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(855) 420-9447Hurricane cargo insurance is a crucial safeguard for a business when Mother Nature unleashes her fury. The costs inflicted by these storms could be overwhelming. Not just in terms of money, but also in the time and effort it takes to get a business back to normal. Every company should invest and understand this form of protection before a storm makes landfall.
According to the Federal Emergency Management Agency (FEMA), preparation is key to mitigating the devastating impacts that a hurricane can have on a business. With hurricane cargo insurance, companies can place specialized coverage that will protect their goods from the flood and wind damage these powerful storms can cause.
Our guide will explain the dangers hurricanes can have on the items sold by a business and how using insurance will help.
Hurricane cargo insurance is a special kind of coverage that protects goods and equipment when one of these storms hit. This means if a powerful weather event comes and wrecks a company’s shipment or stored products, the insurance will help them cover the costs.
While there is no form of coverage specifically listed as ‘hurricane insurance’, certain types of protection will defend against damages caused by these storms.
These include:
Named perils can protect against hurricane damage if the coverage is explicitly listed in the contract. Hazards that aren’t mentioned in the paperwork won’t be insured.
All risk insurance will protect freight from all kinds of damage that hasn’t been listed, such as natural disasters like hurricanes. If shippers are only worried about damages caused by these massive storms, then they should pick a named perils policy that will give them coverage.
Businesses seeking to protect their goods from hurricanes and other dangers should obtain all risk insurance. Doing so will give them an extensive amount of protection.
Regular freight insurance policies are great for more conventional types of damage, but not when it comes to natural disasters like hurricanes. These kinds of policies might not provide coverage for the specific, severe challenges that a powerful storm can bring.
Other problems that come with standard types of coverage include:
Hurricane cargo insurance is designed to address the unique and multifaceted challenges posed by these weather events. This makes it a crucial add-on to a regular policy.
Goods in storage or traveling through the supply chain in affected areas are at risk when a hurricane makes landfall. These aren’t average, everyday dangers that cargo is up against.
These storms can:
If hurricanes can inflict this kind of damage, they can easily destroy freight inside a trailer or warehouse. There are three ways that these powerful storms can harm cargo.
These include:
These three types of damage are why companies should obtain storm freight insurance in case of potential losses caused by hurricanes. We’ll discuss each hazard in-depth, so you’ll have a better understanding of these threats.
Hurricanes can produce super strong winds that can wreak havoc on anything it comes against. Even if your goods are stored in a warehouse, these gusts can inflict a large amount of damage. To show how powerful these can be, we included a table listing each hurricane category and the corresponding wind speed in miles per hour (MPH).
| Hurricane Category | Corresponding Wind Speed |
| 1 | 74-95 MPH |
| 2 | 96-110 MPH |
| 3 | 111-129 MPH |
| 4 | 130-156 MPH |
| 5 | 157 MPH |
Provided by National Oceanic and Atmospheric Administration (NOAA)
The higher category a hurricane is given, the more damage it can inflict on freight. Winds from these weather events blow around a variety of debris that can harm cargo and equipment.
This includes:
Sometimes, the debris can also include flammable materials. When thrown around at high speed, these items pose a risk of sparking a fire, causing further harm to cargo. The damage these sustained winds inflict are all the more reason businesses should have hurricane freight insurance.
Rain and flooding are also major problems during hurricanes. Excessive amounts of water can ruin goods and create delays that hurt businesses. Rain wets the roads and makes it easier for semi trucks to lose control. Any cargo in a trailer is likely to be damaged in a wreck.
Heavy rains can make roads impassable. If freight is stuck on a flooded road, the damage could range from mild to severe, depending on how long it remains waterlogged. Products within a warehouse or trailer could also be submerged depending on height of water levels.
Hurricane natural disaster cargo insurance can mitigate these risks considerably. By ensuring that a policy covers rain and flood damage, businesses can avoid major financial hits due to these storms.
So far, we’ve discussed the physical damage that hurricanes can cause. However, the delays these weather events cause can also lead to the expiration of perishable goods.
This is especially troubling for businesses that deal with the following:
These types of goods have varying expiration dates. Depending on the severity of a hurricane, products may be stuck in a warehouse or trailer for an extended period. By the time perishable items are finally moved, they could be expired or on the verge of going bad.
Hurricanes often result in flooding and debris, which make key transport routes become impassable. Even if alternative routes could be affected as well. In the chaos of a natural disaster, businesses don’t have many options.
Power outages typically occur when a hurricane makes landfall. While temperature sensitive goods inside a refrigerated trailer will be protected, products in a warehouse could be susceptible to warmer temperatures. When this happens, these products will spoil and be lost.
