UIIC AO 2016 – Essay – Transit Insurance in E-Commerce

Goods and materials are one of the most
valuable assets in a business and therefore it is important to protect them
against loss, damage or theft when they are in transit. Loss or theft of goods
during transit and damage caused by accidents during transit are common
inclusions. One of the most important objectives
of the Courier Companies is to ensure that the goods reach the customers on
time while maintaining a reasonable cost too. Based on a recent research by
CRISIL, 28% of all products are returned from online purchases as they were
delivered in a damaged condition.

Thus it is necessary to
insure the goods while they are in transit. If the product is involved in a car
accident or stolen, it causes delays. The insurance can provide reimbursement
to the business if the owner loses money due to a shipping error. Content
coverage is also needed if the company produces its own product in its
warehouse. It is
most likely that if goods or materials are stored in a van overnight, goods
will need to be kept in a locked garage or compound with secure walls and
locked gates. This could be a determining factor in whether the insurance
company will cover the cost of any damage or theft. If an employee is injured while doing the job, insurance coverage helps
with medical expenses.

By giving coverage to that
employee leads to lessen company expenses. If the business works with
intangible property like software, data etc. the owner of the business could be
sued for the rights. Then insurance helps cover the company’s legal defense.

In a nutshell, when security questions arrive
in e-commerce, those problems can only be resolved with the help of nothing but
insurance.

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