How can you ensure that your transportation providers are properly insured?

1 Why insurance matters

Transportation insurance is a type of coverage that protects the goods and vehicles involved in the movement of products from one place to another. It can cover different risks, such as damage, theft, loss, or liability for third-party injuries or property damage. Depending on the type and value of the goods, the mode and distance of transportation, and the contractual terms, you may need different types of insurance, such as cargo, motor truck, general liability, or workers' compensation. Without adequate insurance, you may face legal claims, financial losses, or reputational damage if something goes wrong during transportation.

3 How to monitor insurance

Verifying insurance is not a one-time task. You should also monitor the insurance status of your transportation providers regularly and update your records accordingly. You should request a new COI whenever there is a change in the insurance policy, such as a renewal, a cancellation, or a modification. You should also track the expiration dates of the policies and remind your transportation providers to renew them before they lapse. You should also review your insurance requirements periodically and adjust them according to the changes in your business needs, the market conditions, and the regulatory environment.

4 How to communicate insurance

Another important step to ensure that your transportation providers are properly insured is to communicate your insurance expectations clearly and consistently. You should include your insurance requirements in your contracts, service level agreements, and bid documents. You should also explain the reasons and benefits of having adequate insurance, such as reducing risks, improving performance, and enhancing customer satisfaction. You should also provide feedback and recognition to your transportation providers who comply with your insurance standards and address any issues or gaps with those who do not.

5 How to manage insurance claims

Even with proper insurance, you may still encounter situations where you need to file or handle an insurance claim. This process can be complex and time-consuming, requiring careful documentation and communication. To manage insurance claims effectively, it is important to report any incidents or losses to your transportation provider and their insurer as soon as possible. Additionally, collecting and preserving any evidence such as photos, videos, receipts, invoices, or delivery notes is essential. You should also cooperate with the investigation and provide any information or documents requested by the insurer. Furthermore, you should review the settlement offer and negotiate if necessary, while keeping a record of all the correspondence and transactions related to the claim.

6 How to improve insurance practices

Finally, you should always look for ways to improve your insurance practices and reduce your transportation risks. You should analyze your insurance data and identify any patterns, trends, or issues that affect your transportation performance and costs. You should also benchmark your insurance practices against the best practices of your industry and peers. You should also seek feedback and suggestions from your transportation providers and other stakeholders on how to improve your insurance processes and policies. By doing so, you can enhance your insurance coverage, compliance, and efficiency.