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What Logistics Insurance Covers
Logistics insurance covers goods on the move, goods in storage, the vehicles that carry them and the liability of a business that imports, exports, stores, forwards or delivers: import and export traders, international supply chain businesses, warehousing and logistics operators, freight and transport companies, and shipping and air freight forwarders.
Goods are damaged, lost or stolen in transit or during loading. A container moves in heavy weather and the furniture inside arrives broken. A truck is broken into between the port and the warehouse. Stock on the racking burns or is stolen. A delivery vehicle hits another car and injures someone. And an imported product that injures a customer brings a products liability claim to the importer, not the overseas maker.
Carriers limit their own liability under their conditions of carriage, so relying on the freight company leaves a real gap, and the sale contract's trade terms decide where risk passes between buyer and seller. Under the Australian Consumer Law an importer is treated as the manufacturer when the maker has no presence here. A warehouse fire also stops the operation, which is what business interruption insurance answers.
Fortis Risk Solutions arranges logistics insurance for trade and transport businesses across Australia from offices in Box Hill and Hawthorn, as part of our business insurance range. We map each leg of the journey and each place the goods sit, then insure them where the risk actually is. Cargo starts with marine insurance, storage with warehouse insurance and the fleet with commercial motor insurance.
Who this covers
Where you sit in the chain decides what you insure. The notes below set out each type of business.
Import and export businesses
Goods bought overseas and sold here, or the reverse. Marine cargo door to door, products liability for imported goods under the Australian Consumer Law, stock cover for the weeks a shipment takes, and the sale contract terms read before the policy is placed.
International trade and supply chain
Several suppliers, several countries and goods that change hands in transit. Cargo cover for every leg, trade credit for receivables where needed, and contingent business interruption for a supplier failure that stops your own sales.
Warehousing and logistics
Storing and handling other people’s goods. Property for the building and racking, a bailee extension for customers’ goods, business interruption, and the warehouse operator’s liability under its own trading conditions. See the warehouse insurance page.
Freight and transport
Trucks on the road every day. Commercial motor, downtime cover, carriers liability for the goods carried and public liability for loading and unloading, with the accident record and driver management driving the fleet rating.
Shipping and freight forwarders
Arranging carriage rather than performing it. Freight forwarders liability for documentation, release and deadline errors under the forwarder’s trading conditions, and cargo cover for goods the forwarder has agreed to insure. See the marine insurance page.
Logistics Insurance: Cover Sections and Benefits
Logistics Insurance FAQs
It depends on which part of the chain you own. A transporter needs commercial motor, carriers liability and public liability insurance. A warehouse operator needs property cover for the building and racking, a bailee section for customers' goods and business interruption. An importer needs marine cargo door to door and products liability for what it sells. Most logistics businesses hold several of these inside one business insurance package.
No. Despite the name, marine cargo insurance covers goods in transit by sea, air, road and rail, and can run door to door from the supplier's warehouse overseas to your customer in Australia. The policy can include theft, delay in certain cases and the inland legs at either end. What matters is the terms of sale, because they decide which leg is your risk to insure.
Not automatically. Your own stock section does not include goods you hold for other people, and liability wordings commonly exclude property in your care, custody and control. A bailee extension insures third party goods up to a limit set on the highest value you hold at any one time, which is usually just before a peak season, not the average month.
A forwarder arranges carriage rather than performing all of it, so its exposure is professional: wrong documents, missed deadlines, goods released against the wrong instructions, and liability under its own trading conditions. Freight forwarders liability cover answers that, alongside cargo cover for goods it has agreed to insure. The trading conditions have to be issued and accepted, or the limits in them do not apply.
For a fleet that is on the road almost every day, usually yes. Commercial motor pays to repair the truck; downtime cover pays for the income lost while it is in the workshop. A transport operator with twenty prime movers and three accidents in a year can lose tens of thousands of dollars in revenue that way. The cover is priced per vehicle and is a standard addition for working fleets.
Transport and trade wordings turn on the detail: terms of sale, conditions of carriage, bailee limits, theft from unattended vehicles and the territorial limits of each policy. FRS helps you disclose the chain accurately, insure each leg once and only once, compare specialist marine and transport insurers and act as your advocate at claim time, including the recovery against the carrier at fault.
Related pages
Related industry groups: Transport and Automotive Insurance, Factory and Manufacturing Insurance, Retail and Consumer Insurance
Talk to a broker about Trade and Logistics Insurance
Call 03 7046 3766 on weekdays between 9:30am and 6pm, email admin@fortisrisksolutions.com.au, or send an enquiry and a broker from our Box Hill or Hawthorn office will come back to you about trade and logistics insurance. Tell us what the business does and what the lease or contract asks for, and we take it from there.