Liability is an ever-present concern in the logistics industry, where complexities in transportation, warehousing, and cargo handling expose companies to significant risks. From accidents to mismanagement of goods, liability issues can disrupt operations and strain financial resources. Companies welcome proactive insurance brokers who get to know a cargo owner’s entire supply chain in order to provide not just the best options, but also make better emissaries for, and customers of, the broker, when it comes to seeking coverages. 

Common Liability Issues in Logistics

Liability in logistics often stems from accidents involving vehicles or equipment, damage to cargo, and delays or errors in the supply chain. For example, warehouse accidents such as forklift mishaps or improper stacking can lead to injuries and damaged goods. Similarly, transportation incidents involving road collisions or improper cargo securement can expose companies to costly claims.

Cargo theft is another growing concern, particularly for high-value and easily fenceable goods. Whether in transit or at rest in storage facilities, theft exposes logistics providers to both financial and reputational risks.

Where Arete Sees Opportunities for Improvement 

Based on the claims which we receive, they can be put into a handful of categories, all of which have room for improvement through better communication, better documenting of processes and knowing where the line is between making a customer happy and creating jeopardy for the insurer and/or their broker. 

1. Accident Prevention: Ensure proper initial and recurrent training for employees handling cargo, operating equipment, and driving vehicles. Implement regular safety inspections and maintain equipment to reduce the risk of malfunctions.
2. Contractual Clarity: Clearly define liability responsibilities in contracts with clients, carriers, and suppliers. Ensure that insurance policies cover potential gaps in liability exposure. Perhaps most importantly, do not enter into a contractual agreement that involves redlining and altering your standard terms and conditions without securing the approval of your insurer first. 
3. Technology Integration: Utilize passive and active tracking and monitoring systems to maintain visibility over shipments and mitigate delays, theft, or mismanagement risks.
4. Compliance Adherence: Stay updated on industry regulations and ensure compliance with safety and environmental standards to minimize legal exposure.

Insurance Brokers Can Reduce Liability 

Insurance brokers are the first line of defense for the insured and the forwarders seeking coverage on their behalf. At Arete, we have the data to support their efforts to present solutions based on a deep history of the nature and types of claims we have been nominated to handle. They are the professionals in the relationship with their insured. As professionals, they are as much the subject matter experts on liability reduction as their customers are on best routes or customs classifications. 

Arete is pleased to support our customers in ways that are appropriate to our role in the insurance industry and have built up a deep roster of talented individuals and organizations to direct our customers for greater or more specific help if and when the need arises. 

Insurance as a Safety Net

Insurance is a critical component of any risk management strategy. Tailored coverage mitigates financial losses from accidents, theft, or delays. Your insurance broker can guide companies in structuring insurance policies that align with your operational risks, providing a safety net against unforeseen events.

By taking a proactive approach to liability, logistics companies and their insurers can reduce risks, protect their assets, and maintain a competitive edge in a demanding industry. Contact us today to discuss liability risks in logistics and how you may be able to get ahead of the curve.