What Is Stock Throughput Insurance?
Stock throughput (STP) insurance is a structure, usually on an all-risks basis, that deals with a business's stock across the supply chain in a single policy. The stock is assessed within a single insurance design whether it is waiting at insured locations and third-party warehouses or moving by road, sea or air. The aim is to reduce gaps and overlaps in cover between two policies that would otherwise work separately: fire (property) insurance for stock and cargo insurance for transit.
The scope and name of STP vary from product to product in the market; the product may not be offered under the same name or with the same scope by every insurer in Türkiye. Capacity and wording in the local market are explored through placement work. This page is general information only and does not constitute the scope, price, acceptance or a guarantee of payment of any specific policy.
The Gap Between Stock, Transit and Storage
A standard property (fire) policy deals with stock at the insured location; for stock in transit, at a third-party warehouse or waiting at a port it may limit or exclude cover. A cargo policy deals with goods in transit; depending on the wording it may leave outside its scope long periods of waiting in storage and stock at the business's own locations. For businesses with several locations, several modes of transport and third-party logistics (3PL) providers, loss can arise at the boundary between these two policies.
- A single design: Under STP, stock may be dealt with between insured locations and in transit within one policy structure; which stages and locations are covered must be verified from the wording.
- Third parties: Stock held by a 3PL or an agent is in some structures assessed as contingent risk; scope and limits depend on the wording.
- Need for other policies: The existence of an STP policy does not automatically remove the need for the business's fire, cargo or liability policies; which risk is dealt with under which policy is determined by reviewing the structure.
Cover Across Stock, Transit and Storage Stages
Scroll the table horizontally to see all columns.
| Policy that usually works separately | Stock throughput approach | |
|---|---|---|
| Storage at the business's own location | Fire / property insurance (stock) | May be dealt with within a single structure, depending on the wording |
| Transit (road, sea, air) | Marine cargo insurance | May be dealt with within a single structure, depending on the wording |
| Waiting at a third-party warehouse, port or 3PL | Property insurance may limit; cargo insurance may be limited | In some structures may be dealt with as contingent risk |
| Loading, unloading and transhipment | Marine cargo insurance (depends on the wording) | Dealt with according to the wording |
| Stock in the course of manufacture or processing | Property and engineering policies | Damage arising from processing is generally outside cover (in sample structures) |
The table is a general framework; each row varies with the policy wording and the insurer's structure.
Who Is It For?
STP is aimed at businesses whose stock is spread across several locations and stages of transit. Market sources usually give importers, exporters, distributors and multi-location manufacturers as examples:
- Importers and exporters: Businesses whose raw materials or finished goods pass through port, customs and transit stages.
- Distributors and retail chains: Businesses that move stock between several warehouses and distribution points.
- Manufacturers and industrial businesses: Those that move raw material and finished stock between their own plants and warehouses.
- Businesses using 3PLs: Those whose stock is partly held by third-party logistics providers.
None of these parties should be treated as automatically insured merely by virtue of its role; the insurable interest is determined by ownership, contract and the liability relationship, and additional insureds are defined in the policy.
Sum Insured, Declarations and Limits
The following are examples; the structure varies by insurer and wording.
- Sum insured: The value of the stock; on what basis it is set (for example cost value or selling price) depends on the wording.
- Declarations and reporting: Because stock values fluctuate, some structures may work on a periodic declaration or reporting basis; the accuracy and timeliness of declarations may affect cover.
- Location and transit limits: Limits per location and per shipment and aggregate limits are defined in the policy.
- Sub-limits: Sub-limits may apply to certain perils (for example natural catastrophe) or to stock held at third-party warehouses.
- Deductibles: Deductibles and waiting periods per location, shipment or event are defined in the policy.
Stock Throughput, Marine Cargo, Fire and FFL Compared
Scroll the table horizontally to see all columns.
| Stock throughput | Marine Cargo | Fire / property (stock) | FFL (storage liability) | |
|---|---|---|---|---|
| Subject | Physical loss of or damage to stock between locations and in transit | Physical loss of or damage to goods carried | Damage to stock at the insured location from fire and similar perils | A forwarder's legal liability for goods in its care |
| Insured interest | Interest in the stock (usually the stock owner) | Interest in the goods | The stock owner | The forwarder |
| Nature of cover | Physical damage to property (mostly all-risks; depends on the wording) | Physical damage to goods | Physical damage to property (named perils or all risks) | Legal liability |
| Storage stage | Covered depending on the wording | Limited depending on the wording | Covered at the insured location | Storage in the forwarder's hands |
These products are not substitutes for one another. For goods in carriage, see Marine Cargo Insurance; for stock and buildings at an insured location, Property & Fire Insurance; for a forwarder's storage liability, Freight Forwarder Liability.
Exclusions and Policy Limits
The following are examples; the list is not exhaustive and each exclusion may have exceptions or conditional cover.
- Damage arising from processing: Damage arising from the manufacturing or processing activity itself is excluded in sample structures.
- Delay and consequential loss: Financial loss from delay or business interruption is excluded in most cargo and stock clauses.
- Inherent vice and deterioration: Deterioration arising from the nature of the goods is excluded in some wordings. Deterioration from refrigeration failure needs separate assessment; see Temperature-Controlled Cargo Insurance.
- Mysterious disappearance and inventory shortage: Losses found on stocktaking or that cannot be explained are excluded in some wordings or made subject to proof of the accident.
- Insufficient packing and stowage: Packing or stowage unsuited to storage or carriage is excluded in some wordings.
- War, strikes and similar risks: May be subject to separate clauses and conditions.
- Deductibles and limits: Deductibles per location, shipment or event and sub-limits are defined in the policy.
Information Needed for a Quotation and Underwriting
- Types and values of stock (lowest and highest value; seasonal fluctuation)
- Locations: the business's own locations, third-party warehouses and ports; storage periods
- Transport routes and modes (road, sea, air), shipment frequency and annual throughput value
- 3PL and carrier contracts and the liability limits in them
- Fire protection, security and storage conditions (stacking height, temperature and so on)
- Existing fire and cargo policies and their limits
- Loss history and requested deductibles
This list is an example; the information and documents requested vary by insurer and policy structure and should not be read as a single mandatory standard form for every insurer. Acceptance, requests for further information and terms rest with the relevant insurer.
Frequently Asked Questions
What is stock throughput insurance?
How does stock throughput differ from marine cargo and fire insurance?
Is stock in the course of manufacture or processing covered?
Is stock held by a third-party warehouse or logistics company covered?
Is loss from refrigeration failure or deterioration covered?
Is stock throughput insurance available from every insurer in Türkiye?
What information is needed for a quotation?
Neolife's Role
Neolife Group can assess the relevant information and contracts, explore suitable local insurance and reinsurance solutions, carry out placement work and compare the quotations received. This does not imply the capacity of any particular insurer or reinsurer, acceptance of cover, price or any commitment to pay; these are subject to the rules of the relevant insurer, to legislation and to the policy terms.