Procurement Glossary
Transport insurance: protection and risk management in logistics
November 19, 2025
Transport insurance is a key component of risk management in procurement and protects companies from financial losses due to transport damage. It covers risks during the transportation of goods and ensures the continuity of the supply chain. Find out below what transportation insurance covers, what methods are available and how you can optimally manage risks.
Key Facts
- Transport insurance protects against damage, loss and theft during the transportation of goods
- Scope of cover varies depending on the type of insurance, from basic cover to fully comprehensive cover
- Premiums are calculated based on the value of the goods, transport route and risk assessment
- Integration in Incoterms regulates responsibilities between buyer and seller
- Digital solutions enable real-time monitoring and automated damage reporting
Contents
Definition and importance of transport insurance
Transport insurance covers all insurance services for the protection of goods during transportation between different locations.
The basics of transport insurance
Transport insurance covers physical damage, loss and theft that may occur during the transportation of goods. It is divided into different types of cover:
- Basic cover: protection against natural hazards and accidents
- Extended cover: additional protection against theft and vandalism
- Comprehensive cover: Comprehensive cover including war and strike risks
Transport insurance vs. product liability
While transport insurance covers damage to the goods themselves, product liability insurance protects against damage caused by defective products. Transport insurance takes effect during transportation, regardless of the subsequent use of the product.
Importance in Procurement
For purchasing organizations, transport insurance is a critical tool for minimizing risk. It enables predictable costs and protects against unforeseeable losses that could disrupt the supply chain. Integration into delivery conditions clearly regulates responsibilities.
Process and control of transport insurance
The systematic implementation of transport insurance requires structured processes and clear responsibilities.
Risk analysis and needs assessment
The first step involves a comprehensive assessment of all transportation risks. This involves analyzing factors such as the value of the goods, transport routes and means of transport:
- Evaluation of transport routes and their specific risks
- Analysis of product categories and their susceptibility to damage
- Consideration of seasonal and regional risk factors
Insurance selection and contract design
The optimum insurance solution is selected by comparing different providers and cover concepts. Important contract components include sums insured, deductibles and exclusions. Integration into commercial documents ensures legal clarity.
Claims management and settlement
Efficient claims management minimizes downtime and speeds up settlement. This includes the immediate reporting of damage, documentation and coordination with all parties involved. Modern systems enable the automated recording and forwarding of damage reports.
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Operational key figures
Systematic key figures enable the continuous monitoring and optimization of transport insurance.
Claims ratio and settlement time
The loss ratio measures the ratio of the amount of loss to the insurance premium and shows the efficiency of risk management. The average settlement time is also recorded:
- Loss ratio = (loss amount / premium volume) × 100
- Average settlement time in days
- Proportion of successfully settled claims
Cost efficiency and coverage ratio
The insurance costs are set in relation to the transported value of goods. The coverage ratio shows what proportion of the transport risks is actually covered. These key figures support strategic decision-making in insurance optimization.
Effectiveness of preventive measures
The effectiveness of loss prevention measures is measured by the development of loss frequency. Investments in safe packaging and transport monitoring are reflected in reduced damage figures and lower insurance premiums.
Delivery and control risks for transport insurance
Transport insurance involves specific risks that require careful analysis and proactive management.
Gaps in cover and exclusions
Incomplete insurance cover can lead to considerable financial losses. Typical exclusions include war damage, natural disasters or improper packaging:
- Detailed review of all insurance conditions
- Identification of critical gaps in cover
- Development of alternative hedging strategies
Complexity of international transportation
Cross-border transportation is subject to different legal systems and regulations. The coordination between different insurers and the consideration of local regulations increase the complexity considerably. International delivery conditions must be precisely defined.
Claims settlement and liquidity risks
Delays in claims settlement can lead to liquidity bottlenecks. Lengthy procedures affect the supply chain and require alternative financing solutions. Clear documentation and professional claims settlement minimize these risks in the long term.
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Practical example
An automotive supplier implements a comprehensive transportation insurance strategy for its European deliveries. The company first analyzes all transport routes and identifies high-risk routes. Basic cover is selected for standard shipments, while sensitive electronic components receive fully comprehensive insurance. IoT sensors monitor critical shipments in real time and automatically report any deviations. Integration into the ERP system enables the automatic generation of insurance documents for each delivery.
- 30% reduction in the loss ratio through preventive measures
- Reduction of the settlement period from 14 to 7 days
- 15% cost savings through risk-adjusted premium structure
Trends & developments in transport insurance
Transport insurance is constantly evolving and integrating new technologies to minimize risk and increase efficiency.
Digitalization and IoT integration
Intelligent sensors and IoT devices enable real-time monitoring of transportation. These technologies continuously record data on temperature, humidity, vibrations and location:
- Preventive damage avoidance through early warning systems
- Automated documentation for insurance claims
- Reduced premiums due to demonstrably lower risks
AI-supported risk analysis
Artificial intelligence is revolutionizing risk assessment in marine insurance. Machine learning algorithms analyze historical loss data, weather conditions and traffic patterns for precise risk prediction. This enables individualized premium design and proactive risk minimization.
Sustainable transport insurance
Environmental aspects are becoming increasingly important. Insurers offer discounts for environmentally friendly means of transportation and sustainable packaging solutions. Green logistics concepts are supported and promoted by corresponding insurance products.
Conclusion
Transport insurance is an indispensable component of modern risk management in procurement. Systematic integration into supply chains protects against financial losses and ensures planning security. Digital technologies and AI-supported risk analysis open up new opportunities for cost optimization and loss prevention. A professional transport insurance strategy makes a significant contribution to the stability and efficiency of the entire supply chain.
FAQ
What does transportation insurance cover?
Transport insurance protects against damage, loss and theft during the transportation of goods. Depending on the type of cover, natural hazards, accidents, vandalism and, in the case of comprehensive cover, war and strike damage are also included. Exclusions such as improper packaging or normal wear and tear must be taken into account.
How is the insurance premium calculated?
The premium calculation is based on the value of the goods, the transport route, the means of transport and the selected cover. Risk factors such as frequency of theft, weather conditions and political stability of the transit countries are included in the assessment. Preventive measures can lead to discounts.
Who is liable to pay insurance for international transportation?
The insurance obligation is based on the agreed Incoterms. In the case of CIF deliveries, the seller bears the insurance responsibility, in the case of FOB terms, the buyer. A clear contractual regulation prevents gaps in cover and double insurance between the parties.
What advantages does an annual policy offer over individual insurance policies?
Annual policies offer cost savings through volume discounts and simplify administration considerably. They guarantee seamless protection without individual registrations and allow flexible adjustments in the event of changes in transport volumes. Automatic cover reduces the risk of forgetting to take out insurance.
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