Are your bases covered?

“Trucks are the lifeline of the South African economy.” This statement was reaffirmed during the national lockdown, as hauliers had us covered by delivering essential goods. But the coronavirus is just one of many risks they face …

Damage of goods during transport and loss due to accident, theft or hijacking are just some of the additional risks transport operators face while delivering their essential services.

The Hollard Insurance Group – one of the largest privately owned insurance groups in South Africa, which offers short-term and life insurance as well as investment products – reaffirms the importance of this industry and the coverage it needs (on its website): “Remove trucking from South Africa’s logistical infrastructure and our access to many of the consumer goods we take for granted – such as fresh food, fuel and electronics – would be severely hampered.

“Trucking plays a central role in our national distribution network and has specific motor insurance needs that cannot be effectively addressed by standard motor policies.”

The road safety information portal Arrive Alive emphasises this point: “It is important to recognise that fleet managers and logistics companies have unique needs and are confronted by some rather unique threats and risks as well! These businesses also have specialised insurance requirements.”

It adds that whether a business requires commercial vehicle insurance for light or medium vehicles, or heavy-duty truck insurance, it is important to consult with the right insurer to ensure that the business gets the optimum level of vehicle cover.

“Heavy commercial vehicle insurance requires that the insurer understands the operational demands of operating several heavy-duty trucks and commercial vehicles,” it notes.

“Businesses operating in the transport industry that deploy vehicles to an especially far-reaching and intensive degree need an insurer that appreciates the unique risks faced by the transport industry, in order to receive truck insurance that meets the peculiar demands of extensively operating heavy vehicles.”

Heavy commercial vehicles travel great distances, it continues, often crossing borders into Africa. “It may, therefore, be important that your truck insurance provider offers commercial vehicle insurance with expansive territorial limits so that trucks and other fleet vehicles can cross borders as necessary without complication.

“As fleet insurance covers vehicles used for transporting goods, it often includes cover for cargo while in transit. This, though, depends on the insurer. Otherwise, stock insurance can be added to the business insurance portfolio, which covers cargo while in transit and storage under the protection of the logistics company.”

You might need a marine policy – even on dry land

Aon South Africa, a risk advisory and insurance brokerage firm, states that a “goods in transit” policy typically covers:

• Loss of goods during transit as a result of an accident;

• Theft or hijacking of goods during transit; and

• Damage caused due to transit.

“Goods in transit insurance will cover you for the loss or damage to goods that you are responsible for while being transported to and from your business premises to the destination site,” explains Clayton Ellary, commercial branch manager at Aon South Africa. “This is especially important when you’re responsible for goods that have already been paid for by a customer and are pending delivery.”

Another worrying trend is the increase in hijackings of branded vehicles with known valuable cargos and equipment such as IT, electronics, solar products, CCTV and alarms, designer apparel and so on – criminal syndicates target and hijack these vehicles, the stock is rapidly offloaded into waiting vehicles and they disappear almost as quickly as they strike.

“The most important aspect is to ensure that you have sufficient cover for the value, frequency and type of goods that you are transporting,” Ellary says. “While policies vary from insurer to insurer, an experienced broker will be invaluable in taking you through a thorough needs analysis to determine your exposures and match them to the most appropriate insurance cover.

“Where high-value goods are being transported more frequently, you may require more comprehensive cover and higher sums insured under a marine policy, which would not be available on a standard commercial-goods-in-transport policy.

“A broker with sector-specific experience of the many risks facing your commercial business is invaluable in ensuring that your cover is adequate to cover your unique industry risks, that it complies with any contractual agreements you may have with customers, and that you are not exposed under any exclusions and conditions that may exist in your policy.”