Insurance of warehouse premises and merchandise in storage
Today, insurance retains its status as one of the key tools to manage risks inherent to owners and operators of warehouse premises. The core elements of your business can be insured against any emergency and its consequences under Ingosstrakh’s special insurance program tailored to meet the insurance needs of warehouse premises and commodities in storage.
Ingosstrakh is ready to offer to your business a comprehensive insurance program. The program contains special terms of insurance with a view to the specifics of logistic businesses which may be split as follows:
Insurance of warehouse premises
Insurable objects
Warehouse buildings and constructions.
Storage equipment, vehicles and mechanisms.
Internal finishing and engineering communications.
Cost of repair and renewal of buildings and premises.
Furniture, office appliances.
Computer networks, fire suppression systems, security systems.
Glassing, external advertising signs.
Insurable risks
Fire outbreak.
Theft with unauthorized access and robbery.
Damage by water from water supply, sewerage, heating and automatic fire-suppression systems (including damages caused by the activation of fire suppression sprinklers).
Breaking of window glass, mirrors, shop windows.
Explosion of steam boilers, gas reservoirs, cars, machinery and similar mechanisms:
Gas generation plants;
Fire fighting installations;
Heating stations;
Generator sets.
Intended malicious actions of third parties, including:
Intended destruction, demolition or damage of property;
Hooliganism;
Vandalism;
Terrorism.
Breakdown of storage equipment, including maintenance costs:
Lifting cranes;
Travel cranes and ways;
shelves;
cases;
conveyors;
hoisters;
stackers;
dock levelers;
dock shelters;
hydraulic ramps;
tables;
refrigeration and climatic facilities.
Natural disasters.
Insured amount
An amount calculated in the insurance contract limiting the size of indemnity payment by Ingosstrakh in the event of occurrence of an insured event. The insured amount cannot exceed the actual value of the insurable property.
Value of the building, finishing and communications.
Value of the equipment and fittings.
Value of office equipment and electronics.
Commodity insurance
Insurable objects
Commodities in storage owned by the operator of the warehouse or a third party
Insured risks
Damage during loading/unloading.
Damage during relocation within the warehouse.
Loss or damage of commodity through failure of refrigeration facility.
Commodities may be insured against the risk of terrorist attacks.
Insured amount
What makes the storage of commodities specific is that the mix of commodities and the value are under continuous change. There are two ways to calculate the amount to be insured:
By contract (purchase) price - the insurance is based on the amounts determined by the Insurant on the grounds of purchase (contract) price of the commodities including VAT. The indemnification of the loss is made against the Insurant’s invoices and way bills for the purchased commodities damaged/destroyed as the result of the insured event. The calculation of the insured amount is made with a view to the maximum possible quantity of commodities in storage.
By average balance - the insured amount is based on the average value of commodities in storage. The insured amount is limited (100% of available storage capacity). Regardless of seasonal changes, the insurance covers all commodities handled by the Insurant. Thus, the Insurant pays an insurance premium with a view to the actual quantity of commodities available in the warehouse on the date of such payment. The insured amount is subject to quarterly adjustment. Adjustment settlements made once a quarter on bordereau principle. No payment of 100% insurance premium is mandatory.
By first risk - the insured amount is the maximum limit of Ingosstrakh’s liability. Per occurrence of the insured event, Ingosstrakh shall indemnify the client the actual direct losses caused through the loss or damage of insured commodity stock, however, the indemnification shall be within the size of the insured amount. The Insurant can be entitled, provided payment of an additional insurance premium, to increase the size of the insured amount to the original size. The commodities are insured in the amounts stated on the purchase contracts for the commodities which are actually available on the premises of the insured warehouses; however, the insured amount shall be within the above limit. This way of calculating the insured amount is frequently used in insurance of commodity stock under pledge.
Business interruption insurance
This type of insurance protects Insurants from indirect losses incurred as the result of business interruption due to an event insured against in relation to their property.
Insurable objects
Payroll.
Social charges.
Taxes and duties which are not linked to the company’s turnover.
Amortization.
Rent and lease, rent collection.
Interest payable on loans.
Insurable risks
Interruption (suspension) of business as the result of full destruction and/or damage of insured property.
Insured amount
Principle debt under bank loans.
Aggregate expenditures on non-production needs.
Aggregate bank service fees.
Profit lost over insured period.
Aggregate of other fixed costs.
Indemnification period
A fixed period from the date of the insured event resulting in business interruption during which the Insurant is eligible to the compensation of fixed costs and net profit. The period is usually 6, 12, 18 or 24 months.
Franchise
Usually, grace period is applicable (‘no claims’ period): the number of days of interruption (from the date of the insured event) for which no indemnification is paid to the Insurant (the amount is subtracted from the indemnification amount). On average, the ‘no claims’ period is from 7 to 14 days.
Insurance against lost rent
This type of insurance is applicable when warehouse premises are used by Operators or Tenants. It provides protection to the warehouse premises from loss of proceeds from rent as the result of further impossibility to use the premises after the occurrence of the insured event or following full destruction/damage of insured property.
Insurable objects
Proceeds from rent for leased out premises.
