Check your insurance cover as cargo theft continues to rise

“Police warn drivers over recent upsurge in cargo thefts” (Motor Transport 8/2/21)

Whilst police have been warning drivers about the alarming rise in cargo thefts since the beginning of 2021, haulage and logistics operators should heed this stark warning.

With more than 60 cargo thefts from trucks reported since the beginning of 2021 amounting to over £1 million worth of goods stolen, haulage and logistics operators should be asking themselves: What is the response of and impact on the insurance contracts of those operators affected? It highlights the importance of rigorous risk management and vehicle security, particularly involving high value, theft attractive cargo.

When considering the insurance policy response to cargo theft, it’s important to acknowledge it is a “liability” policy, and as such, will respond to a claim where the operator is deemed to be legally liable for the loss or damage. As a haulier or warehouse contractor, you are not insuring the goods you carry or store – you are protecting your business against the liability you are exposed to under the Terms and Conditions under which you operate with your customers.

The insurer will consider how the policy will respond after taking into account many aspects, but importantly the Terms and Conditions under which you trade and the type of goods carried, together with the circumstances of the loss. Normally, policies will have specific warranties and conditions that apply when operators are carrying “thief attractive / high value” cargo, which can include conditions such as vehicles not being left unattended, limited monetary liability, not allowing the use of Sub Contractors and secure parking conditions, to name just a few.

Do you know your warranties and conditions? Are you confident you are complying?

If an operator fails to comply with the specific warranties and conditions within their policy, the insurer may have grounds to decline to respond to the claim leaving the operator’s customer significantly out of pocket and the operator facing a difficult discussion with his customer (and potentially loosing that customer) - something no business wants to face.

It is essential that freight and haulier’s liability (goods in transit) cover is arranged and understood by the insurer, the broker, the client (haulier) and their customer.

If you have not reviewed or audited your risk protection and insurance programme, now is the time to consider it.

John Marks, client partner, Partners&