News / Per-shipment cargo insurance may be key to saving forwarder pay-outs

Johnnyrh ID 24513646 © Johnny Habell

Forwarders are advised to offer their clients a specific kind of insurance to gain better understanding of weak links in their supply chains – and avoid taking the blame for damages.  

Co-founder and CCO of embedded cargo insurance provider Breeze Matt Phillips told The Loadstar on the sidelines of last week’s Multimodal conference in Birmingham: “Any time there’s any loss that reaches the media, we’ll always see a quick uplift in freight forwarders getting questions from their customers asking if they are covered.” 

Mr Phillips advised forwarders to consider per-shipment insurance as a key part of their offering for when a claim interrupts clients’ operations.

He explained: “If the cargo owner is not adequately insured, ultimately the person that’s going to take the blame for it is the forwarder, because the cargo owner will say, ‘well, why didn’t you tell me I wasn’t insured? 

“’Why am I only covered up to ‘x amount’ for a container when actually I’ve got a hundred thousand pounds’ worth of cargo here, and I could have insured it for a small amount of money?’” he said. 

Mr Phillips added that if cargo was damaged, proving where the responsibility lay was “a rabbit hole”.

“You’re looking at different elements of liability and where exactly the claim happened.” 

But according to his co-founder, CEO of Breeze Eyal Goldberg, forwarders offering insurance on a per-shipment level could get easier identification on the root cause of damage. 

“In some cases, you can identify that specific issue – if the shipper was negligent or something like that,” he said.

He added: “You could take some action to make the shipper improve their risk assessment or other QA process to help claims.”

Mr Phillips added: “We had a partner recently who we’ve worked with for a long time, suddenly we noticed a few claims come in. So we started to dig a little bit further into the data and discovered one of their suppliers had changed, and their packaging was slightly different to the previous supplier. 

“So shippers could actually put some checks and balances onto a new supplier and suggest they need to be a bit more careful when packaging.” 

The Breeze co-founders told The Loadstar that most cargo insurance claims were related to damages involving road freight.  

“Most in road are either when things go wrong or when the cargo goes from air or sea to a lorry, and then it is handled several times until it gets to the destination,” they said.  

“I also think theft is coming up [as a cause of claims], but a lot of the damage is breaking and from humidity.”