Close to one billion tons of freight travelled by road in South Africa, yet despite the significant volume moving across the country, many businesses remain exposed to escalating road risks.
From hijackings and cargo theft to accidents and driver fidelity, a single incident can cost your business thousands in lost revenue and client trust.
According to Rishai Neerachand, Executive Head of Business Insurance at Miway Insurance Limited, all businesses that transport goods by road, especially local small and medium enterprises (SMEs), must have the appropriate Goods in Transit (GIT) and vehicle fleet insurance cover. “GIT insurance is critical for SMEs and growing logistics operators because the risks associated with transporting goods continue to rise and most businesses have no financial safety net to absorb such losses.”
Neerachand explains that GIT cover protects businesses against the most common incidents while goods are being transported by road, while marine insurance extends to goods transported by rail, air or sea. “The risks typically covered by GIT include fire, acts of nature, theft and accidents.”
However, many businesses often underestimate their risk exposure, especially regarding carry limits. Load values or annual carry limits, whether goods were in the business’s custody and control at the time, and whether contingency cover applies are all frequently misunderstood.
“Without the right insurance, SME’s will have an immediate drain of cash flow to cover a loss, while the expected revenue from lost or damaged goods can no longer be realised, and in cases where goods were intended for a contract, the business may have to pay high, expedited costs to replenish stock.”
Alongside GIT cover, businesses that operate multiple vehicles should consider fleet insurance rather than insuring each vehicle individually. “Fleet insurance allows multiple vehicles to be covered under a single policy that can be tailored cost-effectively to match specific needs,” he explains.
“Where a small, fixed group of employees operates the vehicles, companies may opt for named-driver policies. However, pool driver options are often better suited to businesses with high staff rotation or unpredictable driver schedules, allowing for greater flexibility.”
To determine the correct cover limits, businesses should evaluate their average and maximum load values, as well as average number of trips made by drivers daily, monthly and annually. “These policy limits must be reviewed and updated as the business expands or increases its routes, which could even have cross-border implications,” Neerachand adds.
Vehicle tracking and telematics are changing the game as these provide real-time data on how, when and where a vehicle is driven, allowing insurers to re-rate a personalised risk profile accordingly. Essential though is appointing, training and retaining qualified drivers.
Businesses can also use technology to strengthen risk protection by installing cameras, telematics, tracking devices, and a robust fleet management system, which can reduce risk and lower insurance costs.
“By combining the right insurance cover with effective risk management measures, businesses can truly protect both their assets and cash flow,” he concludes.
