioral issue that the
industry as a whole needs tochange with their customers?
Speaker 3 (02:36):
I think it's a combination of the two.
I think the insurance industryaway from cargo and freight
balls, so inclusive of that kindof gets painted in a bad light.
That you know they avoid claims, they're not paying out on
losses but actually that's notwhat they're there to do.
You know you have insuredpowers in your policy and kind
of.
Our job is to make sure you'reaware of what those powers are
and that you're protectedagainst them.
You know it's not for us.
We're not just trying to takepremiums and avoid claims.
(02:58):
We want to make sure thebusinesses are protected but
they understand what thatprotection is and how they are
paid out on the event of lossesI think you've hit the nail on
the head there.
Speaker 2 (03:07):
I think it's trying to understand the level of
protection they have, what theyactually are covered for, and,
from my personal point of viewand from my experience I have
interaction with not only my owncustomers, but from years of
experience I have interactingwith certain customers I think
it's a mindset from my point ofview, whereas a lot of the
customers are misunderstanding,that they are automatically
(03:28):
assuming they're already coveredwith the shipping lines, where
completely it's the completeopposite.
Speaker 3 (03:33):
Yeah, exactly that, and whether it's correct or it's
not correct, but if a shippingline was taken on that full
value responsibility for everysingle pound of cargo they moved
, their premium is going to beabsolutely massive, unaffordable
in one claim.
Are potentially a shipping line, uninsurable if they are
insuring that full value of thecargo, which is why you know
cargo and freight exists in theway that it does at the moment
(03:54):
oh, absolutely.
Speaker 2 (03:55):
I mean, if you look at a typical vessel six thousand
eight thousand teus you'relooking anything from half a
billion dollars upwards in termsof commercial value cargo on
there.
So yeah, completely understandpoint.
So, moving on to actualcoverage and having the correct
cover in place, what do yourecommend customers to do?
Speaker 3 (04:11):
So from you know if you're the owner of a cargo
there's any sort of financialresponsibility there.
But always recommend speakingto your current insurance broker
, reaching out to a specialistin the industry and making sure
that your cargo is fully insuredup to that commercial value and
you're not just relying on yourinsurancer to let you know
about the insurance risk,because that isn't their friend
better either.
You know they're specializingmoving the freight but the
(04:32):
insurance side is a wholedifferent ball game and having
that correct knowledge, you know, having the right contact and
insurance broker is absolutelymassive in understanding what
you know your exposures areabsolutely.
Speaker 2 (04:42):
I mean, I'm definitely for one for being
transparent and and beingbrutally honest with my
customers and for one for aforwarder.
Offering insurance is a goodthing, but also it could be a
bad thing, because forwardsdon't really understand their
customers, goods and level ofcoverage that actually is
required, whereas an insurancebroker, speaking directly to the
customer who owned the cargo, Ithink that's a different level
(05:02):
of conversation, different levelof transparency and different
level of understanding whatactual coverage is needed and
what actual coverage is notneeded yeah, 100.
Speaker 3 (05:10):
I think you know the cargo owners know their product
better than the freight border,the shipping line or you know
even the insurance broker does.
And if you're relying on yourfreight forward of trying to
guide you through that insurancelandscape, you know they aren't
the experts on it.
You know they, they specializein what they do.
But having that point ofcontact insurance broker is
essential, especially if you'removing kind of high-risk
commodities they're both lithium, batteries, anything that's
(05:32):
particularly theft, attractive,so wands or spirits.
They all warrant extraquestions that your freight
forwarder might not know to askand we'll just assume they're
covered.
But you, having that point ofcontact direct, you'll get asked
those questions and making surethat you know in the event of a
loss your policy is going torespond.
Speaker 2 (05:47):
In terms of level of coverage and having the right
level of coverage God, thatword's a very difficult word for
me to come out with what levelof coverage or different types
of coverage actually areavailable for customers.
Speaker 3 (05:58):
Yeah, so from a cargo perspective, there's three main
ones that you'll find withinthe UK.
So you have a single trip or afaculty of cargo, which is
whereby, on an ad hoc basis,shipment by shipment, you'll go
to your insurance broker orpotentially even through the
freight forwarder, and say I'vegot X amount of cargo going from
the UK to USA, how much is thepremium for that shipment?
So you ensure ad hoc, just forthat single shipment.
Speaker 2 (06:19):
Well, that's interesting, Dylan.
So I always presumed that ablanket coverage policy would
cover majority of what acustomer would be doing.