Insurable risks
Termination (suspension) of contracts of lease on the grounds of full destruction and/or damage of insured property caused by the effect of any insured event listed in the Insurable risks section.
Insured amount
The amount insurable is calculated with a view to available contracts of lease, as average annual and prorated to the selected indemnification period.
The indemnification period and franchise are similar to the above chapter.
Cargo insurance for the period of transportation (deliveries and procurement)
Insurable objects
Cargos.
Expected sales profit (up to 10%).
Freight and other transportation-related costs.
Insurable risks
There are three ways to insure cargos during transportation.
Liability for all risks.The insurance covers:
Losses caused by damage or full loss of the cargo for any reason.
Losses, expenses and payments for gross average.
All reasonable costs incurred to write off the cargo, determine the scope of general losses and reduce it.
Liability for ordinary average.The insurance covers:
Losses caused by damage or full loss of the cargo in:
fire;
Thunderbolt, storm, tornado and other natural disasters;
Crash or collision of vessels, aircrafts and other means of transport, explosion, damage by seawater.
Losses through missing of a vehicle.
Losses through damage or full loss of cargo as the result of accidents in loading, stacking, unloading and fuelling.
Losses, expenses and payments for gross average.
All reasonable costs incurred to write off the cargo, determine the scope of general losses and reduce it.
No liability for damages, except through crash. The insurance covers:
All risks listed in Liability for ordinary average.
Losses from cargo damage through crash or collision of vessels, aircrafts and other means of transport with each other or with a floating object (including ice), stranding, fire or explosion on board, in an aircraft or other means of transport.
In addition, you can insure your cargo against a terrorist act.
Cargo insurance can be done in compliance with the International Cargo Clause. Consequently, applicable are the clauses of the Institute of London Underwriters identical to the foregoing of Ingosstrakh, in particular, clauses ICC (A), ICC (D), ICC (C).
The insured amount depends on
Value of cargo.
Expected sales profit (up to 10%).
Cost of transportation.
Why is it favorable for you and suitable for your personnel
It is an opportunity to have a simple policy (for minor or one-off shipments) or a general policy, which covers all declared shipments regardless of their frequency or destination.
It is an opportunity to obtain continuous coverage (without coverage interruption on the border).
Cargo insurance with coverage of commodities en route over a period of up to 2 months.
Quick and quality settlement of claims through engagement of on-staff and outsourced average commissioners all over the world.
Automatic transfer of coverage from cargo insurance onto storage on the premises of plants or warehouses.
Assistance by Ingosstrakh team in choosing the route of transportation, transportation and forwarding agents.
Liability insurance
Insurance of liability for damage to merchandise in storage. Our experience and practice show that frequently classic insurance of merchandise in storage does not provide full protection against various risks which may be faced by owners or operators of warehouse premises. For example, the damages to goods during relocation, loading or unloading may trigger material losses, and such probable damages will not be covered by a property insurance contract. Such risks are insured against by liability insurance.
Liability insurance of temporary storage warehouses.Along with the payment of all custom duties liability insurance is one of the requirements to warehouse owners for inclusion in the register of the Federal Customs Service of the Russian Federation and, therefore, enables them to operate as owners of temporary storage or customs warehouses. Besides, a liability insurance contract is a reliable financial tool protecting the insurant against losses which may potentially result from the damages caused to property interests of third parties.
Customs brokers liability insurance. In addition of the liability insurance of owners of temporary storage warehouses and motor vehicles, Ingosstrakh offers to cover risks of customs brokers. According to the contract terms, insurance indemnity becomes payable in the event of the customs broker’s liability for damages to the party such broker represents while doing business if the damages are caused due to the broker’s default on or unduly performance of contractual commitments to the represented party. Ingosstrakh also offers liability insurance of TIR carnet holders transporting cargos in compliance with the Customs Convention on the International Transport of Goods under Cover of TIR Carnets, 1975 .
Liability insurance of operators of hazardous production facilities. This type of insures provides indemnity against liability as may arise during the operation of hazardous production facilities located within the premises of the warehouse (e.g. hoisting equipment, pressurized vessels, boilers, gas supply systems etc). This type of insurance is compulsory by virtue of Article 15 of Federal Law 116-FZ. The list of insured events includes health or property damages to third parties (except employees of the Insurant) and/or environmental damages as the result of an accident at any time during the term of the insurance contract that takes place at a hazardous facility, such event to be confirmed by a respective court resolution.
Civil liability insurance for operation of premises, territories, buildings and equipment. Insurance practice shows that a minor leakage in the water-supply system of the insurer’s client triggers multi-million costs to repair neighboring buildings and premises and to renew antique furniture damaged by water; in other instances, minor fire outbreaks resulted in serious health damages and damage of equipment, elements of buildings. Frequently, the falling of a piece of ice from the roof, cracked plaster from the façade or an object from a window may cause various damages to property, health and life of third parties in adjacent territories, garages or parking lots. The specter of risks in operation of premises, territories and equipment is very vast. The liability for restitution of damages caused in such instances may amount to colossal amounts, and the list of similar examples can be very extensive.
Our Contacts
If you have any question or need any additional information, please do not hesitate to contact our Property and Liability Insurance Department:
