Stock Throughput – More Than a Cargo Policy<\/p>\n
Stock Throughput (STP) policies have been around for decades; however, during my recent trips to Latin America more questions on their coverage have been arising. In this blog, I discuss some of the issues to consider when underwriting STP products, as they are more than just a cargo policy with extended storage.<\/p>\n
These policies cover an insured\u2019s goods all the way through production and to the final destination. They cover different modes of transportation (ocean, air, inland) in addition to storage and periods in warehouses at each production stage, whether owned by the insured or by third parties.<\/p>\n
STP\u2019s popularity appears to be growing in today\u2019s soft market environment and they are penetrating new regions. Easier administration, efficiency, a reduction in premium and the lack of gaps in coverage are often touted as advantages to the insured.<\/p>\n
But these policies require a different underwriting approach to traditional cargo policies.<\/p>\n
There is no standard wording for STP policies; clauses and the scope of coverage are negotiated individually, although a set of terms called Institute Cargo Clauses usually serve as the basis of a contract. Here are some crucial points for the policy wording:<\/p>\n