Delivery disasters - can you insure against them?

So, which insurable risks do transport companies face?

Did you think that the only risks faced by transport companies are accidents and breakdowns? Wrong: there are also some more unusual risks that they may face, which may require specialised insurance cover. Some of the most unusual ones include the following:

Kidnapping and ransom (K&R)

This is a growing threat for transport companies operating in high-risk areas, such as war zones, politically unstable regions, or areas known for criminal activity. Criminals or terrorist organisations may target them, seeing them as lucrative targets owing to the valuable goods they transport, or the high-profile clients they serve. In some cases, kidnappers may seek to hold company employees or executives for ransom, demanding large sums of money in exchange for their release.

The impact of a kidnapping and ransom incident on a transport company can be disastrous: potentially resulting in reputational damage, loss of revenue, and significant legal liabilities. Companies may also face increased insurance premiums or difficulty obtaining cover in the future. Furthermore, a kidnapping and ransom incident can have a devastating effect on the mental health of employees and their families, leading to long-term trauma and psychological distress.

Should operators take this seriously?

Bearing in mind the potentially catastrophic effect of a kidnapping and ransom incident, it might not be a bad idea for transport companies to take proactive measures to reduce, as much as possible, their risk exposure, perhaps by:

  • implementing robust security protocols and training for employees. This could include the use of armoured vehicles; GPS tracking systems; and security personnel to protect against potential threats
  • providing employees with training on how to identify and respond to the possibility of these situations; including how to communicate with kidnappers, and look for help from law enforcement agencies.

What about insurance?

Specialised policies are certainly available; they typically include reimbursement for ransom payments, professional crisis management services, and repayment of other related expenses such as legal fees and travel costs. Insurance carriers may also provide access to trained consultants and negotiators, with expertise in handling kidnapping and ransom incidents, helping to ensure a successful resolution to the crisis.


With the global security landscape becoming increasingly complex, terrorism is a serious and growing threat that can hit all aspects of society, including the transport sector. Freight companies are particularly vulnerable to attacks owing to the important role they play in the global economy, and the high-profile nature of their customers or cargo.

Hijackers might target them for a variety of reasons; such as seeking to disrupt the global supply chain, or to make a political statement.

The effect of a terrorism-related incident on a transport company can be grievous, and long-lasting. Depending on the nature of the attack, companies could face extensive property damage; significant business interruption; and legal liabilities.

The loss of vital infrastructure or equipment could also result in loss of life, or serious injury, to employees or third parties. Also, terrorism-related incidents can result in reputational damage, with the potential for negative media cover and public scrutiny.

delivery driver accident

War and political issues

The transport sector is particularly vulnerable to the effects of political instability, and conflict. Those that operate in regions of war and political unrest face a range of risks that can devastate their business operations; and put their employees in harm's way.

Companies may face property damage; business interruption; and liabilities arising from a range of events, including terrorism, civil unrest, and military actions. They could also face restrictions on their ability to operate, with the potential for supply chain disruption and revenue losses.

One of the most important concerns that transport companies face, in regions of war and political unrest, is the threat of physical harm to employees, and damage to assets. Conflict zones are often unpredictable and dangerous; with the ever-present chance of violence erupting at any moment.

Employees could easily be at risk of injury or death from military actions, terrorist attacks, or other forms of violence. In addition, their employers could face risks related to property damage, theft, or destruction of critical infrastructure; such as roads, bridges, and ports.

As if that wasn't bad enough: companies operating in regions of political instability also face risks related to the regulatory environment. Governments in unstable regions could restrict the movement of goods and people, creating real problems for transport companies. These restrictions might include curfews; checkpoints; and other security measures that can delay shipments or disrupt supply chains.

Additionally, political instability may result in changes to the way that business is conducted, such as customs procedures or trade agreements, which can mess up transport operations.

Another significant risk for transport companies operating in regions of war and political unrest is reputational damage. Companies may be seen as complicit in the conflict or perceived to be taking advantage of the situation for financial gain. Negative media coverage and public scrutiny can harm a company's reputation and lead to the loss of customers or contracts.

Can these problems be mitigated?

As well as security measures, transport companies could think about their relationships with local communities, and other stakeholders; are they good enough? Building trust and goodwill with populations can often help to reduce the risks of conflict and political instability.

Also: they could work with governments and NGOs, to support the development of infrastructure and services that benefit the community; such as schools, health clinics, and job training initiatives.

Cyber threats

These are, sadly, a growing threat that can hit all aspects of a transport company's operations. Hackers could try to disrupt their network; steal sensitive data; or cause damage to critical infrastructure.

Attacks can not only cause financial losses; but also damage reputations, and incur legal liabilities. In addition, businesses could lose important assets, including customer information, trade secrets, and other sensitive intelligence

Is there anything we can do about this?

Begin by implementing robust cybersecurity protocols and training for employees. This could include the use of strong passwords; regular software updates; and employee training on how to identify (and respond to) potential cyber attacks.

Companies should also consider investing in cybersecurity technologies such as firewalls; intrusion detection systems; and encryption software to protect against potential threats.

Environmental concerns

As the world continues to grapple with caring for our environment, companies face a range of risks; including pollution, contamination, and waste disposal.

Transport companies are significant contributors to environmental risks; with emissions from trucks, ships, and planes contributing to air and water pollution. In addition, transport companies may transport dangerous materials, which can result in widespread contamination if not properly handled.

Waste disposal can also cause headaches for transport companies; in particular, the leakage of oil or human waste at sea gets certain companies a lot of bad publicity far too frequently. Scrap plastics, intended for safe disposal, can end up as landfill in poorer countries; and cleaning up of petrochemical spills can be an economic catastrophe for affected coastlines, even leaving aside the awful effects it can have on the quality of life of residents, and the destruction of wildlife and their habitats.

Can these risks be insured against?

Nowadays you can insure against just about anything; from a pianist losing the use of a finger, to an oil well blowing up!

Whilst some of these risks above may be more unusual, specialised insurance cover is probably available to help protect transport operators against them. It is important, though, for companies to work with experienced insurance brokers to assess their risks, and make sure they have the appropriate cover in place. Insurance contracts can be complex; and there is no substitute for advice from the experts.

More to follow soon ........

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