Why Should Cargo Worth Billions Be Insured While in the Warehouse?

Every shipment of high-value goods carries significant risks, even before the goods leave the warehouse. Fire, theft, and even human error during handling can cause losses reaching billions of rupiah. Therefore, it is crucial for exporters, importers, and logistics industry players to understand the importance of cargo insurance protection from the shipping preparation stage. This coverage is known as warehouse-to-warehouse coverage. With this protection, your assets are protected from the warehouse of origin until they reach their final destination.

As a company experienced in handling high-value logistics risks, L&G Insurance Broker is ready to help you secure your shipment from warehouse to final destination with maximum protection.

Therefore, before the risk comes, contact L&G Insurance Broker now at 08118507773 for free consultation before risk.

Financial Risks Begin While Goods Are Still in the Warehouse

Many exporters or cargo owners assume that risks only arise when goods are transported to port or loaded onto a ship. In fact, the majority of major marine cargo insurance claims originate from incidents occurring in storage. This is often due to the high volume of goods and the intensity of operational activities.

Types of Risks in Warehouse Before Shipment

Warehouses are the primary location where high-value goods are stored in large quantities and for extended periods. This is where potential risks often arise:

• Fires caused by electrical short circuits, overheating, or flammable materials. Losses from warehouse fires can amount to the total loss of all stored assets.
• Internal and external theft, especially of electronics, industrial machinery, or high-value mining materials, poses a significant risk of theft in transit warehouses in the logistics industry.
• Physical damage due to improper handling during packing or loading. Human error such as misplaced pallets, misplaced forklifts, or packaging that does not meet export standards.

Losses from a single incident can reach billions of rupiah. Without insurance coverage, the entire value of the goods is the owner’s responsibility, and there is no guarantee of replacement. This is where cargo insurance with warehouse-to-warehouse coverage comes in, providing protection from the time the goods are in the warehouse until they reach the recipient.

Understanding the Concept of “Warehouse to Warehouse Coverage”

In the world of marine cargo insurance, the term “warehouse-to-warehouse coverage” is a crucial clause often overlooked by novice exporters. This type of policy provides door-to-door protection, starting from the origin warehouse, throughout land and sea transportation, and finally to the destination warehouse.

In other words, this cargo insurance policy covers the risk gaps that typically occur when goods move from one point to another in the logistics chain.

For example:

• Initial Warehouse: Goods begin to be packed at the factory warehouse in Surabaya. (Protected)
• Local Transportation: Transported by truck to Tanjung Perak port. (Protected)
• Sea Freight: Shipped by sea to Singapore (Protected).
• Final Transport: Forwarded to the destination warehouse at Jurong Port. (Protected)

Throughout the entire journey, cargo insurance protects your goods from various physical risks, such as damage, loss, theft, and natural disasters. Without this clause, risks in the warehouse prior to shipment would not be covered. Consequently, if a fire breaks out before the ship departs, the company would have no claim at all, creating significant financial risk.

Real Example: Rp10 Billion Loss Before the Ship Sails

A heavy equipment company in Kalimantan experienced a major incident. They shipped mining machine components worth over Rp10 billion, which were stored in a port warehouse while awaiting a scheduled ship. Before the scheduled shipment, the warehouse caught fire due to an electrical short circuit. All components were completely burned.

When the company filed a claim, the insurance company rejected it because their policy only covered risks during transit, not from the time the goods were in the warehouse. This meant the billions of rupiah in losses had to be borne solely by the goods owner. Cases like this are not uncommon. Many exporters purchase cargo insurance without understanding the duration clause, assuming all risks are automatically covered.

This is where an experienced insurance broker like L&G Insurance Broker plays a crucial role in helping companies understand every detail of the policy to eliminate any loopholes that could be detrimental when claiming cargo insurance. L&G Insurance Broker ensures that the warehouse-to-warehouse coverage clause is included and understood by clients.

The Role of Insurance Brokers in Determining the Appropriate Coverage Amount

For cargo worth billions, determining an accurate insured value is crucial in cargo insurance. This value must reflect the actual price of the goods, freight, insurance, and a reasonable profit margin (CIF Value + 10%).

