Global shipping and logistics are facing steady challenges, and the insurance market is feeling the squeeze. Peter Herman, president of Insurance Marketing Agencies, says the strain on supply chains is here to stay. Costs for shipping and imports are up, and while it’s not as chaotic as during the height of the COVID pandemic, some areas are still seeing complete import stoppages.
One major factor is the enforcement of US tariffs and the country’s lack of infrastructure readiness, especially for low-value goods. Herman highlights how the $800 de minimis tax rule disrupts both businesses and consumers. These ongoing issues affect more than logistics—they’re forcing insurers to rethink how they price policies and assess risks. There’s more uncertainty to manage now, with factors like inflation, political tension, and fragile supply chains making things tough.
Warehouses are also under pressure. Herman explains that storing goods for too long increases the chance of losses. While US warehouses generally have solid safety controls, past events like Hurricane Sandy remind us that risks remain high. To keep up, insurers want more flexible policies that can adjust to seasonal stockpiling, tax moves, and sudden shifts in global trade.
Another area feeling the heat is commercial auto insurance. Costs are soaring due to big legal payouts, labor shortages, and parts inflation. Litigation funding is changing how claims work. Private investors are backing legal cases, meaning more money is flowing into lawsuits and making claims more complicated and expensive. This puts fleet operators, already facing tight safety rules and fewer coverage options, in a tough spot.
Climate issues are creating new challenges for inland shipping, too. Floods and storms haven’t caused massive truck damage yet, but as vehicles sit longer or travel through risky areas, the threat grows. Herman notes that many trucking companies are now investing in safety tools like cameras and tracking systems to avoid these hazards.
Cyberattacks have become a constant worry for insurers and businesses alike. Herman shares a striking example of a food distributor showing him how often their system was being attacked, even during their meeting. No industry is safe—hackers are always looking to disrupt operations. Insurance processes have adapted, with carriers now more prepared to handle ransomware claims quickly. Still, Herman thinks companies never feel like they’re doing enough to protect themselves.
The insurance world is adjusting to all these new risks, but it’s clear that the challenges in shipping, warehousing, transport, and cyber security are now deeply intertwined. As these issues persist and change, insurers and businesses will need to stay alert and adapt to the uncertain road ahead.