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Trucking, marine and rail are fraught with high-level exposures and limits

Suzanne Sharma on May 25, 2011

The world has become an unbelievably small space as technology allows people to communicate faster and with greater ease. Today’s communication abilities also allow Canadian businesses to trade and transport goods much more efficiently.

“[Trading] is on the rise,” says Rick Roberts, managing director at Beacon Underwriting. “In Western Canada, goods are being imported from China, for example, via ship and then they are transported by truck or rail across Canada [and the US] to various destinations.”

However, the trucking, marine and rail markets are very specialized and require underwriters, brokers and insurers that are knowledgeable about world events. Exposures are large and include risks such as wars, strikes, tsunamis, civil unrest, currency fluctuations, varying international laws, and bad weather.

“We’re talking about moving anything, anywhere, by any form of transport,” says Jerry Giroux, president of Aldis Underwriting. “I live by the morning world newspapers and knowing what’s going on. I would not want to insure a shipment, for example, when I should’ve known that the receiving port just got obliterated by an earthquake.”

Brokers who are inexperienced in these markets should educate themselves by joining associations such as the Canadian Freight Forwarding Association (CFFA), or other trucking, shipping and rail groups. This way they can ask questions, learn commonly used terms, and build a network.

And if your client approaches you for a cargo policy, for example, and you’re not experienced then you should partner with another broker who knows the market. You can split the commission on the contract and ensure your client has professional advice and representation, advises Giroux.

“This is a highly specialized area and it might sound easy to go out and get someone a policy,” he says. “But a broker that is really on top of their game needs to ask their client specific questions to ensure that the client is covered. People think that ‘all-risk’ covers everything. It never does.”

In trucking, the majority of claims are collision, bodily injury or theft of the goods or truck. For marine, major liability claims are due to storms and bad weather, which can result in damage to the goods or ship. In the rail market, train derailments are the most frequent type of loss, causing pollution or passenger injury.

What each market has in common is that exposures are high, as are limits. Canadian Insurance Top Broker provides you with a deeper look into each niche, so that you can offer clients the right advice and support.

For our guide to trucking, click here.

For our guide to marine, click here.

For our guide to rail, click here.

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