So are you saying that probablyisn't the right approach?
Speaker 3 (06:28):
Well, there's two types.
So the second type of insurance, the second main type, is the
annual blanket cover you'rereferring to.
So that's by a cargo owner willdeclare to us the annual
sendings for the year.
So when cover levels arefrequent, they're predictable.
You can easily forecast.
We can provide a blanket coverfor all shipment which removes
the admin of doing a and it alsoproduces a saving.
So on average, normally anannual cover compared to that of
(06:50):
a single trip.
If you were to take off all thesendings you'd probably save
about ten times the amount doingit annually.
So there are discounts providedfor that.
But I guess for some cargoimporters or exporters it's not
feasible.
They can't forecast that volumeand that's whereby the single
trip or even an open coverpolicy market into effect.
Speaker 2 (07:07):
Okay In terms of commodities that.
You touched on it slightly interms of lithium batteries.
I think that is starting tobecome a bit of a hot topic now,
especially with the recentvessel fires that we're seeing,
especially over the last twoyears or so.
So how does that coverage comeinto play now, and especially
with premiums on CERGcommodities?
Speaker 3 (07:25):
Yeah and again.
This all loops back to havingthe right cover in the first
place.
If you declare to yourinsurance broker that you are
moving lithium batteries, thatwill be factored into the policy
.
There'll be extra questionsasked, such as what charge
capacity do you ship at?
What risk mitigation is inplace to prevent these kind of
losses, and all of those extraquestions, so that when a claim
does arise, coverage isn't anissue because you already have
(07:46):
that built into the policy,right?
Speaker 2 (07:47):
okay, okay, but I'm just thinking from a standard
container cargo owner.
I would be thinking, well, I'mnot shipping lithium batteries,
I'll be fine.
I'm moving furniture, forexample, or textiles, and, yeah,
I'm okay with the standardpolicy, whereas I'm already
thinking in my back of my mindthat if a container next to my
general cargo, if you like, haslithium batteries, decides to
explode, that's how fires wouldspread on a vessel.
(08:10):
Poor old me is out of pocketbecause I'm not covered yeah,
and that's it.
Speaker 3 (08:13):
This is again one of the main benefits of a cargo
insurance policy.
It doesn't come out much pointof claim because you are talking
about the very large losseshere, which aren't that frequent
but there's.
You'll have coverage forgeneral average.
Yeah, if general average isdeclared on a vessel.
So you actually know all thosecosts are shared proportionally
by the owners cargo on that thatshare.
Okay, the freight forwardersfreight liability policy isn't
going to cover any generalaverage costs and if there isn't
(08:36):
cargo insurance and generalaverage is declared, you will
have to pay those costs.
So if you don't have thecorrect cargo insurance cover,
that's going to come straightout of your pocket, whereas by
having a single trip on annualcargo policy that is covered.
That's a peril that is covered.
Speaker 2 (08:49):
Okay, how about your cargo policy?
That is covered.
That's a peril, that is covered.
Okay, how about when containersare lost at sea?
I mean, this is quite frequentevent that happens, where you
see containers going overboard.
Are you actually covered on anypolicy with containers going
overboard?
Speaker 3 (09:01):
yeah, so you will be covered.
It depends on what institutecargo clause you're arranged on.
So, without getting tootechnical on the insurance side,
when you arrange a marine cargopolicy, you'll have institute
cargo clauses.
You have a, b and c anddepending on what, the commodity
, when you arrange a marinecargo policy, you'll have
institute cargo clauses.
You have A, b and C anddepending on what the commodity
is, destination, you'll be givenA, b or C clauses.
So on A, you'll be covered forvessels washing low, so
containers falling overboard,but B and C, those exclusions
(09:22):
are going to start to come in.
Speaker 2 (09:26):
OK, OK.
I always thought that they wereacts of God.
Yeah, in terms of the weatherand the storms and so forth
happens to vessels it, dependingon the type of cover you have.
Speaker 3 (09:32):
So you know there are what in the insurance industry
is a general market exclusion.
So wars and strikes um, theacts of god in herry, vice
delays they're all generalmarket exclusions.
But working with a specialistinsurance broker, if there is a
requirement for that to becovered, then we can approach
underwriters on your behalf andget that picked up.
Yeah, but it all.
You know, those extra riskscarry additional premium.
So it's how.
(09:52):
The whole purpose of insuranceis a risk transfer mechanism.
So you're paying your premiumsto transfer that risk to the
insurance company the benefitloss.
