Stock Throughput Insurance

Stock throughput insurance is a specialty policy that follows a business’s goods across the entire supply chain, from the factory or port to third-party warehouses to the customer, under one program. It may cover inventory in transit and in storage, including at third-party logistics sites, closing gaps that standard property or a warehouse’s own policy often leaves.

If your products move through a supply chain, from the factory or port to a third-party warehouse to your customer, your inventory is exposed at every step. We help California importers, distributors, and product businesses close the gaps most owners do not know they have.

What does stock throughput insurance cover?

• Goods in transit by sea, air, and land, including import and export shipments.
• Inventory stored at your locations and at third-party sites, including third-party logistics (3PL) warehouses and fulfillment centers.
• Raw materials, work in process, and finished goods across the supply chain.
• Often broader valuation, such as selling price rather than cost.
• Catastrophe perils on stored stock, subject to terms.

Who needs it?

Importers and exporters moving goods internationally; businesses that store inventory at 3PL, fulfillment, or public warehouses; distributors, wholesalers, and product or e-commerce companies with inventory spread across multiple locations; and manufacturers with raw materials and finished goods moving through a supply chain.

Many owners assume the inventory sitting in a third-party logistics or fulfillment warehouse is covered by the facility’s insurance. Often it is not. A 3PL’s property policy covers the building and the 3PL’s own property, not your goods, and most 3PL contracts limit or cap their liability. Stock throughput covers your goods directly, regardless of who is at fault. California’s ports make import, export, and 3PL storage central to many local businesses.

How do we help?

We map where your goods originate, travel, and rest, review your 3PL and warehouse contracts for liability limits and carveouts, and structure a stock throughput program so your inventory is covered end to end.

Stock throughput replaces the transit and storage pieces that cargo and commercial property would otherwise cover separately. The wider program is on our business insurance page.

What does a stock throughput policy replace in California?

Two policies that would otherwise cover the same goods at different moments. Inventory sitting in a California warehouse is property, and a property policy here rests on the standard fire form adopted by Insurance Code section 2071: actual cash value, named perils, and no coverage for the goods once they leave the premises. Goods in transit are cargo, and a motor carrier’s liability for them in interstate commerce is set by 49 U.S.C. 14706 unless the bill of lading limits it. A stock throughput form insures the goods themselves from supplier to sale, in storage and in transit, usually at selling price rather than cost and usually on an all-risks basis. The gaps it closes are the handoffs: the day the goods are on a dock between the truck and the warehouse, and the difference between what the carrier is liable for and what the goods are worth. Read the form for exclusions on unattended vehicles and on inventory shortage found only at stocktake, which are where throughput claims are most often disputed.

The Insurance Code and federal provisions cited here are as published by the California Legislative Counsel and the Office of the Law Revision Counsel at the time of writing. They are amended from time to time, and the current text is published there.