Delayed payment and bad debts are two of the major risks facing the shipping and logistics industry in a climate of ongoing economic uncertainty, says James Barrow, underwriting manager, general & commercial guarantees division for Lombard Insurance. He told FTW that the industry could insure against bad debt but added that the operators should always be selective of the clients they dealt with. “Lombard offers credit insurance and also provides guarantees to the suppliers to allow for adequate credit lines to be accessed,” Barrow points out. A constrained economy has also led to operators diversifying and changing their service models, which also holds risks, says Barrow. “Changing the service offering should be conducted cautiously and with adequate security,” he comments. Furthermore, adequate funding to support the new service should be prearranged, adds Barrow. He says education and awareness play a major role in ensuring that companies are adequately covered against potential business risks. “They should educate themselves on the implications of the changes to their businesses and should be aware of the terms linked to the insurance policies they purchase,” says Barrow. He believes having the right information technology (IT) system could help a business better understand its financial position and the implications certain new business strategies may have. INSERT & CAPTION Operators should always be selective of the clients they deal with. – James Barrow