So it's how much risk do youwant to keep on yourself as a
company versus transfer to aninsurance company and pay the
premiums for doing that?
Speaker 2 (10:06):
I mean, you've kind of hit something that is such a
hot topic at the moment.
We we are living in a dangerousworld at the moment.
There is an active warhappening right now, not just
one, but several wars and acouple close to home.
How has that impacted theindustry right here, right now?
Speaker 3 (10:21):
Yeah, so we've had a lot of this, not even as a
direct result of conflict, butyou know diverting around the
Cape of Good Hope because itcan't go through the Red Sea If
conflict, um, but you knowdiverting around the cape of
good hope because it can't gothrough the red sea.
If we're talking about stuffwith a shelf life food stuffs
those delays have an effect onthe profit that that exporter is
then making.
But delays are normally astandard market exclusion with
insurance.
(10:41):
So because that wasn'tspecifically asked to be covered
, it was the standard exclusionthat isn't covered.
It's an impact of the war, thedelay, so there's an exclusion
on both fronts that appliesthere oh wow.
Speaker 2 (10:50):
So in laying terms for myself to understand that so
if war happened and it was notin my policy, I'm not covered.
Exactly that yeah.
Speaker 3 (10:56):
So wars is a general exclusion.
It can be covered.
But insurers will review thatcover kind of on a daily basis
of conflict worsen that war riskor that war element of cover
can be withdrawn with seven or48 days notice, depends on
what's written into the policy.
Speaker 2 (11:11):
But if I was an importer myself and I was
shipping several containers amonth, for a sake of a couple of
hundred pounds worth ofpremiums, I am covering myself
for hundreds of thousand poundsworth of stock, especially
what's happening now.
So could you give us a certainexample of coverage that a
customer's actually had thatdidn't have before has really
benefited them as a business?
Speaker 3 (11:30):
Yeah, so we arranged an annual cover.
It was only really recently aswell, and they manufacture
off-road mobility scooters, soall-terrain off-road mobility
scooters, and they ship themworldwide.
So I think they paid about 300pounds of that annual cargo
premium, so you know not a lotof money.
They had some rough handling atport.
It resulted in a 40 van losswow stock in the container.
The freight partner's liabilitywas calculated in the b4 terms.
(11:52):
I think the under the two sdrspecular worked out to be about
800 pounds for 40 grand of cargovalue okay so had that cargo
cover not been in place, there'sa 40 000 loss there, right, so
you know.
The cargo policy responded itpaid out of in four weeks and
then the insurer takes on thatrecovery against the freight
partner to try to recover whatthey can under whichever
(12:13):
conditions we use in that casebefore okay.
Speaker 2 (12:15):
So I guess they were quite relieved to have that that
policy in place.
Without getting too technical,there's cargo that moves from a
supplier let's just, for example, say, you know in lingbo or
shanghai that will then moveinto, let's say, southampton or
Felixstowe, into a UK port andthen it's moved on from the
actual port to a UK destination.
At what point does marineinsurance begin and end and what
(12:38):
point do they actually needadditional cover for that cargo
to be delivered to thecustomer's warehouse?
Speaker 3 (12:42):
so again, great question, aljet.
Um, it kind of depends on thecustomer's requirements and what
inco terms are being used andwhere that responsibility starts
and finish.
But if it it is X-Works andthere's something there, the
cover can be door-to-door.
It can even extend for storageat the warehouse.
On marine policy, it's not justtransit, it can be the storage
side as well.
Okay.
But if we focus on the transitside, there are some countries
where they're not going to wantto do the land transit if it's
(13:04):
particularly high-risk territory.
So we recently insured someaeroplane parts going to Israel.
We managed to get it up to theairport, but then the land
transits insurers wouldn't offercover on that.
So it's really flexibledepending on eco terms and what
those requirements for insuranceare.
Speaker 2 (13:19):
I mean look, insurance is not probably the
most exciting topic to discuss?
Speaker 3 (13:22):
I always have this conversation with customers.
I think it's one of thosethings.
No one wants to be on the phonefor 30 minutes talking about
insurance, but it's so prevalentit's going to save you so much
more time if there is a lossfurther down the line.
Speaker 2 (13:35):
I 100% agree with you .
I mean, we're all used togetting insurance for coverage
for our house, our car, our petinsurance.
When it comes down to cargoinsurance, it's just staggering
how many people just don't takeit out, thinking they're already
covered.
I think you're right.
It is down to a bit of bothbehavioral issues and
educational issues.
