$100 million-plus of uninsured cargo losses highlight coverage gap: Willis

More than $100 million dollars worth of cargo losses have not been recovered under traditional cargo insurance policies in recent years as a result of critical exposures being excluded, Willis Group Holdings plc reported Monday.

There is a significant gap in coverage for cargo risks around the world – highlighted by heightened levels of political unrest and uncertainty – to which standard “all-risks” cargo insurance policies may not respond, notes a statement from the global risk adviser, insurance and reinsurance broker.

In response, Willis has launched what is believed to be the first insurance facility to protect cargo in transit and in store against all types of political violence, terrorism and war risks.

Undercover wraps up the coverage provided by these different policies under a single facility, eliminating gaps in coverage and reducing premium costs by removing duplication of cover, Willis notes.

“With all the unrest currently sweeping across the world, it can be difficult for companies to be assured that they have the right cover in place, particularly when the definition of violent acts is open to interpretation,” Trevor McGarry, executive director of Willis’s marine insurance business, says in the statement.

How events are defined “has a critical bearing on whether or not insurance policies will respond,” McGarry explains.

Willis reports that traditional cargo insurance policies typically exclude certain losses, such as those arising from civil war, insurrection, rebellion and terrorism for goods in store. Political violence policies, which typically respond to these types of risk, usually exclude transit exposures and cover fixed assets rather than stock, the statement adds.

The new facility, McGarry says, “protects companies against all their cargo exposures, regardless of whether that cargo is on land or at sea, in transit or in store.”