It is obvious that any broker must have an in-depth understanding of any insurance product that is sold to clients, and it is therefore disturbing to find that occasionally brokers are unfamiliar with the workings and application of the very policies that they have recommended to clients. While most Senate brokers are fully conversant in the standard Senate policy, it is nevertheless useful to reiterate its important points.

We believe that providing a basic crash course in each of the main types of policy wordings will assist both new brokers as well as new employees at existing Senate brokerages to quickly master the main points. In each issue of On The Move we will focus on a specific type of policy and later editions will include the Transport Broker Contingent Policy, the Hijack Excess Buy-Down Policy and various derivatives and non-standard variations such as Pure Carriers Liability Policies.

For the purpose of this issue we look at the Standard Senate Policy: what it is intended to do, how it works and what the pertinent points to remember are.

Purpose of the Policy

Transport companies move other people’s goods. While there is a degree of commonlaw liability on a transporter (see the Senate website and click on Suggested Methods) to pay for any damaged goods, this common-law position is usually overridden by an agreement between the transporter and the goods-owner that the transporter must accept full responsibility for the goods if the transporter wants the business. We will automatically assume that a transporter has accepted responsibility for the goods with most or even all of his customers and it is for this reason that the transporter is required to take out insurance to pay for any loss or damage caused to his customer’s goods while he is transporting them. Therefore if he damages his customer’s goods this agreement between him and his customer gives the transporter an insurable interest in the goods.

How are premiums calculated?

When asked to quote, there are a number of factors which will influence the premium charged:

Limit: the higher the load limit requested, the higher the insurers’ risk per any one truckload.

Fleet size: the more trucks there are in the transporter’s fleet moving goods around, obviously means that more goods are being moved. This means that insurers are covering more loads and therefore more risk than a smaller fleet could transport.

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