In terms of the insuranceindustry as a whole, what
changes have you actually seenover the last few years from
(13:58):
marine insurance, withforwarders and with customers?
Speaker 3 (14:01):
Yeah, so I think the way that the freight industry is
moving to kind of be moredigital and less onerous from a
paperwork side, we've definitelyseen that reflect in the
insurance space, especially whenwe look at kind of open cover
marine cargo certificate systems.
Yeah, so that's whereby aforwarder might they would offer
their customers insurance on ashipment by shipment basis.
Yeah, we have customers wherewe've directly integrated that
with their systems, so it isn'ta separate process to go on and
(14:24):
quote insurance.
It then from a staff trainingpoint of view at a forwarder as
well, it's not a whole newsystem they have to learn.
It's directly integrated.
The process flow is a lot moreseamless and, yeah, it's really
benefited them from that sort ofthings and the technical
judgments that they're making asa company also oh good, I'll
just look at my notes.
Speaker 2 (14:40):
So what sort of practical advice would you
actually give to customers thatreally want to start to
understand a bit more about howthey can get the right coverage
for their business?
Speaker 3 (14:49):
yeah, I mean definitely reach out to a
specialist insurance broker.
That's going to be kind ofoption number one.
It's the best option.
They're going to have theexpertise and be able to guide
you through that Kind of.
Aside from that is, ensureyou're not relying on the
forwarder to insure your goodsfor you.
That's not what their policy orwhat a freight policy is
designed to do.
It's that a freight policy isdesigned to protect the
carrier's legal liability totransport third-party goods,
(15:11):
which is massively different toinsure on the goods themselves.
So yeah, one, speak to aspecialist insurance broker and
two, don't assume that aforwarder is insuring your goods
for you.
Speaker 2 (15:19):
More like pick up the phone to yourself then Okay.
Well, dylan, listen.
I think we've covered somereally good hot topics here.
Obviously not in great detailas we would like to, but we
don't want to be here for hoursand hours on boring people about
certain topics that are notrelevant to their business.
But, however, how can peopleget in contact with them?
Speaker 3 (15:39):
yeah, so you can reach out to us at innovate
insurance.
I think there'll be a linkbelow there'll be a link below,
correct?
Yes, and we cover everythingfrom the marine cargo size, uk
road haulage, warehousing, anyoperations that encompass the
movement of goods.
We'll be able to assist,whether that's reviewing your
current policy documents tomaking sure you are adequately
insured or providing thequotation comparison quotes
against what you currently have.
Speaker 2 (15:59):
Fantastic, fantastic.
Well, please click the linkbelow if you want more
information on cargo insurancewith Dylan at Innovate.
As always, there's also a linkbelow for Freightbox.
Well, that's it for today'sepisode, I guess, Dylan.
So thank you for coming andhaving a chat with us today.
Hopefully we'll see you soon.
That and having a chat with ustoday.
Hopefully we'll see you soon.
That's it for today's episode.
Thank you for tuning in andremember, at Freightbox, your
(16:24):
cargo is always our priority.
Freight forwarding just got a whole lot smarter.
Welcome to Freight Box, thepodcast, where your cargo is our
priority and transforming yourbusiness is our mission.
From sea freight to air freight, we do it all and we do it
better.
We make logistics seamless,efficient and stress-free.
(00:21):
Subscribe now and let's takeyour business to the next level.
Speaker 2 (00:32):
Hello and welcome to another episode of Freightbox
Podcast.
My name is Amit Singh, I am theCEO of Freightbox and today's
guest is Dylan from InnovateDylan, how are you?
Speaker 3 (00:42):
Yeah, I'm good.
Thank you, Amit.
Thank you for having me onPleasure to be here.
Speaker 2 (00:45):
That's good to have you.
Thank you for taking the timeto come and see me today.
So, dylan, just tell me alittle bit about yourself and a
little bit about Innovate.
Speaker 3 (00:51):
Yeah, so my name's Dylan, I'm an account handler
over at Innovate and we are aspecialist insurance broker
mainly for the logistics andcargo industries, so
encompassing anything frominsurance requirements for
importers and exporters,warehouse keepers, freight
forwarders, freight agents andkind of anything that involves
freight movements as a whole.
Really.
Speaker 2 (01:11):
Oh, fantastic.
So you must be really busy atthis time of year, especially
what's happening globally andeverything that's happening
economy and wars and issues withthe Red Sea, the Gulf Sea, the
Suez Canal.
