BUSINESS ANALYSIS
INCORPORATING COLD CHAIN
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Insurance for perishable products differs significantly from general cargo insurance due to the unique and often catastrophic nature of the risks. Historically, insurers who offered‘ semi all risks’ cover for perishables faced substantial losses. " If someome wanted to carry all of the risks, then they should go and buy themselves an avocado farm," Hartwell quipped, emphasising that insuring perishables means taking on commercial risks beyond typical insurance scope.
The primary cause of loss in perishable claims is usually an interruption in the cold chain. Debates often revolve around the precise cause of loss, necessitating a sophisticated insurance broker with expertise in perishable products and a reliable insurer. While modern insurance clauses are more aligned with industry
Insuring perishables means taking on commercial risks beyond typical insurance scope. realities, issues like inherent vice( deterioration due to the product ' s natural characteristics) remain complex. The advent of smart containers with real-time monitoring and IoT capabilities is expected to reduce claims related to cold chain interruptions, as they provide continuous data on temperature, humidity and CO2 levels.
COMMON PROBLEMS AND RISK MANAGEMENT STRATEGIES
Hartwell ' s team at NRF frequently encounters several key issues in perishable transport claims:
• Misaligned contracts: A significant problem arises when the informal arrangements between sellers and buyers do not align with their formal terms of sale, leading to disputes over risk transfer and responsibility.
• Valuation issues: Ensuring the insurance valuation accurately reflects the goods ' value at the time of loss, not just at the farm gate, is crucial for proper compensation.
• Regulatory challenges: Exporters must be intimately familiar
with the stringent regulatory requirements of their buyer ' s market, as well as South African legislation( for example, managed by PPECB, Department of Agriculture, Health, and SARS). Compliance obligations include product inspection, cold chain management, record-keeping and destination-specific labeling and packaging.
• Storage issues: Debates often arise over whether goods are in‘ temporary storage’( potentially insured during transit) or‘ permanent storage’( generally uninsured).
• Brokerage expertise: There ' s a severe constraint in the insurance brokerage market for those truly understanding the perishable industry ' s unique risks.
Hartwell distilled his advice into four critical takeaways for anyone involved in perishable product exports:
• Accurate sales contracts: Ensure contracts precisely reflect intentions, obligations and rights.
• Reliable logistics partners: Choose partners who deeply understand the perishable business, as " if you go for the cheapest, then you ' ll get the cheapest service ".
• Specialised insurance: Understand that perishable insurance is complex and requires expertise.
• Regulatory compliance and risk management: Implement a robust system to comply with all regulations and manage inherent risks.
INSURING THE COLD CHAIN
Susan Duvenage, divisional director of the marine division at Prestgroup, offered critical insights into the complexities of insuring sensitive cargo, drawing on her extensive experience with various underwriters, including Lloyd ' s of London.
She echoed the sentiments of previous speakers, particularly Malcolm Hartwell, acknowledging the " absolute turmoil " prevalent in the industry. She highlighted that discrepancies between issued contracts and actual practices, coupled with port congestion and other logistical delays, have profoundly impacted the insurance market.
A fundamental point Duvenage clarified is the scope of marine insurance. Contrary to common misconception, marine insurance policies cover all modes of transport, not just ocean freight. She frequently encounters clients who mistakenly believe they don ' t need a marine insurance quote if their cargo is moving by air, road or rail. Duvenage stated that for any mode of transport, the correct policy is to insure cargo under is a marine insurance policy. This broad coverage is essential for perishable goods, which typically traverse multiple transport modes from farm to final destination.
Duvenage ' s presentation aimed to illuminate the factors influencing insurance risk in perishable goods handling, including general exclusions and the crucial steps to take when a claim arises. Her insights, backed by her firm ' s direct engagement with both local and international underwriters, provide a vital perspective on protecting valuable, time-and-temperature-sensitive cargo. CLA
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COLD LINK AFRICA www. coldlinkafrica. co. za March / April 2026