With the global financial crisis many investors fled to gold and the result has seen the price of bullion soar, creating a significant level of under-insurance as policy limits struggled to keep up with values.
With gold bullion pricing at a record high broker Marsh’s Specie Division said it has found firms involved in metal trading, storage and transit are at risk of being under-insured against physical damage or loss.
In response, Marsh has developed a new metals insurance product that will provide up to $1 billion of cover, with the firm saying the new level of indemnity was now needed if sufficient value was to be available for the rising costs of the goods involved.
The new product provides protection for precious and base metals whist in transit or in store worldwide, plus related plant, machinery and equipment,” said Marsh “Designed for the specific needs of financial institutions, metals and mining companies, metals traders, refineries, transporters and storage companies, the metals insurance product covers ‘all risks of physical loss or damage’. This includes employee theft, theft and mysterious disappearance; political risks and advanced loss-of-profit cover is also available.
Commenting on the launch, Philip Turner, Head of Marsh’s Specie Practice in London, said: “Any business involved in the transit, storage and trading of precious and base metals are potentially at risk of being under-insured as a result of the recent dramatic increase in wholesale prices.
“While the actual physical amount of metals in transit has not changed dramatically in the past 12 months, values at risk have doubled in some cases. Marsh’s new metals insurance product provides additional peace of mind to anyone connected to the precious and semi-precious metals industry, at a time of high price volatility.”