Written by Driverless transport systems, packaging, loading and reloading are already typical robotic examples which will gain in importance.
Recognising, avoiding and minimising risks while insuring the remaining, often huge risks – if still insurable in light of reassurance capacities – is a key measure in business. It is also a challenge because globalisation and its worldwide networks harbour considerable risk potential. Such risk may threaten the very existence of businesses and is therefore ideally transferred to the insurer. Additionally, professionally managed businesses also face the risks associated with an increasing number of natural hazards due to climate change. That is why all parties involved in trade and transport supply chains are called upon to join forces to fight the ill effects of climate change, meet the ever more stringent legal requirements and adopt a responsible environmental policy.
Securing livelihoods and saving resources
Insurances cover major damages and losses. They help secure one’s livelihood and ensure that businesses can be kept up and running. It even makes sense to insure a seemingly small potential for damages because such risks can be quite complex, tie up considerable human resources or end up in a legal cross-border dispute. If that is the case, a lack of contact to the required legal experts or lack of knowledge of applicable law, uncertainty as to the place of jurisdiction, inexperience with foreign case law, and local civil provisions can exacerbate the dispute.
D&O, business liability, legal protection, transport liability, motor vehicle third party liability, collision, machine failure, accident, life, disability cover, buildings, inventory and equipment, storage and warehouses, business interruption, electronics, cyber, cargo, and so on. These keywords are part and parcel of the transport and logistics business and these risks need to be properly insured.
More liability claims
Parallel to the increasing amount of liability claims we saw over the last few years, we also noted more unjustified claims. The prevention of damage claims as part of liability insurance policies will therefore gain in importance – especially in the case of business liability and transport liability. In dealing with such claims, brokers will be challenged to use all their skills, knowledge and experience, and exercise a fair portion of sound judgement, put the client (and in turn his/her customer) first and not burn bridges that may have taken years to build. Simply rejecting a claim without proper explanation is not good enough, it is also counter-productive. Rather, the policy holder’s contractual partner as well as the injured party should be properly informed as to why a claim has been rejected and why the insurer will not pay for damages. Offering such explanations helps create a better understanding, even if the insured may not be entirely satisfied with the outcome at the time.
Spotting challenges early on
Spotting and identifying future challenges in the face of changing circumstances will become the order
of the day. Even if most developments are difficult to predict and often turn out to be megatrends, it is prudent to think ahead and incorporate them into the business strategy. That way, the right steps can be taken should such trends materialise. In this sense, it is important to remember that large corporations not only tend to take the lead in developing mega trends, they also play an active part in driving their development to demonstrate innovation leadership.
Focus on customer needs
By putting the spotlight on innovation leadership, coupled with strategic considerations to reduce costs and increase profits, large logistics companies have implemented ever shorter delivery times. In doing so, they have awoken their customers’ desire to receive goods as quickly as possible. Buzzwords like SDD (same day delivery) or JIT (just in time) come to mind. As a result, it will no longer be a case of the big fish eating the small fish but rather the fast eventually eating the slow. It is the fast companies that will grow quicker – an exception being niche market specialists. However, fast also means more risks. For example, JIT raw materials or semi-finished products can result in damages caused by production downtimes or a stoppage if, for example, the production company lacks the very same JIT raw materials in case of a delayed delivery by the carrier. In the event of a CMR (Convention relative au contrat de transport international de marchandises par route) case, for example, claims for damages which are usually limited may be turned into a case of gross negligence or even a wilful misconduct to lift this limit and ensure full compensation. Such payments could amount to millions of euros. This highlights the significance of a solid transport liability insurance, not only for the carrier but also for freight forwarders as the forwarder – if he concludes a contract of carriage – shall be liable also acts and omissions of his agents and servants.
Otmar Tuma
Advisor Transportation & Logistics
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