I guess you're probablyoverwhelmed with all the
workload you currently have.
Speaker 3 (01:21):
Yeah.
So we've had quite a lot of newinquiries from people checking
whether their current cover iscorrect that's sold elsewhere,
maybe not by a logistics broker,but then also from existing
clients, no query on is theircover correct?
And us taking the time readingthat policy documentation and
making sure that the activitiesthey are doing are covered by
the insurances they've got.
Speaker 2 (01:38):
Before we dive into all the details of today's
podcast, I just wanted to sharesome phenomenal statistics with
you.
I mean, the insurance industry,for one in Europe, is worth
over $3.5 billion as of 2025,which is absolutely phenomenal.
But saying that there was alatest BIFA report that came out
saying that 80% of freight thathas moved globally is either
(02:00):
underinsured or not insured atall, I mean that's a phenomenal
statistic, isn't it?
Speaker 3 (02:04):
Yeah, it's crazy, isn't it?
I mean, I think when you lookat the insurance for the
movement of goods, there's twoelements cover to consider.
You have the cargo insuranceand marine cargo insurance and
also the freight liability.
So for us it's just abouteducating customers and making
sure that they understand thedifferences and kind of
cross-references between the twoand making sure that they are
correctly insured for all of therisks that they have and the
(02:25):
exposures that come as that.
Speaker 2 (02:27):
Do you think it's an educational thing for customers
or do you think it's actually abehavioral issue that the
industry as a whole needs tochange with their customers?
Speaker 3 (02:36):
I think it's a combination of the two.
I think the insurance industryaway from cargo and freight
balls, so inclusive of that kindof gets painted in a bad light.
That you know they avoid claims, they're not paying out on
losses but actually that's notwhat they're there to do.
You know you have insuredpowers in your policy and kind
of.
Our job is to make sure you'reaware of what those powers are
and that you're protectedagainst them.
You know it's not for us.
We're not just trying to takepremiums and avoid claims.
(02:58):
We want to make sure thebusinesses are protected but
they understand what thatprotection is and how they are
paid out on the event of lossesI think you've hit the nail on
the head there.
Speaker 2 (03:07):
I think it's trying to understand the level of
protection they have, what theyactually are covered for, and,
from my personal point of viewand from my experience I have
interaction with not only my owncustomers, but from years of
experience I have interactingwith certain customers I think
it's a mindset from my point ofview, whereas a lot of the
customers are misunderstanding,that they are automatically
(03:28):
assuming they're already coveredwith the shipping lines, where
completely it's the completeopposite.
Speaker 3 (03:33):
Yeah, exactly that, and whether it's correct or it's
not correct, but if a shippingline was taken on that full
value responsibility for everysingle pound of cargo they moved
, their premium is going to beabsolutely massive, unaffordable
in one claim.
Are potentially a shipping line, uninsurable if they are
insuring that full value of thecargo, which is why you know
cargo and freight exists in theway that it does at the moment
(03:54):
oh, absolutely.
Speaker 2 (03:55):
I mean, if you look at a typical vessel six thousand
eight thousand teus you'relooking anything from half a
billion dollars upwards in termsof commercial value cargo on
there.
So yeah, completely understandpoint.
So, moving on to actualcoverage and having the correct
cover in place, what do yourecommend customers to do?
Speaker 3 (04:11):
So from you know if you're the owner of a cargo
there's any sort of financialresponsibility there.
But always recommend speakingto your current insurance broker
, reaching out to a specialistin the industry and making sure
that your cargo is fully insuredup to that commercial value and
you're not just relying on yourinsurancer to let you know
about the insurance risk,because that isn't their friend
better either.
You know they're specializingmoving the freight but the
(04:32):
insurance side is a wholedifferent ball game and having
that correct knowledge, you know, having the right contact and
insurance broker is absolutelymassive in understanding what
you know your exposures areabsolutely.
Speaker 2 (04:42):
I mean, I'm definitely for one for being
transparent and and beingbrutally honest with my
customers and for one for aforwarder.
Offering insurance is a goodthing, but also it could be a
bad thing, because forwardsdon't really understand their
customers, goods and level ofcoverage that actually is
required, whereas an insurancebroker, speaking directly to the
customer who owned the cargo, Ithink that's a different level
(05:02):
of conversation, different levelof transparency and different
level of understanding whatactual coverage is needed and
what actual coverage is notneeded yeah, 100.
Speaker 3 (05:10):
I think you know the cargo owners know their product
better than the freight border,the shipping line or you know
even the insurance broker does.
