Safeguard Your Business Assets with Stock Throughput Insurance

December 21, 2023

Stock Throughput Insurance

Throughput Insurance, specifically Stock Throughput Policies (STP), is becoming an increasingly vital tool for businesses involved in the import, export, assembly, manufacturing, or distribution of goods. This form of insurance plays a crucial role in protecting a company’s goods throughout their supply chain journey, from production to the final destination.

What is Stock Throughput Insurance?

Stock Throughput Insurance is a comprehensive insurance policy that offers end-to-end coverage for goods, starting from the time they leave the manufacturer until they reach their final destination. It covers various types of goods, including raw materials, semi-processed goods, and finished products. This insurance is particularly essential for businesses reliant on shipping and logistics, as it offers protection against loss, damage, theft, and even consequential losses due to covered events​​​​. 1 2

How Does it Work?

Stock Throughput Insurance provides “all risk” coverage, meaning it protects against a wide array of risks unless they are explicitly excluded in the insurance contract. This policy is continuous and remains active as long as the insured has ownership or responsibility for the product, even when the product is in the custody of a third party. It is different from other policies like inland or ocean marine policies, as it covers goods over any mode of transportation and in various storage locations, both domestically and internationally​​. 3

Benefits for Businesses

Mitigation of Coverage Gaps: Stock Throughput Insurance fills potential coverage gaps that might exist when goods are changing hands, such as during loading onto a shipping vessel​​. 4

Reduced Administrative Costs and Premiums: This insurance simplifies the process by covering all stages of the supply chain under one policy, potentially leading to lower premiums​​. 5

Comprehensive Coverage: It offers robust protection against a variety of risks including theft, damage, natural disasters, and even market price fluctuations in some cases​​​​. 6 7

Catastrophe Coverage: This is particularly important for goods shipped to or stored in catastrophe-prone areas​​. 8

Improved Risk Management: It helps in better risk management and can increase confidence among customers and suppliers​​. 9

Who Needs Stock Throughput Insurance?

Businesses heavily involved in importing, exporting, or transporting goods are prime candidates for Stock Throughput Insurance. This policy is especially beneficial for industries like food and beverage, retail/wholesale, and raw goods industries, where products are sensitive, fragile, and high in value​​. 10

In conclusion, Stock Throughput Insurance is a critical component for businesses in the shipping and logistics industry. It not only provides comprehensive protection for goods in transit but also enhances a company’s risk management strategy and provides a safety net against various unforeseen incidents. As global trade continues to evolve, the significance of such insurance policies in safeguarding the interests of businesses across different industries cannot be overstated.

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