What to know about cargo, warehouse insurance

Guest Column:
Robert Mucci
I once asked a potential client how much he paid for the last book he purchased. His response was $25. I then asked him if he read it. His answer was yes. I then asked if he read his cargo policy and he said no. I pointed out that he paid $25,000 for this policy, which contained less than 5 percent of the words in the novel, so why hadn’t he read it? His reply was “it was too difficult to understand.” More

To continue reading this article, please do one of the following.



What to know about cargo, warehouse insurance

Guest Column:
Robert Mucci
Posted 3/25/13

I once asked a potential client how much he paid for the last book he purchased. His response was $25. I then asked him if he read it. His answer was yes. I then asked if he read his cargo policy and he said no. I pointed out that he paid $25,000 for this policy, which contained less than 5 percent of the words in the novel, so why hadn’t he read it? His reply was “it was too difficult to understand.”

There are millions of people out there who just don’t read manuals, no matter what they’re for.

Any buyer of a motor truck cargo or warehouseman’s legal-liability insurance policy who does not take the time to read it will, at some point, generally after a major loss, regret not having done so.

All states regulate the sale of insurance. State insurance “departments” control policy language and pricing of most insurance policies. However, not all insurance is subject to the same degree of regulatory control, with one exception being Marine Insurance, both ocean and inland.

Motor truck cargo and warehouseman’s legal liability are classified as commercial inland marine (CIM) and both policy forms are “free of rate and form filing.” Inland marine underwriters are free to write their own terms and conditions (generally referred to collectively as “proprietary coverage forms”) and to charge what the market will bear.

Think of them this way; the essential difference between outerwear and clothing is that outerwear comes “ready-to-wear” while clothing, to fit right and look good, requires the services of a tailor. Motor truck cargo and warehouseman’s legal-liability insurance policies require the services of a “tailor,” in this case an insurance agent or broker, to “custom-fit” it to properly cover the buyer’s exposures.

This can be good or bad. Meaning that the insured literally gets what he pays for with these policies. The good news is that whatever coverage an insured needs can usually be supplied, albeit for a price. Conversely, whatever coverage the underwriter wants removed, can also be removed. This freedom means motor truck cargo and warehouseman’s legal-liability insurance policies, while preprinted by the insurance companies for their convenience, are at least theoretically, modifiable and therefore more susceptible to errors in “tailoring.”

Next Page
Calendar
PBN Hosted
Events

Two Great Programs...One Great Event. PBN's Annual Celebration of Growth and Innovation is now underway. 2014 applications are now available. Deadline August 1st.
  • Healthiest Employers
    Celebrate with the Healthiest Employers in RI on August 14th at the Providence M ...
  • 40 Under Forty
    Thank you to our sponsors and to all those who attended the 10th Anniversary of ...
Advertisement
Purchase Data
Book of Lists
Lists
Book of Lists cover
PBN's annual Book of Lists has been an essential resource for the local business community for almost 30 years. The Book of Lists features a wealth of company rankings from a variety of fields and industries, including banking, health care, real estate, law, hospitality, education, not-for-profits, technology and many more.
Data icons
Data can be purchased as single lists, in either Excel or PDF format; the entire database of the published book, in Excel format; or a printed copy of the Book of Lists.
  • Purchase an e-File of a single list
  •  
  • Purchase an e-File of the entire Book of Lists database
  •  
  • Purchase a printed copy of the Book of Lists
  •  
    National
    Local
    Latest News
    Advertisement