And if you're relying on yourfreight forward of trying to
guide you through that insurancelandscape, you know they aren't
the experts on it.
You know they, they specializein what they do.
But having that point ofcontact insurance broker is
essential, especially if you'removing kind of high-risk
commodities they're both lithium, batteries, anything that's
(05:32):
particularly theft, attractive,so wands or spirits.
They all warrant extraquestions that your freight
forwarder might not know to askand we'll just assume they're
covered.
But you, having that point ofcontact direct, you'll get asked
those questions and making surethat you know in the event of a
loss your policy is going torespond.
Speaker 2 (05:47):
In terms of level of coverage and having the right
level of coverage God, thatword's a very difficult word for
me to come out with what levelof coverage or different types
of coverage actually areavailable for customers.
Speaker 3 (05:58):
Yeah, so from a cargo perspective, there's three main
ones that you'll find withinthe UK.
So you have a single trip or afaculty of cargo, which is
whereby, on an ad hoc basis,shipment by shipment, you'll go
to your insurance broker orpotentially even through the
freight forwarder, and say I'vegot X amount of cargo going from
the UK to USA, how much is thepremium for that shipment?
So you ensure ad hoc, just forthat single shipment.
Speaker 2 (06:19):
Well, that's interesting, Dylan.
So I always presumed that ablanket coverage policy would
cover majority of what acustomer would be doing.
So are you saying that probablyisn't the right approach?
Speaker 3 (06:28):
Well, there's two types.
So the second type of insurance, the second main type, is the
annual blanket cover you'rereferring to.
So that's by a cargo owner willdeclare to us the annual
sendings for the year.
So when cover levels arefrequent, they're predictable.
You can easily forecast.
We can provide a blanket coverfor all shipment which removes
the admin of doing a and it alsoproduces a saving.
So on average, normally anannual cover compared to that of
(06:50):
a single trip.
If you were to take off all thesendings you'd probably save
about ten times the amount doingit annually.
So there are discounts providedfor that.
But I guess for some cargoimporters or exporters it's not
feasible.
They can't forecast that volumeand that's whereby the single
trip or even an open coverpolicy market into effect.
Speaker 2 (07:07):
Okay In terms of commodities that.
You touched on it slightly interms of lithium batteries.
I think that is starting tobecome a bit of a hot topic now,
especially with the recentvessel fires that we're seeing,
especially over the last twoyears or so.
So how does that coverage comeinto play now, and especially
with premiums on CERGcommodities?
Speaker 3 (07:25):
Yeah and again.
This all loops back to havingthe right cover in the first
place.
If you declare to yourinsurance broker that you are
moving lithium batteries, thatwill be factored into the policy
.
There'll be extra questionsasked, such as what charge
capacity do you ship at?
What risk mitigation is inplace to prevent these kind of
losses, and all of those extraquestions, so that when a claim
does arise, coverage isn't anissue because you already have
(07:46):
that built into the policy,right?
Speaker 2 (07:47):
okay, okay, but I'm just thinking from a standard
container cargo owner.
I would be thinking, well, I'mnot shipping lithium batteries,
I'll be fine.
I'm moving furniture, forexample, or textiles, and, yeah,
I'm okay with the standardpolicy, whereas I'm already
thinking in my back of my mindthat if a container next to my
general cargo, if you like, haslithium batteries, decides to
explode, that's how fires wouldspread on a vessel.
(08:10):
Poor old me is out of pocketbecause I'm not covered yeah,
and that's it.
Speaker 3 (08:13):
This is again one of the main benefits of a cargo
insurance policy.
It doesn't come out much pointof claim because you are talking
about the very large losseshere, which aren't that frequent
but there's.
You'll have coverage forgeneral average.
Yeah, if general average isdeclared on a vessel.
So you actually know all thosecosts are shared proportionally
by the owners cargo on that thatshare.
Okay, the freight forwardersfreight liability policy isn't
going to cover any generalaverage costs and if there isn't
(08:36):
cargo insurance and generalaverage is declared, you will
have to pay those costs.
So if you don't have thecorrect cargo insurance cover,
that's going to come straightout of your pocket, whereas by
having a single trip on annualcargo policy that is covered.
That's a peril that is covered.
Speaker 2 (08:49):
Okay, how about your cargo policy?
That is covered.
That's a peril, that is covered.
Okay, how about when containersare lost at sea?
I mean, this is quite frequentevent that happens, where you
see containers going overboard.
