Relevant insurances for haulage business

The kingship of the customer has long been established. The VUCA (volatile, uncertain, complex, ambiguous) environment we currently operate in has further entrenched the kingship, but even kings have advisers, who give them counsel, which can be accepted or jettisoned. That is why I am offering this advice to companies that are into haulage. They own vehicles, employ drivers who drive these vehicles and carry goods for themselves or others. In all these, risks abound, but often haulage companies leave gaps.

The Motor Vehicles (Third Party) Insurance Act of 1945 makes it an offence for anybody to use a motor vehicle on the road without having in place the minimum Motor (Third Party) Insurance to cover the motorist against liabilities arising from third party bodily injuries or death. So haulage companies are bound to take this motor policy at the minimum. But this policy does not cover theft and damage to the vehicle. The sensible thing to do then is to take a comprehensive motor insurance policy to cover these risks. One more thing, the limit for third party property damage, as prescribed by the Insurance Act of 2003, is N1 million. But these vehicles sometimes cause third party damage beyond that amount as a result of their sizes. This makes it imperative for them to increase the limit of their third party damage to give them adequate protection.

That done, the next step is to take insurance to cover any liability arising from theft or damage to the goods they are carrying. Enter Goods-in-Transit Insurance (GIT). A GIT policy covers the goods of the policyholder against fire, theft or accidental damage while the goods are being loaded or unloaded, as well as, while the goods are in transit by road, rail or inland motorways, water, air, or whilst temporarily warehoused within the general course of transit. The above description refers to the all-risk cover of GIT. There is a restricted version that only covers losses arising from accident, collision, or overturning of the conveying vehicle. An all-risk GIT basically takes care of all risks, as far as the goods are concerned, from the point of loading to the point of unloading, all things being equal.

But in life, all things are not equal some of the time. Drivers, for instance, sometimes divert and steal the goods they are conveying. Unfortunately, the theft cover in GIT does not include the driver and other employees of the insured. In such cases, the motor policy and the GIT policy become painfully inadequate. That is where Fidelity Guarantee Insurance comes in. Fidelity Guarantee Insurance is designed to provide cover for the policyholder  against any financial loss sustained as a result of fraud, dishonest acts, theft and forgery, among others, committed by the employees in the course of their occupation or duties.

It is not only the goods the fidelity guarantee insurance covers. If the driver also steals the truck, provided the sum insured is adequate, the insurance company will replace the truck. Remember we said some time ago that comprehensive motor insurance policies carry a FIDELITY GUARANTEE EXCLUSION CLAUSE. The implication is that if your driver or your staff steals your vehicle, the motor policy insurer is not liable because such risks are better covered by Fidelity Guarantee Insurance.

It means the policyholder (employer) must not be part of the theft (collude with his employees) for the insurer to be liable.

Let also add that taking insurance policies for the benefit of drivers can enhance their commitment. One such policy is group life insurance, which is compulsory for employers with three or more staff. Drivers have a higher exposure to accidents by virtue of being on the road frequently. A group personal accident policy is another necessary policy for drivers. Usually, the amount provided for medical expenses in comprehensive motor insurance is too insignificant to take care of grievous injuries, making Group Personal Accident Insurance imperative.

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