Times at the moment however, are rather bad. Analysts and economists all fear a double dip recession as parts of the European Union continue to struggle with their debt. Many businesses are reporting lower revenues as a result of fewer orders and the liquidation of some of their clients has left many fearing the worst.
More than ever, now is a time to seriously consider your business risks and your current methods of regulating and managing them. Some insurances are mandatory, but others such as Cargo Insurance Coverage are not. When times are hard, many businesses tighten their belts and decide to skimp on their insurance and risk management policies to save money. Such decisions are also taken lightly, many people forget that accidents and incidents can indeed happen to them and some rue making such a decision without having sought advice.
One such example is that of the Costa Concordia, a Cruise ship that ran aground off the western coast of Italy on the 12th of January this year. The resulting damage and the potential cost of salvage and repairs are though to equal or exceed the value of the ship, making it a constructive total loss. Few people who boarded the ship ever considered that it might sink, but even in the absence of terrible weather, these things can… and do happen. Carnival Corporation & plc, the ship’s owners, were however insured against such a loss. If they had decided to cut back on their marine insurance coverage, they would not only have lost an entire cruise ship, but they would also have to foot the bill for the salvage of their ship’s fuel as well as having to pay for the salvage or removal of the ship itself.
In economic times like these where revenues and client numbers are down, can any business afford to lose their ships or cargo in this fashion? Many would say no, yet those businesses that choose to stop their cargo insurance policies in a bid to save money are risking such a fate, one that could possibly ruin them.
Things are about to get worse however, only now it’s not the threat of running aground in Italy that should be worrying businesses, it’s the ice and snow. A level 4 cold weather incident alert has been issued to the UKs army and temperatures are expected to plummet as we experience the -11c temperatures currently being experienced by the rest of Europe.
Anyone that has an interest in logistics can tell you that cold weather is a bane. It disrupts and severs supply routes and it can result in huge losses. British roads commonly fall prey to cold weather, where Lorries jack-knife on motorways, other goods vehicles are involved in crashes or overturn because of the poor weather. In severe cases planes are grounded, and rough seas can stall seafaring cargo, or can cause losses on those cargo ships already embarked on their voyage.
It is essential therefore that those businesses refrain from cutting out their cargo insurance coverage. The decline of the economy does not minimise the chances of an accident or business disruption occurring, and so to do so is to place your business in jeopardy.
There is hope however, it is possible to consolidate your existing cargo insurance coverage into one policy, or you could trim out the coverage you don’t need whilst maintaining enough cover to protect your business should the worst come to pass. The best way to do this is to consult with a specialist business insurance broker. They can examine your existing risk management practices and better recommend a policy to suit your specific needs.
Tailored wordings for example give you exactly the right, water-tight cover you need without any unnecessary excesses, which can help you save money.
Don’t take a gamble with your business, make sure you have the appropriate cover before you have the opportunity to regret not doing so!