5 Types of Insurance for an Importer

You could be importing durable products, consumables, electronics, textiles and any number of other types of products from foreign locations all over the world.

What are the top five coverage issues you need to be thinking of?

First on my mind would be marine cargo insurance

This insurance will cover the goods from the point you have financial responsibility for them. This could be from the point goods leave the manufacturer’s loading dock, or when they are loaded onto a vessel, whether that’s as ocean cargo or air freight.

Then covering those goods while in transit to your warehouse or their final destination. Typically this is achieved on an Ocean Cargo or Marine Cargo policy form endorsed to include what is called “warehouse to warehouse” coverage – meaning it protects property from the time it leaves its point of origin until it lands at it’s final destination.

Second coverage is warehouse coverage

Warehouse coverage issue aligns with the goods being shipped and that is protection for those goods when they do land in your warehouse or your logistics distributor and stay there. This can be included on an ocean cargo policy or on a separate property policy depending on your circumstances.

The limit of insurance you purchase should reflect the maximum replacement value of goods stored at any one time. It’s critically important to adjust your insurance limits when the value of goods increase in warehouse.

When it comes to warehouse insurance I often get questions like –

Doesn’t my warehouse insure the goods in their possession? Don’t they have coverage? Why do I need to insure the goods?

The answer to this issues is usually found in the warehouse agreement or contract of warehousing and typically the warehouse has no responsibility for insuring your goods stored with them.

The warehouse often will be insured for certain claims their customers may bring to them for damaged goods but that coverage is written on what is known as a legal liability policy form – the warehouseman must have some negligence in causing the claim that damaged a customer’s goods and then the warehouse agreement or contract typically limits the amount of coverage to a certain amount per pound – usually something like 50 cents per pound.

So, do not rely on your warehouse to protect your goods stored with them, and if you are offered supplementary insurance from the warehouse I do not recommend doing that. It’s always better and less expensive to control your own insurance coverages.

Third on my list of insurance policies for importers would be Product Liability Insurance

This policy is often called Products Insurance. Products Liability is part of a general liability policy and can be difficult for importers to get and the question I get here is why is it difficult and expensive?

The answer is that when you import goods from overseas you are the de facto manufacturer of that product for insurance purposes since there is no collectable insurance from the company that did manufacture it. If you distributed products that are solely manufactured in the U.S. and you had a certificate of insurance from the manufacturer than you’d be classified as a distributor – but since there is no available insurance certificate from a foreign manufacturer you get classified as a manufacturer which is going to be more expensive. I know, it doesn’t seem right, but this is the way it works.

But, don’t worry, we work with the top underwriters and secure the best quotes for our importing clients when it comes to general liability insurance.

Fourth on this list would be Product Recall Insurance

What this coverage does is protect you from the costs to recall a potentially dangerous product from the distribution stream. It often will include the costs of notifying the public, crisis management, physically removing products from store shelves, destroying the product, overtime and all the other costs associated with a recall. This can be especially important for importers who sell goods on Amazon since they have very stringent recall procedures.

Recall insurance is often purchased by importers of consumable goods, electronics, component goods, as well as durable goods.

Fifth on my list is Corporate Travel Insurance

This is especially important for companies that send the executives or other company personnel overseas on buying trips, quality control inspections, or to visit with the manufacturers you’re buying from. It can include traditional travel accident coverage for death, disability and dismemberment as well as lost baggage, travel assistance, and related issues, but more importantly will provide global health coverage.

Your company benefit plan usually stops at the border so what happens when an employee or executive is injured or becomes ill overseas? Who pays those medical bills?

Without corporate travel accident insurance you’re going to pay those coverages out of pocket and if you’re traveling in a developing country and need to be airlifted for medical treatment or to be evacuated for political risk issues then we’re talking about some very steep expenses coming out of pocket.

Now on top of these five insurance issues for importers you’ve got traditional insurance issues that need to be addressed as well:

Cyber insurance, workers comp, crime insurance, business auto, credit insurance, etc. The good news is that we do all of these coverage forms and represent the top insurers countrywide that love working with importers and distributors.

If you’re looking for an expert that can craft the right coverage program to fit your needs and not overwhelm you, then we’re the first and only call you need to make. No need to be filling out a lot of forms online, or engaging in multiple quoting sessions – no need to waste your time.

Give me a call, or drop me an email and let’s set up a time to chat. It doesn’t matter if you’re a start up importer and never bought insurance before, or you have a renewal coming up and you’d like to talk about options.

Thanks, If you found this interesting – here are two more videos you may find helpful: