Cargo & stock throughput insurance is an all-risks based coverage for physical loss or damage to goods / inventory whilst at the insured’s risk anywhere in the global supply chain, including transit by air, land or sea. It offers seamless protection under a single policy.
Stock throughput insurance explained
Who can benefit?
Any business that owns, or is responsible for, goods in transit or in storage at any point in the supply chain could benefit from having STP cover. Examples include manufacturers, distributors, traders in a variety of industries including retail, food & beverage, oil a& gas, auto and aviation to name only a few!What are the benefits?
Seamless protection
Enhanced peace of mind knowing that a single policy covers the entire supply chain. This means there are no gaps in continuity of coverage, avoiding possible claim disputes that can arise with having multiple policies with different insurance carriers.
Example: Some insureds have a separate ocean marine and inland marine policy, with their inventory covered under a property policy. Consolidating coverage into a single policy gives certainty of cover and economies of scale for a policyholder’s supply chain insurance.
Tailored coverage
STP provides tailored coverage to suit the insured’s supply chain, the nature of the insured goods and the insured’s exposure profile which would otherwise be lost in generic policy wordings.
Example: Use of a tailored control of damaged goods clause, which is especially important for FDA controlled goods. Ensuring temperature variation and spoilage cover for perishable goods. Difference in Conditions / Difference in Limits cover on transits where freight forwarders or third party logistics suppliers are involved and typically have restricted insurance in place.
Basis of valuation
Providing flexible and clear basis of valuations helps to tailor the policy to meet the needs of the insured, such as building in loss of profit by valuing at the selling price.
Reduced administration
One policy reduces administration and management time which can arise when handling several policies with different excess/deductibles, conditions, premiums and insurers.
Competitive pricing - in the hardening market
STP rates remain competitive against property rating in the hardening market, particularly for CAT exposure. In full premium or premium adjustable at expiry available.
Profit commission (PC)
PC payable back to the insured based on the annual performance of the insurance policy. PCs are rarely available on a property policy.
Catastrophe appetite
The subscription market allows underwriters to offer full policy limits for CAT exposures, with each peril (Wind, Flood and Quake) separately aggregated.
Success story: A large multi-national retail company with USD200m in store could only obtain a USD5m CAT sub-limit on their property policy. We arranged full catastrophe limits for the insured, which was also in a high flood zone.
Better deductibles
Typically, lower all risk and CAT deductibles than property policies. Also, CAT deductibles presented in dollar terms rather than as a percentage, giving the insured certainty of costs in the event of a claim.
Increased marketing options
Access to both property and marine carriers, meaning far more options available to obtain quotes. These are two distinct markets and by splitting inventory from property values, this lowers the overall limits required on the property policy, meaning less capacity will be needed. This can be especially useful on challenging property placements.
Success story: With over 50 carriers writing STP in London, Miller was able to secure a comprehensive STP solution, including the inventory. This helped to reduce the
limits needed for the property policy.
Loss record
Cargo / property loss records are kept separately, so a claim on one does not adversely affect the other.
