Navigating your insurance policy, limitations, exclusions and understanding whether you have found the best policy for your business and exposures isn’t an easy task. For some Freight Forwarders and Customs Brokers, many rely on a standard Liability or Business Pack insurance policy. Whilst this does provide some basic level of cover, many Freight Forwarders and Customs Brokers will find they are not adequately insured for the duties and tasks they undertake on a daily basis.
Unfortunately, these businesses often find out when it comes time to make an insurance claim and they realise they don’t have the right level of cover. Therefore, we have highlighted the key differences between generic business policies and taking out a Freight Forwarders Liability insurance policy with Citycover. We recommend accessing a copy of your current policy wordings to check how adequate your Insurance coverage is when comparing to the below.
Are you a Freight Forwarder with a Business Pack Insurance Policy?
Unfortunately, Business Pack insurance policies (also known as General Liability policies) are often mistakenly purchased by Freight Forwarders. This type of policy can be more affordable however only protects the insured from general business risks. However, Freight Forwarding isn’t what we at Citycover classify as a ‘typical business’. It is a unique and complex industry requiring tailored and specific “Freight Forwarders” Liability Insurance, to cover the typical risks a Freight Forwarder faces due to strict industry requirements. A standard Business Pack insurance policy is therefore tailored for small businesses such as cafes, retail and startups.
Do you rely on a Professional Indemnity Policy?
Along with General Liability policies, we have encountered several Freight Forwarders and Customs Brokers facing the consequences of not being adequately insured. Professional Indemnity policies are tailored for professions such as Lawyers, Accountants, Engineers, Marketing specialists and Customs Brokers & Freight Forwarders. This type of policy allows Insureds to pursue legal avenues to clear a business’s name or reputation, and will also cover costs if a client suffers a loss due to incorrect advice. However, Professional Indemnity policies don’t cover a Freight Forwarder or Customs Brokers full business exposures, such as losses that may occur due to industry fines and/or penalties.
How does a Freight Forwarders Liability Insurance policy cover you at Citycover?
With over 45 years of experience, we understand Freight Forwarders and Customs Brokers. We know how the industry operates, your business needs, and the common risks and exposures. Consequently, we have worked alongside an Insurer to create a market leading Freight Forwarders Liability Insurance policy to ensure these businesses are protected when they need it most. This tailored policy aims to include insurance cover found in a Business Pack and Professional Indemnity policy, with added features and benefits unique to the exposures found in the Freight Forwarding industry.
What cover can be found in a Business Pack Insurance policy?
- Third-party liability for property damage and consequential loss (as an office risk and this does not apply to cargo being moved by you);
- Pollution liability, including compensation or expenses relating to a pollution incident;
- Tenant’s liability, compensation to a third party for damage to a premise;
- Infringement of personal rights liability;
- Products liability (physical products your business sells), providing compensation to a customer; and
- Advertising injury liability, compensation for a customer regarding advertising injuries.
What cover can be found in a Professional Indemnity Insurance policy?
- Errors and omissions, financial or consequential loss to a customer due to a wrongful, delayed or demurrage of cargo;
- Infringement of personal rights liability; and
- Consultancy services liability, compensation for a customer for financial loss arising from incorrect advice.
The extra coverage provided by a Freight Forwarders Liability Policy at Citycover:
The following features and benefits are covered by a Freight Forwarders Liability Insurance cover available through Citycover. Often Freight Forwarders and Customs Brokers don’t know this cover is available, or it can be overlooked when it comes to a Business Pack and Professional Indemnity policy. These are key areas of coverage below that minimize your current business exposures.
This section aims to extend the liability of a typical Business Pack policy and includes liability protection for the customer regarding the loss or damage to cargo. It also covers consequential loss resulting from loss or damage, as well as contractual liability. Contractual liability is based on the clients terms and conditions (T&C’s) or any specific contract that is agreed by the Insurer.
Fines, Penalties and Infringement Notices
Whilst Business Pack and Professional Indemnity insurance policies cover losses, it is a unique feature of a Freight Forwarders Liability Insurance policy to include these financial burdens. Freight Forwarders and Customs Brokers often come into contact with Border Authorities, and over the course of business, they will likely need to deal with fines, penalties and infringement notices issued. Unlike other policies, a Freight Forwarders Liability Insurance policy also covers the Chain of Responsibility, including heavy vehicle infringements.
Approved Costs and Expenses
Freight Forwarders and Customs Brokers can seek the coverage of specific costs and expenses, such as disposing cargo and removing debris following an occurrence. Additionally, this policy wording covers fumigation or disinfection of cargo, watercraft, rolling stock, containers or equipment concerning legal obligations surrounding quarantine.
Furthermore, the policy covers the Freight Forwarder or Customs Broker’s costs of redirecting cargo to the correct destination after it has been misdirected. When a consignee fails to collect cargo or remove abandoned cargo at the place of delivery, this section will assist in the coverage of additional costs. Freight Forwarders and Customs Brokers will also be able to recover costs for the general average or salvage for which they are liable for, and unable to recover from their customers.
Customs Duty Liability
This section provides that the liability of unpaid cargo duty is limited, to comply with the Customs Act 1901 (Cth).
Custody of Goods Liability
Where the insured is entrusted with the possession, custody or control of cargo and becomes liable for payment, this will be limited to comply with the Customs Act 1901 (Cth).
Customs Broker Investigation Costs and Expenses
Under this policy, Freight Forwarders and Customs Brokers will be covered for legal, investigation or mitigation costs which have been reasonably incurred due to avoiding the suspension or revocation of their licence by a Border Authority.
What are your next steps?
Don’t wait until it’s too late. If you would like your policies reviewed to understand what gaps in cover you may have, if you have any questions, would like to take out a Freight Forwarders Liability Insurance policy, or would like to further understand Citycover’s additional coverage benefits, please contact Citycover Insurance Brokers on (07) 3270 1500.
Please note: This article is for information purposes only and does not take into account your personal situation or needs. Contact Citycover for advice.