Cargo Theft: How to Protect Yourself
August 27, 2015
Author: Sarah Kelchen, CSR Supervisor
The United States is considered to have a high level of cargo theft. Although over the past year cargo theft has decreased by approximately 12%, with the new technological and sophisticated tactics by thieves, this number is believed to go in the opposite direction in the coming years. In 2014, there were 794 reported cargo thefts, averaging 66 per month; of those the average value per incident reaches $233,000, a 36% increase over 2013.
Some high theft commodities include food and beverage, electronics, metal, and home and garden products. The states that have been hit the hardest include Florida, California, Texas, Georgia, New Jersey, Illinois, Tennessee, Pennsylvania, Indiana, and South Carolina. Another important thing to note is that 90% of the thefts in the above number occurred when the trailer was stationary and unattended.
So, what do you need to do to ensure that you are covered in the event of such an incident?
First, it is very important to talk with your insurance provider to ensure that your commodities list is accurate and up to date. Insurance policies have a section of exclusions for commodities not covered. It is very important to ensure that none of your commodities fall on this list.
The next thing to consider is your current cargo limit. Does the limit you carry exceed the maximum value of any and all loads carried by your company? If not, you may need to contact your provider to increase this limit.
Other important things to note are any changes in commodities or increases in market value of the commodities being hauled. If you are running into an instance where you are considering an available load that is outside of your normal commodities, please make sure to contact your insurance agent first to ensure compliance with the insurance policy.
As inflation continues, it is also important to ensure that the market values of your commodities are not exceeding the limit of insurance that you carry. Failure to do the above may result in an uncovered or under-covered claim.
Other Possible Exclusions
As stated above, the majority of thefts have occurred when the trailer was stationary and unattended. Unattended trailers are also a popular exclusion on cargo policies for this reason. It is imperative that loaded trailers be attached and monitored at all times if at all possible.
The other exclusion that goes along with this is a locked vehicle exclusion. This exclusion states that a claim could be uncovered if the tractor/trailer was not properly locked or secured in order to prevent theft. There would need to be noticeable forced entry, as determined by the adjuster, to appease the exclusion.
What about driver related thefts?
The United States has also seen a rise in driver related thefts, involving direct theft by drivers or driver’s voluntarily parting with the cargo. Any employee related thefts would result in an uncovered claim on the majority of cargo policies. To ensure coverage, a crime policy would be needed to cover such a claim resulting in a theft with driver involvement. It is also important to review motor vehicle reports and background checks prior to hiring drivers to help catch these potential risks before they become an issue.
|Sarah Kelchen has been in the insurance industry for 4 years working exclusively with trucking companies. She has recently received her Accredited Advisor of Insurance designation and working toward completing her Certified Insurance Counselor designation. Sarah has been exposed to the trucking industry her entire life; her father has been in the trade for over 40 years.|