Are you actually covered on anypolicy with containers going
overboard?
Speaker 3 (09:01):
yeah, so you will be covered.
It depends on what institutecargo clause you're arranged on.
So, without getting tootechnical on the insurance side,
when you arrange a marine cargopolicy, you'll have institute
cargo clauses.
You have a, b and c anddepending on what, the commodity
, when you arrange a marinecargo policy, you'll have
institute cargo clauses.
You have A, b and C anddepending on what the commodity
is, destination, you'll be givenA, b or C clauses.
So on A, you'll be covered forvessels washing low, so
containers falling overboard,but B and C, those exclusions
(09:22):
are going to start to come in.
Speaker 2 (09:26):
OK, OK.
I always thought that they wereacts of God.
Yeah, in terms of the weatherand the storms and so forth
happens to vessels it, dependingon the type of cover you have.
Speaker 3 (09:32):
So you know there are what in the insurance industry
is a general market exclusion.
So wars and strikes um, theacts of god in herry, vice
delays they're all generalmarket exclusions.
But working with a specialistinsurance broker, if there is a
requirement for that to becovered, then we can approach
underwriters on your behalf andget that picked up.
Yeah, but it all.
You know, those extra riskscarry additional premium.
So it's how.
(09:52):
The whole purpose of insuranceis a risk transfer mechanism.
So you're paying your premiumsto transfer that risk to the
insurance company the benefitloss.
So it's how much risk do youwant to keep on yourself as a
company versus transfer to aninsurance company and pay the
premiums for doing that?
Speaker 2 (10:06):
I mean, you've kind of hit something that is such a
hot topic at the moment.
We we are living in a dangerousworld at the moment.
There is an active warhappening right now, not just
one, but several wars and acouple close to home.
How has that impacted theindustry right here, right now?
Speaker 3 (10:21):
Yeah, so we've had a lot of this, not even as a
direct result of conflict, butyou know diverting around the
Cape of Good Hope because itcan't go through the Red Sea If
conflict, um, but you knowdiverting around the cape of
good hope because it can't gothrough the red sea.
If we're talking about stuffwith a shelf life food stuffs
those delays have an effect onthe profit that that exporter is
then making.
But delays are normally astandard market exclusion with
insurance.
(10:41):
So because that wasn'tspecifically asked to be covered
, it was the standard exclusionthat isn't covered.
It's an impact of the war, thedelay, so there's an exclusion
on both fronts that appliesthere oh wow.
Speaker 2 (10:50):
So in laying terms for myself to understand that so
if war happened and it was notin my policy, I'm not covered.
Exactly that yeah.
Speaker 3 (10:56):
So wars is a general exclusion.
It can be covered.
But insurers will review thatcover kind of on a daily basis
of conflict worsen that war riskor that war element of cover
can be withdrawn with seven or48 days notice, depends on
what's written into the policy.
Speaker 2 (11:11):
But if I was an importer myself and I was
shipping several containers amonth, for a sake of a couple of
hundred pounds worth ofpremiums, I am covering myself
for hundreds of thousand poundsworth of stock, especially
what's happening now.
So could you give us a certainexample of coverage that a
customer's actually had thatdidn't have before has really
benefited them as a business?
Speaker 3 (11:30):
Yeah, so we arranged an annual cover.
It was only really recently aswell, and they manufacture
off-road mobility scooters, soall-terrain off-road mobility
scooters, and they ship themworldwide.
So I think they paid about 300pounds of that annual cargo
premium, so you know not a lotof money.
They had some rough handling atport.
It resulted in a 40 van losswow stock in the container.
The freight partner's liabilitywas calculated in the b4 terms.
(11:52):
I think the under the two sdrspecular worked out to be about
800 pounds for 40 grand of cargovalue okay so had that cargo
cover not been in place, there'sa 40 000 loss there, right, so
you know.
The cargo policy responded itpaid out of in four weeks and
then the insurer takes on thatrecovery against the freight
partner to try to recover whatthey can under whichever
(12:13):
conditions we use in that casebefore okay.
Speaker 2 (12:15):
So I guess they were quite relieved to have that that
policy in place.
Without getting too technical,there's cargo that moves from a
supplier let's just, for example, say, you know in lingbo or
shanghai that will then moveinto, let's say, southampton or
Felixstowe, into a UK port andthen it's moved on from the
actual port to a UK destination.
At what point does marineinsurance begin and end and what
(12:38):
point do they actually needadditional cover for that cargo
to be delivered to thecustomer's warehouse?
