Getting insurance for refrigerated-goods, livestock and grain carriers.
Truck insurance is an important form of cover for owner-drivers and businesses that employ drivers to haul goods.
With livestock, grain and refrigerated goods, there are some unique challenges involved in transport, such as strict hygiene standards and additional equipment. There is also the risk of additional costs in an accident, such as needing to round up livestock.
If you or your business carries livestock, grain or refrigerated goods, then you may need to look at specific policy features to meet these challenges.
What am I covered for?
In general, carrier insurance may cover the following:
- Damage to the vehicle or related equipment resulting from accidents, extreme weather and other insured events
- Damage to the goods being carried when the damage is the result of an insured event
- Liability cover to insure drivers or a business owner against third-party property damage or injuries for which they are liable, such as an at-fault vehicle accident or a worker being injured while unloading a truck.
- Personal driver insurance with features such as death benefits and repatriation in the event a driver is injured far from home
- Business insurance to help cover loss of earnings or other business interruptions
- Other expenses such as debris removal costs, emergency services attendance, unloading and reloading of goods into a different truck following breakdown and more.
- Fire and explosion
- Flood, storms, lightning, hurricanes and similar extreme weather events
- Theft, attempted theft, vandalism or other malicious damage by a third party, hijacking or armed holdup
- Accidents such as collisions, overturning, jackknifing, collapse of a bridge or other specified events
- Industrial or labour disturbances such as strikes, lock outs or other civil commotions
- Loss while being transported by sea as the result of jettisoning or other actions
- Impact damage caused by cargo movement or the shedding of the load
- Damage to cargo incurred while loading or unloading
- Theft, pilferage and non-delivery
What additional features should I consider?
Livestock, refrigerated-goods and grain carriers have some additional challenges that require additional insurance features to help cover them. If you transport any of these, you may want to take steps to ensure you have more specialised cover for these goods, rather than general carrier insurance.
Additional features to look for can include the following:
- Reefer breakdown. This feature insures refrigerated-goods carriers against cargo spoilage caused by breakdown, accident or electrical failure.
- Deterioration of goods due to temperature. This insures against damage, deterioration or loss of goods that require temperature-controlled transport. If the temperature of the transport falls outside of the documented temperature range required to transport those goods, for at least a set period of time (such as 4 hours), you can claim resulting damage. Depending on the policy, this might also cover you in the event of operator error, such as setting the temperatures incorrectly. In the case of grain, or other refrigerated goods, this can also cover deterioration caused by temperature change resulting from a lack of airflow caused by mismanagement of interior bulkheads.
- Spoilage cover. This feature insures against the loss of perishable goods due to spoilage following an insured event.
- Livestock wandering, mustering and agistment. This feature insures livestock carriers against the cost of recovering, mustering and safely holding livestock following an insured event until it is restored to its original condition or can be loaded into replacement transport.
- Humane slaughtering. This feature provides insurance for the value of livestock that needs to be destroyed for humane reasons following an insured event.
- Fumigation and decontamination. Carrier insurance can cover the cost of fumigation and decontamination if you are legally responsible for these costs and the authorities have ordered your cargo decontaminated or fumigated. This can include all reasonable costs and charges, additional freight charges and loss or damage to proximal goods caused by the decontamination process.
What’s not covered: Limitations and exclusions
All insurance has some limitations and exclusions. It’s important to note that with many policies you will have the following limitations and exclusions:
- Livestock does not generally include bloodstock, stud animals or prize animals.
- There is generally no cover for any livestock that was not in good health or fit to travel prior to loading.
- There is no cover for failure of refrigeration if you have not regularly serviced and maintained your system.
- There is no cover for loss caused by moths, mould, mildew, vermin or other pests.
- You cannot claim for ordinary leakage, wear and tear or loss in weight or volume of goods.
- If you are transporting anything legislated as a dangerous good, then you may not be covered unless you specifically raise this with the insurer.
There are also some limitations on the amount that you may claim back. The maximum limit is typically around the actual value of the insured items. This might include the following:
- The invoice value of a load
- A full replacement of all cargo with an equivalent load, such as the same number of livestock of the same age, breed and condition, up to a set limit.
- The market value of a truck and trailer
- The agreed value of a truck, trailer, personal possessions and trade tools.
Also, unless you are specifically covered for it in your policy, you might not be able to claim for losses resulting from the following:
- Mishandling of goods
- Improper use of equipment
- Improper storage, loading or restraining of goods
What limits apply?
Limits and sub-limits can apply to the maximum amount you can be reimbursed for different types of loss and can vary between insurers and policies. For example, you might find a total limit of $30 million for third-party liability, with a sub-limit of $250,000 for hazardous goods liability.
In many cases, the maximum limit of a certain cover type might not be enough to cover the full costs, and depending on the situation, there may be more than one applicable limit and different conditions. For example, one policy might pay up to $25,000 in total for livestock mustering and agistment costs following an accident.
This might be the maximum total amount, but the amount paid might be less if a replacement livestock carrier arrives before the agistment costs come to $25,000.
Where agistment is necessary to restore injured livestock to their pre-loss condition, the limits might be different. Here an insurer might only pay up to the lesser of the following amounts:
- The animals’ sum insured
- The loss due to agreed depreciation had the animals been sold as injured livestock. In other words, if you could only sell the injured animals at half their sum insured, then the insurer will only pay out up to half of the sum insured for agistment costs.
Exclusions affect what you can and cannot claim under a policy, while limitations affect how much you can get back. It’s important to be aware of both when considering value for money.
What's the excess like?
The excess is the first portion of a claim that you need to pay. More than one excess may apply to a single claim and may vary by insurer and policy.
The following excesses may be included in your policy:
- Basic excess. This is the standard excess that comes with policies, and you are often able to adjust your excess to affect your premiums. For example, you can choose a higher excess for lower premiums or vice versa.
- Inexperienced or young driver excess. This is an additional excess that may be payable for claims where the driver at the time of the event was under the age of 25 or was a relatively inexperienced truck driver.
- Distance excess. Policies will have a specific radius in which you can operate with full cover. An additional excess may apply for claims made outside this radius.
- Tipping excess. An additional excess may be payable for damage or loss that occurred while tipping a load.
- Special excess. Other excesses may be involved for certain claims or in other special situations on a case-by-case basis.
What affects what I pay?
The following situations may affect your premiums:
- Your chosen level of cover and policy features
- The market value, agreed sum insured or invoice value of insured vehicle(s), equipment, cargo, personal effects and other inured items
- Your excess
- Your, or your driver’s, driving history, age and driving experience
- Other factors that affect the risk of an accident, such as your location
What to look for when comparing policies
You will want to look at the following conditions when comparing different policies:
- Whether livestock, refrigerated goods, grain or other perishables are covered.
- How employees, contractors or other workers might be covered to drive a vehicle or use insured equipment.
- How vehicles under finance are covered.
- Ability to bundle cover with other options.