Storm cargo insurance is essential when hurricane season comes around. Businesses will still be reimbursed if their goods expire, rather than being directly damaged.
All the varieties of hurricane cargo insurance can be very difficult for businesses to understand. Not all polices are created equal. Each one has different provisions and levels of protection.
There are variations in:
Businesses should look at these parts very carefully to find cargo insurance for natural disasters that will work best for unique circumstances.
Hurricane natural disaster freight insurance coverage can have many variations. It’s up to business owners to determine how much protection their cargo and equipment will need. As we mentioned briefly, companies can obtain an all risk or named perils policy.
Businesses should determine the amount of coverage they need based on:
Even if a storm is powerful, companies won’t need an excessive amount of coverage if a hurricane isn’t coming their way. For instances like these, a business may prefer to obtain a named perils policy for limited protection. However, comprehensive freight insurance for storms is better suited for powerful hurricanes coming directly at a company’s cargo or equipment.
The nature of goods and equipment also plays a role in a business’ coverage decision. For example, a company might want a plan that covers water damage to protect their electronics. Food businesses will choose a policy that reimburses them for spoilage due to delays.
Sometimes, cargo might be more at risk while it’s stored in a warehouse than when it’s in transit. Businesses should understand where their risks are higher and select a plan that covers both or focuses on one over the other.
Paying premiums and deductibles will be cheaper than outright replacing lost cargo and equipment. However, these parts of freight insurance for natural disasters caused by hurricanes can vary in price. Every business should have a clear understanding of what these two terms are and how each work.
Finding an affordable premium is extremely important for a company because they will be paying it on a frequent basis. To do this, a business can choose a policy that has a high deductible.
While this means a company will pay more up front if disaster does occur, they’ll be paying less every month, quarter or year. That said, a lower deductible will result in higher premiums. The best option all depends on the preferences of a business.
If a business experiences property damage in the wake of a hurricane, they’ll need to file an insurance claim.
Companies will need to do the following:
The first step after discovering damage is to report it to the insurance provider as quickly as possible. Missing the time-frame to do so could jeopardize a claim. Business should also document everything during the claims process.
This includes:
After the initial report, adjusters provide an initial estimate of how much the insurance company will cover. It’s important to note the amount provided isn’t final. Afterward, the adjuster submits their report to the insurance company to review.
Once this is completed, a company will receive a settlement offer. This is what the insurance provider is willing to pay for a claim. Companies should look over this carefully to ensure the amount is what they believe they’re entitled to.
If the offer seems low, businesses can try to negotiate or appeal. This might require additional documentation or even third-party assessments.
Knowing where hurricanes are most likely to strike can be super useful in deciding your insurance needs. Out of all the places in the U.S., the Gulf Coast and Atlantic States are most likely to experience the catastrophic effects of these storms. These locations have a long history of dealing with hurricanes.
The Gulf Coast States include:
Atlantic Coast States include:
The coastal areas of these states are susceptible to the damaging effects of hurricanes. Businesses and property owners that have goods in these two regions should obtain cargo insurance for storms of this size. Of all these states in both the Gulf and Atlantic Coasts, we’ve included data on the top five that have experienced the most hurricanes.
| State | Number of Hurricanes |
| Florida | 120 |
| Texas | 64 |
| Louisiana | 63 |
| North Carolina | 58 |
| South Carolina | 32 |
These numbers account for all hurricane categories that have struck these states. As the table shows, Florida has received more of these storms than any other. This state also happens to be in the Gulf and Atlantic coast, which increases the chances of it hit by a hurricane. Any business in Florida or the two regions should obtain storm cargo insurance to protect their goods.
If a hurricane is on the way, where a business stores their inventory can make a world of difference. Picking the wrong location could mean serious damage or loss, while a well-chosen spot can help a business bounce back quickly after the storm.
Companies should look for these features when searching for a warehouse to store their goods:
Storing goods far away from the coast is a no-brainer. Areas further away from coastlines are much safer, even in the Gulf and Atlantic Coast states. Since flooding can be a major issue, businesses should look for warehouses that have elevated storage areas.
Companies should definitely consider facilities that have reinforced walls, roofs, and doors. The stronger the structure, the better the chances goods will survive a storm undamaged.
As we’ve outlined, hurricanes and other natural disasters are unpredictable but inevitable. You can’t control the weather, but you can control how well-prepared your business is when disaster strikes. At Emergency Management Logistics, we specialize in taking the uncertainty out of these uncertain times.
Our Services Include:
Don’t leave your valuable freight to chance. Schedule a consultation with Emergency Management Logistics or request a risk-free quote to learn how we can safeguard your assets when it matters most. You can also contact our team at (855) 420-9447 for more information.