SEVENTEEN TYPES OF INSURANCE – HOW BROKERS HAVE CHRISTMAS TOYS COVERED
20 December 2017
- JLT Specialty estimates complex Christmas toys could be exposed to up to 17 types of insurance
- Insurance industry helping to simplify and reduce risks for manufacturers so they can ensure toys arrive safely
JLT Specialty, the specialist insurance broker and risk consultant, has estimated that it could take up to seventeen different types of insurance cover to ensure that a child’s toy arrives safely in time for Christmas.
With toy manufacturing set to generate $10.1 billion in 2017, China is currently the largest manufacturer and exporter of toys in the world. Toys being exported to the UK will be exposed to a variety of different risks as they travel a distance of nearly 8000km between factories in China to toy shop shelves in the UK.
JLT Specialty estimates that the seventeen different types of insurance that will ensure the toy is safely delivered to the UK are as follows:
- Intellectual Property Insurance
Even before the toy is made, manufacturers take out this insurance to protect against copyright, trademark or patent infringement claims. It also designed to respond to legal costs if they have to defend themselves against allegations that products are infringing the intellectual property rights held by another party.
- Business Interruption cover
This will cover any losses incurred during the manufacturing stage as a result of flood, machine breakdown, etc.
- Suppliers extension cover
An insurance to insure any interruption to the supply of raw materials or goods from third parties used in the manufacturing of the toy.
- Customers extension cover
This insurance covers the possibility that a customer wants to break an agreement and no longer wants the receive the toy once it has been manufactured.
- Product liability cover
Usually taken out by the manufacturer, product liability insurance covers any damage or injury to third parties resulting directly from the toy.
- Product recall cover
This insurance covers costs incurred if the toy has to be recalled at any stage. It will also pay for any associated media, advertising, or social media used in the recall process, as well as the replacement of the toy.
- Crisis management cover
Should the toy be recalled or if there is any negative publicity as a result of the toy malfunctioning, this gives manufacturers access to a team of professionals to help mitigate any potential impact on their business.
- Political risk insurance
This will cover any losses incurred by the manufacturer if they are unable to export the toy owing to political conditions – such as a coup or other political unrest.
- Stock throughput cover
This covers the manufacturer’s losses if the toy is damaged or lost throughout its journey from the factory to its final destination in the UK.
- Container liability cover
Insures the toy against any damage or loss when it is packed into a container.
- Hull & machinery insurance
Once the toy sets sail for the UK, this insurance covers any damage or loss to the ship it is travelling on.
- Protection & indemnity insurance
Covers any third party liability as a result of damage or loss to the ship.
- Port terminal liability
Insures against any damage or loss to the toy when it has completed its journey overseas and arrives at a port.
- Stevedore liability insurance
A stevedore (a person employed at a dock to load and unload ships) is covered by this insurance, and so this covers the toy as it is loaded on to the next stage of its journey – usually by crane.
- Rolling stock cover
As our toy continues its journey by rail to a distribution centre, this insurance will cover any damage to the toy, as well as any third party injury and property damage by the rail freight operator.
- Premises insurance
Once the toy has reached a distribution centre, this insurance covers any damage or loss as a result of flood or fire at the premises.
- Fleet insurance Now on its last leg of the journey, the toy is moved by road to the toy shop. Should the van or lorry it is travelling on be stolen or involved in an accident, then this insurance will cover any resulting loss or damage.
Nick Williams-Walker, Chief Operating Officer for JLT Specialty, said: ‘While ordering goods manufactured overseas becomes easier through on line retailing many consumers may be surprised by how complicated and onerous the process can be for manufacturers - especially if it involves dealing with multiple countries’ rules and regulations.
Supply chains are becoming more complex and manufacturers face an increasing number of risks when exporting overseas. This is where the insurance industry plays an important part by helping to simplify and reduce risks allowing manufacturers to concentrate on the important task of making sure that toys arrive safely under the tree for children to unwrap on the day.’
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PR Manager, JLT Group
+44 (0)20 20 7895 7705
NOTES TO EDITORS:
• This list covers insurances that directly affect the journey of the toy, and does not include other types of insurance such as Professional Liability cover, Directors & Officers insurance, etc).
• Statistics from ‘Toy Manufacturing in China: Market Research Report’ published by IBISWorld. The full report is available here.
About Jardine Lloyd Thompson
Jardine Lloyd Thompson is one of the world’s leading providers of insurance, reinsurance and employee benefits related advice, brokerage and associated services. JLT’s client proposition is built upon its deep specialist knowledge, client advocacy, tailored advice and service excellence.
JLT is quoted on the London Stock Exchange and owns offices in 40 territories with more than 10,600 employees. Supported by the JLT International Network, it offers risk management and employee benefit solutions in 135 countries.
For further information about JLT, please visit our website www.jlt.com.
About JLT Specialty
JLT Specialty Limited (JLT Specialty) is a specialist insurance broker and risk consultant, providing market leading industry knowledge and expertise in specialist fields to some of the world's largest companies.
JLT Specialty is part of the Jardine Lloyd Thompson Group of companies (JLT), one of the world’s leading providers of insurance, reinsurance and employee benefits related advice, brokerage and associated services. JLT’s client proposition is built upon its deep specialist knowledge, client advocacy, tailored advice and service excellence.