Transportation affects nearly every enterprise in North Texas, across the country and around the world. Transportation exposures are compounded with federal laws and regulations, which must be adhered to by the transportation company as well as the insurance carrier. Certain industry-specific insurance considerations include property coverage, cargo form restrictions and warranties inside the policies. Therefore, business owners must take great caution to insure all exposures properly. Understanding the risks and exposures associated with the industry gives Swingle Collins the ability to effectively communicate with our transportation industry clients, including owner operators, general freight carriers, freight forwarders and third party brokers.
Transportation companies often own substantial amounts of real property in connection with their business operations. These structures will frequently include incidental property, where considerable values can be present. Unfortunately, most property forms used by carriers contain several peril and value limitations for many of these items, which could lead to severe under-insurance problems. In these situations, additional endorsements are often needed to buy back coverage for several restricted categories of real property including foundation, underground pipes, fencing, retaining walls, bridges, roadways, patios and walks.
Along with the perils protection, all cargo policies will contain limitations related to the type of property they are insuring. Many of these are common to all inland marine forms (i.e., inherent vice, employee dishonesty, etc.), while others deal with specific exposures. For instance, cargo forms will often contain restrictions for the theft of alcoholic beverages, which would be inappropriate for truckers that haul beer, wine, or hard liquor. Other forms may include limitations related to spoilage, deterioration, contamination or breakage that can be especially relevant to haulers of certain perishable or fragile products.
Besides exclusions, many cargo policies will also contain warranties that spell out certain conditions that must be maintained for coverage to stay in effect. The purpose of most warranties is to either reduce the coverage provided under the form (e.g., an all risk policy that includes a mandatory locked truck warranty) or to clarify expanded coverage that may have been added to a basic form (such as an equipment maintenance provision included in a refrigeration breakdown endorsement that has been added to a named perils policy.).
Coverage Options
Along with the basic cargo policy, your Swingle Collins agent can suggest a wide assortment of supplemental options or endorsements that can be added to the standard coverage form to customize it for your operations. Many of these attachments are designed to buy back policy exclusions or limitations that may be relevant for a specific kind of load.
Those companies that operate extended storage or warehouse facilities may have need of a warehouse legal liability policy. Essentially, the exposure of a warehousemen is similar to a common carrier, and the warehouse legal liability policy is comparable to a cargo policy in that it is designed to cover liability imposed upon the warehousemen for loss or damage to property of others while under his care. In fact, many insurance companies combine their cargo and warehouse forms under one policy to provide a convenient method of insuring both the transit and long-term storage exposures. Also like cargo policies, these forms can vary considerably between carriers. For example, most warehouse forms specify a statutory and contractual legal liability limit per loss. Some will even provide for an additional direct primary coverage whereby a warehouseman can issue certificates of insurance to provide increased values on goods above the legal requirements. Once again, this type of insurance is many times written in conjunction with direct damage cargo coverage on one master policy that allows for a single certificate that includes a limit for each exposure.
Remember also that warehouse forms should be reviewed as to the exclusions and restrictions found within the policy. For instance, most warehouse forms will include the same type of property limitations (i.e., precious commodities, jewelry, money, etc.) and perils limitations (i.e., false pretense, refrigeration breakdown, acts of God, etc.) as are found in many cargo policies. Many limited warehousemen forms are written to only insure property found within a covered building thus eliminating coverage for goods stored outside of a structure, such as larger equipment items. We will carefully review any limitations and exclusions with you and, by speaking with the insurance company, eliminate or modify them for you when the need arises.
