It is no secret the transport and logistics sector has been one of the hardest hit industries caused by two waves, one being Brexit and the other being the pandemic. These events have brought with them a plethora of problems, drivers shortages and customs delays at the port being the main issues.
The most successful businesses are able to recognise the opportunities that lie in every economic downturn, allowing them to excel while competitors struggle. However, companies that weather tough times relatively unscathed by adapting to the changing economic climate could find themselves facing new, uninsured risks in the long term. The Willis IRM Group has compiled these tips to keep your business prospering well into the next economic cycle.
Your Supply Chain
It’s no secret that the financial security of your business hinges on that of your partners and suppliers. In tough times, everyone is looking for a way to cut costs. Never rely on the insurance cover of your business partners to protect your assets or protect against third-party liability claims. In the event of financial insolvency, a business’s partner organisations could eventually be held liable for claims filed against it. However, healthy, well-insured partner organisations are no substitute for comprehensive liability cover for your business.
Ultimately, in order to protect your company, it may be a smart long-term investment to expand your cover limits. While limiting cover may seem like a valid cost-cutting option, paying for costly claims out-of-pocket due to liability exposures certainly isn’t. A good risk management programme saves money in the end.
Attention to Contracts
In a turbulent economic climate, it’s crucial to have seamless contracts. They should clearly outline the obligation of each party and discuss dispute resolution policies to avoid messy and expensive disagreements.
It is never a good business decision to sign a contract hastily, but especially in a difficult economic time, be sure to look into all the risks and legal ramifications. Small companies who partner with larger companies can be strong-armed into making decisions with which they are not completely comfortable.
For many businesses, change is the best way of reacting to an economic crisis. Willingness to change allows you to explore new customer bases and offer more products or services. While expanding in either of these ways can revolutionise your business and keep you afloat in tough times, it could also expose you to additional liability you had not previously considered.
When you experiment with new products or services, you will inevitably face a learning curve, which puts you at a larger risk of facing product liability claims. Consider purchasing additional lines of cover to protect yourself, as your surplus lines insurance policy may only cover claims arising from one particular product.
Additionally, altering your customer base may put you at risk of unexpected legal concerns. The same product or service may evoke disparate reactions in different sectors of the market. This is another instance in which it is important to be covered for potential liabilities resulting from a change in your business.
The Willis IRM Group incorporating Kennetts Insurance Brokers and Arden Insurance Brokers are one of the leading Transport and Logistics Insurance specialists in Northern Ireland & GB dealing with businesses within the sector on a daily basis. To find out more about our services or to enquire in a bespoke solution for your business, contact our Transport and Logistics specialist, Marc Rice
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