Speaker 3 (12:42):
so again, great question, aljet.
Um, it kind of depends on thecustomer's requirements and what
inco terms are being used andwhere that responsibility starts
and finish.
But if it it is X-Works andthere's something there, the
cover can be door-to-door.
It can even extend for storageat the warehouse.
On marine policy, it's not justtransit, it can be the storage
side as well.
Okay.
But if we focus on the transitside, there are some countries
where they're not going to wantto do the land transit if it's
(13:04):
particularly high-risk territory.
So we recently insured someaeroplane parts going to Israel.
We managed to get it up to theairport, but then the land
transits insurers wouldn't offercover on that.
So it's really flexibledepending on eco terms and what
those requirements for insuranceare.
Speaker 2 (13:19):
I mean look, insurance is not probably the
most exciting topic to discuss?
Speaker 3 (13:22):
I always have this conversation with customers.
I think it's one of thosethings.
No one wants to be on the phonefor 30 minutes talking about
insurance, but it's so prevalentit's going to save you so much
more time if there is a lossfurther down the line.
Speaker 2 (13:35):
I 100% agree with you .
I mean, we're all used togetting insurance for coverage
for our house, our car, our petinsurance.
When it comes down to cargoinsurance, it's just staggering
how many people just don't takeit out, thinking they're already
covered.
I think you're right.
It is down to a bit of bothbehavioral issues and
educational issues.
In terms of the insuranceindustry as a whole, what
changes have you actually seenover the last few years from
(13:58):
marine insurance, withforwarders and with customers?
Speaker 3 (14:01):
Yeah, so I think the way that the freight industry is
moving to kind of be moredigital and less onerous from a
paperwork side, we've definitelyseen that reflect in the
insurance space, especially whenwe look at kind of open cover
marine cargo certificate systems.
Yeah, so that's whereby aforwarder might they would offer
their customers insurance on ashipment by shipment basis.
Yeah, we have customers wherewe've directly integrated that
with their systems, so it isn'ta separate process to go on and
(14:24):
quote insurance.
It then from a staff trainingpoint of view at a forwarder as
well, it's not a whole newsystem they have to learn.
It's directly integrated.
The process flow is a lot moreseamless and, yeah, it's really
benefited them from that sort ofthings and the technical
judgments that they're making asa company also oh good, I'll
just look at my notes.
Speaker 2 (14:40):
So what sort of practical advice would you
actually give to customers thatreally want to start to
understand a bit more about howthey can get the right coverage
for their business?
Speaker 3 (14:49):
yeah, I mean definitely reach out to a
specialist insurance broker.
That's going to be kind ofoption number one.
It's the best option.
They're going to have theexpertise and be able to guide
you through that Kind of.
Aside from that is, ensureyou're not relying on the
forwarder to insure your goodsfor you.
That's not what their policy orwhat a freight policy is
designed to do.
It's that a freight policy isdesigned to protect the
carrier's legal liability totransport third-party goods,
(15:11):
which is massively different toinsure on the goods themselves.
So yeah, one, speak to aspecialist insurance broker and
two, don't assume that aforwarder is insuring your goods
for you.
Speaker 2 (15:19):
More like pick up the phone to yourself then Okay.
Well, dylan, listen.
I think we've covered somereally good hot topics here.
Obviously not in great detailas we would like to, but we
don't want to be here for hoursand hours on boring people about
certain topics that are notrelevant to their business.
But, however, how can peopleget in contact with them?
Speaker 3 (15:39):
yeah, so you can reach out to us at innovate
insurance.
I think there'll be a linkbelow there'll be a link below,
correct?
Yes, and we cover everythingfrom the marine cargo size, uk
road haulage, warehousing, anyoperations that encompass the
movement of goods.
We'll be able to assist,whether that's reviewing your
current policy documents tomaking sure you are adequately
insured or providing thequotation comparison quotes
against what you currently have.
Speaker 2 (15:59):
Fantastic, fantastic.
Well, please click the linkbelow if you want more
information on cargo insurancewith Dylan at Innovate.
As always, there's also a linkbelow for Freightbox.
Well, that's it for today'sepisode, I guess, Dylan.
So thank you for coming andhaving a chat with us today.
Hopefully we'll see you soon.
That and having a chat with ustoday.
Hopefully we'll see you soon.
That's it for today's episode.
Thank you for tuning in andremember, at Freightbox, your
(16:24):
cargo is always our priority.
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