Breaking down your business insurance requirements
Transport and logistics insurance is complex. Depending on your business’ size, services, cargo and crew, you likely require specialised cover. Protecting your business and workforce is your biggest concern – which is where a tailored transport and logistics insurance policy comes in.
Why is transport and logistics insurance important?
Most companies, SMEs and sole traders in Australia’s $103 billion Transport and Logistics sector know that business insurance is an absolute must-have. But a basic policy is often not enough to keep you fully covered.
Whether you keep stock in a warehouse, carry cargo via sea or land, employ dozens of drivers or just yourself, and what type of materials you move – these are all factors when considering insurance requirements.
What does transport and logistics insurance cover?
Transport and logistics insurance covers your means of transport, such as heavy haulage carriers, seafaring vessels, trucks, passenger cars or cargo vans. The coverage also protects what you carry: sea containers, computer chips, livestock, even dangerous cargo.
Put simply, if your work involves storing, moving, importing or exporting goods – from running a warehouse to shipping cargo internationally – then you may need specialised transport and logistics insurance.
Connect Business Insurance tailors transport and logistics insurance policies to suit your business. To help you understand your requirements for transport and logistics insurance, we have compiled this guide to the different types of insurance you might need.
Commercial motor vehicle and heavy motor vehicle insurance
Commercial motor vehicle insurance generally covers the vehicle (or fleet vehicles) used to transport goods. Similar to your personal policy, commercial motor vehicle insurance may cover:
- Theft, damage or loss of a vehicle
- Property damage
- Third-party damage
- Towing costs
- Damage to rented trailers
Our policies also include cover for downtime, redelivery, theft recovery and more. Typically there are different policies available depending on whether you insure one vehicle or a fleet. Light vehicles, heavy vehicles over 3 tonnes and fleets will have different options, as will hauliers and couriers.
Marine cargo insurance
When 99% of Australia’s exports rely on sea transportation, totalling close to $220 billion in value, protecting our shipping businesses with marine cargo insurance is critical.
The specifics of your cover will vary by policy. But in general, marine cargo insurance covers not only the vessels but also the goods on board in case of accidental loss, damage, or even piracy:
- Insured events (collision, fire and overturning)
- Accidental damage
- Explosion and lightning damage
- Dropping goods during loading or unloading
- Impact from an external object damaging cargo
- Malicious damage by a third party
Any business relying on the sea to send or receive materials and products, or conduct their operation, should consider marine cargo insurance.
Products and public liability
Public liability insurance protects your business in case of accidental damage or injury. If a representative from your company is legally at fault, public and product liability insurance covers costs like:
- Legal costs
- Investigation costs
- Damage to vehicles and property (yours or theirs)
- Compensation payouts
- Personal injury costs
- Up to $20 million in liability cover
Public and product liability cover is essential for businesses of all shapes and sizes. When we build your insurance policy, be sure to ask about tailored cover for your company’s specific risk profile.
Special types of liability insurance: warehouse and freight forwarders
Transport and logistics insurance can quickly become specialised. Warehouse operations and freight forwarding are two great examples of the “pointy end” of public liability insurance.
Because the risk profiles in these industries do not always fit neatly into a standard business insurance policy, they are worth highlighting in the context of transport and logistics insurance.
Warehouse liability insurance
Depending on the specifics of the operation, this kind of public liability insurance generally includes coverage for:
- Third-party damage and injuries
- Damaged or stolen stock
- Forklift and crane damage
- Fixtures, fittings and shelves
- Employee theft
- Equipment breakdown and business interruption
Freight forwarding insurance liability
Freight forwarders carry a heavy responsibility. They encounter a wide range of liabilities, which makes this type of insurance highly specialised:
- Cargo loss or damage
- Liabilities against third parties
- Errors and omissions
- Abandoned cargo removal costs
- Loss or damage of leased equipment
- Per diem costs for replacement equipment
Connect Business Insurance will work with you to create a tailored warehouse liability insurance policy. The specifics covered in the policy will depend on how you run the business, so it is always best to speak with an Australian business insurance specialist.
Plant and equipment insurance
Whether you own all your equipment or hire as needed, plant equipment insurance ensures your costs are covered if anything goes wrong. In general, for transport and logistics companies, this type of insurance covers:
- Cranes and loaders
- Warehouse equipment like forklifts
- Hired equipment
- Excavation and earthmoving equipment
- Transiting equipment to and from a job site
Even if you don’t haul cargo for a living, transport and logistics insurance (as an addendum to your business insurance policy) might just save you stress and financial burden if the unthinkable happens.
Workers compensation insurance
Workers compensation insurance covers the wages, medical fees and rehabilitation costs of an employee who is injured or sick because of their work. It’s a well-known insurance inclusion and a legal requirement in most industries. But have you considered how it applies to logistics companies?
Driving, warehousing, hauling, loading, picking and packing – these are all highly physical jobs. Many of the people you employ would be out of work for a long time if they were injured on the job. Leaving your business exposed to that financial burden does not bear thinking about.
ISR (industrial special risks) insurance
Also known as property insurance, ISR insurance protects your business against the high cost of replacing your largest asset – your building. For transport and logistics companies, that could mean equipment in a rented office, an empty storage facility or waterfront boat storage.
ISR insurance generally covers:
- Water damage from burst pipes or mains
- Damage or loss from vandalism, break-ins and (for some policies) dishonest employees
- Glass and signage damage
- Damage resulting from riots, disputes or civil unrest
- Machinery breakdown
Cyber Insurance for Transport
Insurance is not only for physical goods. Cyber insurance is an increasingly in-demand service to protect companies who store, manage or distribute sensitive data.
Data breaches are a very real risk today. Cyber criminals target vulnerable companies, exposing third-party data such as:
- Employees’ personal details
- Shipping records
- Customer data
- Credit card and transaction information
- Contact details for private individuals
In the event that your company is held liable for such a breach, cyber insurance protects you against the financial fallout.
Does your business qualify for transport and logistics insurance?
Transport and Logistics is a $103 billion sector in Australia, employing close to 460,000 people. Our entire country relies on the companies, small businesses and sole traders who keep Australia moving.
And those companies rely on Connect Business Insurance.
To understand your business insurance requirements in more detail, reach out to Connect Business Insurance for a no-obligation consultation. Our insurance specialists will help you untangle the insurance web and find the right policy for your business.