However, in practice, many companies write values ​​that are inappropriate, too low (under insured) or even incomplete.

• Underinsurance: When a claim occurs, the compensation received is much less than the actual value of the loss (proportional compensation). This can cause significant damage to a company’s cash flow.
• Calculation Error: Writing a value that does not include logistics or freight costs also causes the cargo value when claimed to be inaccurate, harming the exporter or importer.

L&G Insurance Brokers are here to help ensure every insured value is calculated professionally. With comprehensive risk analysis and a deep understanding of the logistics industry, L&G ensures that your cargo insurance policy truly protects the full value of your assets. Brokers also play a crucial role in helping companies choose the appropriate coverage type, such as All Risks Coverage (ICC A) for high-value, sensitive cargo.

Cargo Loss Simulation Without Insurance and Premium Solutions

A company shipped heavy equipment worth Rp 10 billion from Jakarta to Balikpapan. During loading at the port warehouse, the equipment was damaged by a forklift falling. Without cargo insurance with warehouse-to-warehouse coverage, the shipper would bear all repair or replacement costs. If the damage reached 50 percent of the value of the goods, the company would face losses of up to Rp 5 billion.

Compare this to cargo insurance premiums, which are only around 0.1–0.3 percent of the value of the goods, or around IDR 10–30 million. In other words, a small fee can save a company billions of rupiah in assets. L&G Insurance Broker helps reduce these premium costs without compromising coverage. This is why insurance for cargo worth billions is essential even before the goods leave the warehouse.

How L&G Insurance Broker Handles Claims Quickly and Accurately

One of the key advantages of working with a heavy equipment and logistics insurance broker like L&G Insurance Broker is their ability to handle claims quickly and efficiently. L&G is your strategic partner when risks arise.

The L&G team has extensive experience in handling large claims in the marine cargo insurance sector, including billion-dollar items such as heavy equipment, export commodities, and factory components.

The claims process carried out by L&G Insurance Broker includes:

• Initial Incident Inspection: Immediate post-incident assistance and field inspection.
• Legal Documentation: Collect and verify complete Bill of Lading, Packing List, invoice and technical damage report documents.
• Professional Negotiation: Negotiating directly with the insurance company to ensure payment according to the actual value of the loss.
• Disbursement Monitoring: Monitoring the disbursement of claims until the funds are received by the client.

With this approach, clients do not have to face lengthy bureaucracy and can return to focusing on business activities.

Tips for Choosing Billion Dollar Cargo Insurance

Before sending high-value items, make sure you pay attention to the following:

• Use an insurance broker who is experienced in logistics and export-import (L&G Insurance Broker in South Tangerang).
• Make sure the policy includes a warehouse to warehouse coverage clause for full protection from the warehouse.
• Choose ICC Clause A (All Risks) for high value and sensitive cargo.
• Don’t forget to renew your policy according to the actual delivery schedule; delays may void your policy.
• Understand the policy exclusion clause to avoid misinterpretation when claiming cargo insurance.

By paying attention to these points, you can ensure that goods worth billions are completely safe until they reach the recipient, minimizing unavoidable logistical risks.

Conclusion

Every logistics entrepreneur, exporter, and heavy equipment owner must be aware that the risk of loss or damage to high-value goods can occur at any time, even before a ship departs. Losses occurring in the warehouse or during local transit to the port can result in billions of rupiah in losses. By having cargo insurance that includes warehouse-to-warehouse coverage, you ensure the entire delivery chain is fully protected, maintaining your company’s financial stability.

Selecting the right policy and handling complex claims requires expertise. Experienced insurance brokers like L&G Insurance Broker offer strategic solutions. L&G not only helps companies select the best Marine Cargo Insurance policy but also acts as an advocate in the event of a claim, ensuring effective asset protection and prompt and transparent resolution. L&G Insurance Broker is your trusted partner in logistics and industrial risk management in South Tangerang and throughout Indonesia.

Don’t wait until risk hits your business and destroys billions in assets. Proactive action is key to business sustainability. Contact L&G Insurance Broker now at08118507773for a free consultation before the risk, and ensure that every cargo worth billions of yours is completely protected from start to finish of the journey.