How Transportation Insurance is Vital for Logistics Companies

Hoffman Hanono
January 22, 2024

Having the right insurance is critical if you operate a logistics company that manages goods, order fulfillment, or full-scale transport and shipping. Why? The margin for error and delay is massive.

Transportation insurance offers much more than a safety net; it’s a key piece in the intricate logistics puzzle that ensures you maintain customer confidence while staying protected and compliant.

Landscape Overview: Changing Business Models

To keep pace with competitors and satisfy consumer demand, more and more businesses are shifting towards an e-commerce model. Companies that previously did most business from physical stores are now transitioning online, introducing a new set of complications and risks.

Businesses must protect themselves in transporting goods and managing inventory, handling customer returns, and maintaining timely delivery. This is precisely why transportation insurance is so important.

General Liability and Excess

General liability and excess insurance are the most important policies you can carry.

General liability insurance covers your business if an employee or visitor is injured on-premises. This coverage also extends to protect against personal injury, including cases of slander, libel, and violation of privacy.

Excess liability insurance provides even further protection when you’ve exceeded the limits of your general liability insurance.

Lost or Damaged Cargo

One out of every 10 e-commerce packages arrives damaged, and the reasons for this vary. A lot of movement happens between the time goods leave the warehouse and land on our front doors. And with every movement, the risk of damage increases.

Transportation insurance protects goods against loss or damage due to an accident, theft, or careless handling.

Third-Party Damage

In addition to protecting the goods, logistics companies must defend themselves against third-party damages and injuries. These accidents frequently occur in transit if the vehicle is in an accident. They can also happen during loading—for example, if a heavy package falls off a forklift, damages another vehicle, or hurts a bystander.

Unfortunately, the scenarios are endless, as are the risks. Always plan ahead and carry transportation insurance.


A 2019 analysis of package theft found that 1.7 million packages were stolen every day in the United States. The total cost of these “lost” packages came to a staggering daily total of $25 million.

If that’s not enough incentive to carry transportation insurance, consider this: In 2023 alone, the US Postal Service reported a 161% increase in mail theft complaints.


If transporting the product requires warehouse storage, transportation insurance often extends to cover the associated risks. These include physical damage to the goods, theft, water and fire damage, damage from improper storage, and even protection against vandalism and pests.

Protect Your Business and Employees Now!

We understand the complications and risks associated with transportation and logistics and are dedicated to offering you the best custom coverage that meets the demands of your industry.

Since 1959, we’ve proudly served businesses in San Diego and surrounding areas. Whether you need transportation or commercial insurance, we can help! Reach out to us to get started.