Filed Under:Agent Broker, Commercial Business

Ship Shape

When small businesses enter the overseas market, they need to understand the additional risks they may face. Learn the ins and outs of ocean marine insurance.

Globalized trade has become so pervasive that its effects can pop up in unexpected ways—unfortunately, sometimes with negative consequences that can catch both insurance agents and their customers by surprise.

Take the simple example of a small business with a customer base firmly rooted in the U.S. that earns some of its revenue from website sales. An order is placed by a buyer in Germany. The company's owner ships the goods, not realizing that additional insurance coverage may be necessary. He learns that his business package coverage doesn't extend overseas when something goes wrong—and suddenly the agent may be blamed for not offering the extra coverage needed.

If the answer is yes, a series of questions can follow: What is being shipped? Are the items fragile, perishable or possible contaminants? Where are the goods being shipped to and from? Is the destination a developed country with established commercial processes and modern infrastructure? What level of trade is the business engaged in; i.e., is this a one-time shipment or a steady stream of sales? The answers to these and other questions can help agents determine the best path for protecting their customers.

Understanding Terms of Sale

Agents can help customers understand the importance of choosing specific terms of sale for each shipment, and can review the circumstances to determine the pros and cons of various insurance-buying strategies for a customer. For example, while it may sound attractive to have the buyer be responsible for insurance costs and damages from the moment a product leaves the seller's hands, it may build better long-term customer relations to keep control until the product is in the buyer's possession. By keeping control, the seller can make sure there is adequate insurance and that coverage is with a carrier that will work swiftly to resolve claims.

Balancing Costs and Convenience

With respect to these and any types of insurance coverage, it is critical that the company and its agent closely review the policy forms in order to understand the terms, limitations, sub-limits and exclusions that apply to the particular coverage.

What to Look for in a Carrier

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