Are your bases covered?
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.”
What other factors should be considered?
Arrive Alive notes the importance of an effective consultation process and full disclosure of all material facts when an insurance agreement is drawn up. “It may be advisable to gain other third-party confirmation of the ability and experience of the fleet insurance company.”
The fleet insurance premiums should be based specifically on the risk profile of a particular business. It adds:
“The business owner will be well advised to enquire as to:
• The ability of the insurer to administer the claims processes effectively and quickly.
• Availability of emergency roadside assistance – 24 hours a day, 7 days a week.
• Cover for reasonable storage costs or towing to the nearest repairer.
• Who are the approved repairers that the insurer deals with?
• Cover for the costs incurred for the removal of the wreckage as well as costs for replacing locks, keys, remote controls or the reprogramming of vehicle security systems.
• Cover if needed outside the borders of South Africa (Botswana, Lesotho, Malawi, Mozambique, Namibia, Swaziland, Zimbabwe, Kenya, Tanzania, Uganda and Zambia as well as the Democratic Republic of the Congo).
• Cover not only for the vehicles but also for accessories and spare parts.
• Legal liability insurance cover for causing damage to the property of other parties as a result of a vehicle accident.”
How to pick the correct partner – Hollard provides some helpful tips:
1. Decide what you need
First, you have to decide what you need in terms of your insurance. Many companies will have really attractive rates but not offer the exact cover that you want. And, after all, it’s important that you’re happy with your cover so that you can get on and enjoy whatever it is that you’re insuring.
So, think carefully about the package that you would want in an ideal world. You might have to make a few concessions to that annoying thing called reality – but if you keep that goal in your head, you’ll be looking in the right direction.
2. Do some research
When you have a clear idea of what you want from an insurance company, you’ll be able to start looking for the companies that offer this type of service.
Look for companies that are established and that you’ve heard of. This is the best way to know that the insured goods will be in safe hands.
Pretty soon you’ll start to narrow down your search to a few ideal candidates.
3. Get and compare quotes
When you have a few companies on your radar, ask them for quotes. You don’t always want to go for the cheapest company, but it certainly doesn’t hurt to save money. And don’t always think that the most expensive is the best. Look for the company that gives you the required cover at a rate that you can manage.
Once you have all your quotes, take a look at the big picture. Is the price of the premiums good for what you’re getting, and is the company well-established and trustworthy enough to put your mind at ease? If you can answer yes to these questions, you’re onto a winner!