Protect Your Business’ Goods with Delivery Insurance

Author: Fariza Soraya

Soraya is a Business Development Executive at Senang [https://www.senangpks.com.my], an On demand insurance company. She organizes and plan partnerships in regards to the marketing platforms and new upcoming business opportunities.

Businesses that transport goods on a regular basis can be vulnerable to risks, such as losing their goods along the way or having them damaged. Loss or damage can be a setback not just monetarily, but losing the customers trust if or when the items are failed to be delivered in a good condition.

Therefore, it’s very important to ensure all items are in good condition before leaving the warehouse and being placed in the hands of 3rd party or in-house carriers.

1. What is Delivery Insurance?

Also known as inland marine insurance, transit insurance is a type of coverage that protects your goods while in transit from your warehouse to your customers. It also covers your goods for all land, road transportation journeys and handling of goods from various warehouse while in transit. Coverage includes accidents, theft or natural disasters which happens while handling the goods or travelling.

2. Who Should Purchase Delivery Insurance?

Any companies that requires to transport items by land/Air in large amounts regularly should consider purchasing transit insurance. It is important for business owners to protect their goods from being loss or damaged. These goes to businesses that transports high value items, expensive tools or machinery should also consider transit insurance.

3. Types of Coverage Under Delivery Insurance

There are several types of transit insurance to consider for your business: -

  • Carrier insurance - specifically to cover third-party carriers of your goods
  • Vehicle insurance - to cover damage or loss of vehicles owned by the company
  • Vehicles overnight insurance - covers goods which needs to be stored overnight in the company vehicle
  • Specified items insurance - to cover certain types of items specifically and to reduce the premium which would be charged on other covered items

4. How are premiums priced?

Premium pricing for transit insurance boils down to two most important factors. As we have a strong relationship with our platform partners, we are able to reduce the price to as low as RM1.00 for each delivery order.

5. What Doesn’t Delivery Insurance Cover?

The following situations are typically not covered by transit insurance, although there are exceptions depending on the provider:

  • Wear and tear, or natural deterioration
  • Spillage due to poor packaging
  • Theft or pilferage by an employee of the insured

6. How to choose delivery insurance policy which suits your business

For example, you have to deliver an item from Point A to Point B and use our platform partners services such as Delyva. In this case, all of you have to do is click buy insurance button and key in the value and item name. Your price will be added to the final cart and you will receive an immediate e-mail of the insurance cover-note.

7. How are insurance claims calculated for delivery insurance?

In order to expedite the covering process, most transit insurance adopts a claims formula from the Average Clause, which means that clients can declare their consignments in any value they wish as long as it is below the market value of the consignment note.

For example, with Senang insurance, this could be their consignment invoice value, cost value, 20% of cost price, 10% invoice value, or any value below the market value of the consignment note. However, clients are encouraged to declare their consignments at the market value.

Whenever there is a claim, the insurance company requests an invoice, quotation, cash bill or any pricing document of that consignment, verify it against the average market price, and apply the average clause claim formula as follows:

Equation
Claim Amount = Senang Declare Value
Consignment Market Value
X Repair cost or
Consignment Market Value

Alternatively:

Sender, ABC Company, wishes to send a mobile phone from Malaysia to Hong Kong. The sender informs the insurance provider that the Nokia mobile phone is worth RM1,299 in the market. Being a distributor of Nokia, ABC’s cost of the said mobile phone only amounts to RM1,000. In order to save on the surcharge, ABC decides to declare only the cost. In the event that an accident happens and the mobile phone is lost, the amount that insurance company will pay ABC is as follows:

Equation
Claim Amount = Senang Declare Value
Consignment Market Value
(<=1) X Repair cost or
Consignment Market Value
Calculation
Senang Declare Value /
Consignment Market Value
  Repair cost or
Consignment Market Value
  Claim Amount
MYR 1,000
MYR 1,299
X MYR 1,299 = MYR 1,000

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