The Fashion Industry is always at the cutting edge. All puns aside, but because distributors are usually operating two to three seasons ahead, they are designing and ordering stock well in advance of its actual release.
A problem occurs if stock is lost or damaged in transit, as the profit related to that season’s income is foregone; and the goods can rarely be replaced in time. Fully understanding the extent and impact of this exposure is a key consideration for any fashion house, and appropriate cover needs to be in place. However, having said that, most Marine Transit policies only cover 10% of lost profit, which is nowhere near the desired level of protection.
Fortunately for well-respected designers and retailers, Max Mara, GSA was able to incorporate the full profit margin into their marine transit policy. And, as luck would have it, it was only a matter of months before a container-load of stock was stolen, representing a potentially massive loss to them. We were able to gain immediate approval of GSA’s manuscripted “basis of settlement” under the policy to ensure that a whole season’s profit was not lost to Max Mara. Interestingly, the previous broker had not catered for this exposure despite being more expensive!
And this raises an interesting point – it doesn’t cost any more to have a good broker, one who understands the intricacies of your business, and tailors your insurance program to your particular exposures. But, the difference in attitude and application to your needs can have a profound affect on your business performance. For more information on how GSA can help with Marine transit cover for stock, contact the manager of GSA’s General Insurance division, David Bird on 02 8274 8100.