There is a lot to consider when your company is engaging in cash in transit activities. After all the risk assessments, planning and logistics then you have the insurance to worry about. Not all cash in transit insurance policies are the same. Some are cheap and some cost a little more, however it is worth noting that in some cases, the cheaper ones will actually fit your business better and offer more coverage simply because of the way insurers rate the activities. This does not mean that cheapest is always best. It all comes down to your appetite for risk. These are the important questions that you need to ask yourself.
1) should you insure your operations for full cash in transit insurance coverage or will a legal liability or negligence cover work for you?
2) Are you carrying only cash or will you be carrying other valuables as well?
3) How much will you be carrying at any one time and are you running one man crew, two or more and will your guys be armed?
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WHAT IS CASH IN TRANSIT INSURANCE AND AREN’T THEY ALL THE SAME?
There is cash cover available on most business pack type policies however, where a cash in transit insurance policy will differ from standard money cover found in common insurance policies is that the common insurers will cover the money of the policy holder and not the cash and valuables of a third party. As a security company engages in the activity of cash and valuables logistics it is common practice that they will be in possession of third party monies and valuables therefore a specialist policy must be sought in order to properly protect the liabilities and interests of the security firm. Another area of concern is the differing policy wordings in relation to the insuring clause for the loss of cash. There are three main ways the insuring clauses work in relation to cash in transit insurance coverage, these are:
- Legal liability based coverage: This type will only indemnify you against the legal liability arising from the loss or destruction of cash and valuables whilst in transit. These types of cover can leave you exposed in the case of an armed robbery as the insurers can argue that you were not legally liable for the money of someone else as they would be responsible for insuring their own property. Whilst this will cover you legally, it leaves your customers, reputation and contract in jeopardy
- Negligence based coverage: This type will indemnify you for your negligence in relation to the loss or destruction of monies whilst in transit. Once again, this type of cover can leave you exposed in the event of an armed robbery as the insurer can argue that if you have followed all your SOPS and taken all care in the execution of your duties then you would not be negligent, therefore the policy would not respond.
- Full loss or damage based wording: This type has a very simple insuring clause which simply states that the insurer will cover loss and destruction of third party monies and valuables. As with all insurance policies there will be exclusions however this type of cover is the broadest and generally offers the best cover.
ARE YOU ONLY CARRYING CASH?
Once you have checked that you have the correct type of policy wording for your cash in transit operation the next task is to ensure that what you are carrying is actually insured. All insurers will have a definition of “cash” or “valuables” in their policy wordings. Some of these definitions will exclude precious metals, stones and tobacco among other things. Most cash in transit operations will only carry money so this area will not be of much concern, however if you are one of the specialist operators out there then this could be of major concern to you.
HOW MUCH WILL YOU BE CARRYING?
All insurers will have carry limits on a ratio of guards to cash. One of the best policies available on the open market gives a carry limit of $100,000 for one armed guard and $50,000 for one unarmed guard. Other policies have limits of $30,000 per guard. The carry limit is really going to depend on the type of cash carry you are doing and the amounts that you need to carry to complete your operations profitably.
Of course there are many other factors to determine whether or not the cash in transit insurance policy will be the best fit for your business however as you can see, these policies are all very different. Essentially they are a niche area within another niche area for insurers. It is important that you have the coverage that best fits your business. We are a specialist in this area and we will ensure that you have exactly the cover you require and explain any limitations and covers to you in an easy to understand manner. Call us today to discuss your cash in transit insurance requirements and let us worry about the insurers so you can get back to running your business.
