stock throughput insurance programs

Cradle to Grave: Stock Throughput Insurance Programs

The marine stock throughput insurance programs are an all-inclusive policy that covers goods from the time an assured assumes an interest in the goods up until their interest ceases. Companies that import, distribute, or export merchandise need this policy for protection against any loss or damage that might occur. Stock throughput is a combination of ocean and inland cargo (road, truck, rail, or air) plus location coverage in a warehouse or manufacturing premises.

This policy is applicable whenever the cargo follows a round trip or has multiple stops along the way. It also provides seamless coverage of goods and more control of inventory risks throughout the entire supply chain, from the supplier or point of origin through the goods’ final destination.


A stock throughput policy is recognized worldwide

In addition, the stock throughput can offer coverage for stock in various countries. The policy provides cover for a variety of movable goods that are the subject of the insured’s trade, including raw materials, semi-finished, and finished products. The goods are covered at all times whether in transit, undergoing process (although damage caused by the manufacturing process is excluded), or in storage at owned or third party premises.

Prior to the inception of this policy, freight forwarders would be required to provide the insurance for transporting the insured’s goods across the sea, while local insurers would underwrite transit insurance within the country’s borders and provide coverage while the insured’s goods were in storage.

However, this arrangement overlooked the area of highest risk associated with freight. Cargo was often most vulnerable to loss between these two sections. The times when the cargo was being loaded, offloaded, or moved from storage to transit, inventory would often be stolen, or erroneously misplaced, not making it to its destination. This loss scenario typically resulted in disputes among the separate insurers as to which carrier was actually responsible for the merchandise at the time it was damaged or stolen. This often stalled or complicated claims payments. The great thing about stock throughput insurance programs is that they were designed to provide your client with coverages for the cargo “from cradle to grave” as the saying goes.