Protected? Think Again: Business Insurance and You

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December 10, 2014

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Photo credit: ius Utomi Ekpei/AFP/Getty Images via The Guardian

Photo credit: ius Utomi Ekpei/AFP/Getty Images via The Guardian

The first and most obvious subdivision of insurance a logistics company can take up is transport insurance. This is a broad spectrum of cover classes that begins with motor insurance. For those participating in freighting, motor insurance is a requirement by law. In the case of a logistics fleet, commercial motor insurance would be a good bet, especially under the |comprehensive” package: this is universally means the cars are covered in case of accidents, fire, theft, third party insurance in case harm comes to another person because of your vehicles, and in some cases riot or terrorism covers, though these may come at an additional cost.

Transport insurance also includes marine insurance, which can cover the marine vessel itself, the cargo it carries and the sum paid for transportation.

Aviation insurance has a similar set up, though insuring goods may be more relevant to most supply chain managers than insuring actual aircraft. Cargo insurance can be considered an entirely separate class in itself, and is key in the supply chain management field.

Cargo insurance provides protection for the logistics firm should said cargo be stolen, damaged during shipping, lost or completely destroyed. Supply chain management firms with large or bulk transportation orders in particular should consider this insurance as any legal action brought against them for compensation due to cargo issues could easily put companies in dire financial straits. Liability can also be a useful category of insurance for a company involved in logistics.

Public liability insurance is a class that protects the company from claims made by persons injured or caused loss by the company or as a result of the company’s activities. The more common and important class of insurance would be workman’s compensation. This covers any bodily harm befalling employees in the course of carrying out their duties for the company. Though the company may not be directly at fault through negligence, it remains the employers duty to compensate workmen for injury or disease triggered on the job. In Kenya, “workman” is generally defined as employees whose earnings do not exceed KES.400,000 per annum, about KES.33,3333 per month, as per the Workman’s Compensation Act.

Photo credit:

Photo credit:

“Superannuation” may sound like scary jargon but we assure you it is fairly straight forward. While not strictly a form of insurance, superannuation consists of retirement benefits and life assurance. Retirement benefits are self explanatory: an employer can choose to help their staff plan for the future by setting up a pension scheme that will ensure they have a steady source of revenue after their working life comes to a close.

Life assurance on the other hand, is set up to benefit the family or dependents of an employee in the event of their untimely death. Life assurance policies ensure that the income that would have been brought in by the deceased is not abruptly cut off, leaving their dependents in dire straits. This is especially important where the employee is the sole or main breadwinner. Supply chain managers can provide access to such schemes for their employees, out of concern for their personnel and also as a ‘reward’ of sorts for long time employees.

Another class of insurance to consider is Property insurance. The major consideration under this class is usually fire and fire related perils. These include lightening, explosions, such as those caused by boilers, and a subcategory that spans a range of probable causes of damage, known as ‘special perils’. This includes social peril, which is damage caused by humans such as during riots, natural perils, caused by forces of nature, and chemical perils, associated with spontaneous fermentation or heating. Convinced? Let us know in the comments which form of insurance you have; and what you think is completely unnecessary as well. Have a protected week, won’t you?


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