6 Reasons You Need Cargo and Stock Throughput Coverage
Stock throughput policies (STP) were designed for companies that import, distribute, or export merchandise around the world. However, the name seems a bit deceiving, and your clients may not realize they can benefit from these plans. If your clients are looking for a better STP package, our team at Arrowood Insurance Services can help you find the best option through Mitsui Sumitomo. Our team of experts will review your client’s insurance needs and provide you with a personalized quote, giving your client the coverage they need and keeping their business secure.
What is a Stock Throughput Policy?
Stock throughput insurance protects “all moveable goods or inventory that are subject to your client’s trade.” This means that they may need to insure everything from a raw product to a finished item and everything in between. The six reasons listed below detail why your clients need cargo and stock throughput insurance, what it covers, and why it is so important. There is a way to protect every aspect of your client’s business, and through Arrowood, you can access Mitsui Sumitomo to obtain the appropriate coverage.
1. Ocean Cargo
Oceangoing vessels ferry cargo across the open seas, which can be dangerous in and of itself. While the ship owner or charterer can insure the vessel, all items placed on the vessel should also be insured. From full container loans to special handling services, less than container loads, sea/air services, and import/export services, your clients offer a range of freight options, but they must cross the sea to complete the job. If those items are damaged during loading, at sea, or during unloading, your clients need insurance that can repair or replace each item.
2. Inland Transit
Inland transit insurance is another part of the STP package that protects these very same items when they are traveling by truck or rail. Your clients, again, are trusting a myriad of transport companies with their items—from raw materials to finished goods—and they need coverage that can repair or replace each item in the event of a loss.
3. Property and Storage
One of the greatest advances of the 20th Century is the Conex box (later modified into the modern shipping container.) They stack together perfectly, and they can be left in storage for long periods of time. Should those containers tip over or suffer damage, your clients need insurance that will repair or replace all the items inside. Property and Storage coverage can repair or replace the container if it’s your client’s property. Plus, these policies extend to other locations where items are stored before use. Your client must protect their business from losses if an item they shipped months ago is still in storage and hasn’t yet been used. When the recipient opens the container and discovers the items are damaged or destroyed, they will require a replacement or refund from your client. With Property and Storage coverage, you can easily file a claim against the policy on their behalf.
4. Raw Materials
At every stage of production, STP packages protect the goods involved, even if they’re raw materials that hardly resemble a finished product. Your client is responsible for transporting those raw materials to their final destination. Insuring raw materials with STP insurance is the only way to protect your client from spoilage, damage, or impurities that were not readily apparent.
5. Works in Progress
As the manufacturing process continues, stock throughput coverage protects items that become works in progress. This means that your client is protected if these items were already used during production and the recipient is displeased with the state of those materials. Our team at Arrowood can help you craft a “process clause” that offers a level of protection most insurance policies cannot provide.
6. Finished Goods
While an STP package does not protect goods that have been processed into finished products, it does protect your client from claims that the items were inferior. (Ex: The recipient has already hewn those materials into a new product, and the coverage no longer applies.)
Remember, at this point, any issues with raw materials generally pertain to the process used by the recipient—not your client’s handling of said materials.
Who Needs STP Coverage?
Generally, STP coverage is for:
· Apparel manufacturers
· Footwear producers
· Manufacturers of dry or shelf-stable foods and drinks
· Home goods manufacturers
· Medical device firms
· Aerospace manufacturers and more
Contact Arrowood Insurance Services for More Information on Stock Throughput Insurance For more information on stock or cargo throughput insurance from Mitsui Sumitomo, reach out to our team at Arrowood Insurance. We can provide a full coverage review, scale protection for their business, and account for all the items they have in transit, as well as provide excess cargo and excess stock coverage offering the best policy to meet your client’s needs.