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Stock Insurance / Stock-in-transit Insurance

Consider stock-in-transit insurance for business.

As a retail store your stock is one of your most important and most valuable resources and you need to protect yourself.

What is Stock Insurance? 

Stock insurance a form of business insurance designed to cover risks relating to your stock. By ensuring your stock, you protect your business continuity. Should an insured event leading to damage or loss of your stock occur, stock insurance comes into play. 

What is Stock-in-Transit Insurance?

Stock-in-transit insurance, also called goods in transit insurance, is a form of short-term insurance for businesses. It was designed to protect both the buyer of the stock and the seller while stock is on the move, or “in transit” from the seller to buyer. Whether your stock is being shipped or moved by truck, it will be exposed to new risks. Businesses can cover the potential financial disaster of loss, theft, or damage to the stock while it is being moved with stock-in-transit insurance.

How Does Stock-in-Transit Insurance Work?

Think of it as a form of movable objects insurance designed to cover smaller and larger loads of stock that is being moved. Sometimes the stock will be raw materials moved from one location to another during production. At other times, the stock will be finished products being delivered to a buyer. The policy should be purchased by anyone who is responsible for the stock. If stock leaving a factory belongs to the buyer, the buyer should purchase the insurance policy. It will then pay out to the buyer. Sometimes agreements between buyers and sellers stipulate that products are the property of the seller until it has arrived at its destination and undergone inspection. In such cases, the seller can take out a stock-in-transit insurance policy that mitigates the risk of loss of or damage to the stock.

What Does Stock Insurance Cover?

Stock insurance can form part of a more comprehensive business insurance policy, part of an industry-specific policy, or be purchased as a standalone product. Typically, stock insurance covers theft, fire, accidental loss or damage, deterioration of stock, floods due to burst pipes, explosions, acts of nature, or even malicious damage. Many stock insurance policies include coverage for packaging materials too. 

Depending on the business insurance company, stock insurance can cover raw materials and fully manufactured products. Sometimes cover is included for international locations like Botswana, Mozambique, Lesotho, Namibia, Swaziland, and Zimbabwe. The extent of cover you get will depend on the insurance provider you choose, as each insurance company offers different parameters.

What Does Stock-in-Transit Insurance Cover?

Stock-in-transit insurance can cover events that cause damage or loss of the stock which is in transit. These insurable events often include theft, accidents, deterioration of stock, natural disasters, fire, flood, explosions, and even malicious damage. The policy usually covers specific stock from point of departure to point of arrival and may include international locations. Stock-in-transit plans also usually offer cover for transportation and storage materials such as ropes, chains, tarpaulins, and packaging materials the cost of which could add up.

Some stock-in-transit policies may exclude certain events such as theft of stock when the transport vehicles are unattended and not hidden from view (for example, on the seat instead of in the boot). If a vehicle is left unattended overnight and not properly housed (for example, in a locked garage) and theft occurs, some insurance providers also will not cover it. You can find out what insurance providers exclude from their stock-in-transit cover by reading the policy before you sign.

Who Needs Stock Insurance or Stock-in-Transit Insurance?

If your business depends on stock, whether you sell it or buy it, you will need stock insurance or stock-in-transit insurance. Some industries can benefit from industry-specific policies such as the agricultural or marine industry. Otherwise, stock insurance or stock-in-transit insurance policy can protect businesses in retail. Think butchers, mass marketers, a bakery, coffee shop, restaurant, florist, or even hairdressing salon. 

DISCLAIMER: The information provided in this article is meant for informational purposes only and should not be construed as legal, medical, or financial advice. Facts stated in this article are correct at the time it was published.

 

Sources: moneyshop; voorpos; nib

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