EVALUATING THE ROLE OF INSURANCE IN MITIGATING FINANCIAL RISKS IN LOGISTICS
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Abstract
This paper evaluates the role of insurance in mitigating financial risks within the logistics sector, highlighting its importance in safeguarding businesses against various uncertainties associated with transportation, storage, and supply chain management. As logistics operations become increasingly complex due to globalization, technological advancements, and changing consumer demands, the financial risks faced by logistics providers have also evolved. This study employs a mixed-methods approach, combining quantitative data analysis of insurance uptake and claims within the logistics industry with qualitative insights from interviews with logistics managers, insurance professionals, and risk management experts. The findings reveal that insurance plays a critical role in protecting logistics companies from risks such as cargo loss, damage, liability claims, and operational disruptions. However, challenges remain, including underinsurance, lack of awareness about available coverage options, and the need for tailored insurance products that address the specific needs of logistics operations. The paper concludes with recommendations for logistics providers and insurance companies to enhance collaboration, develop customized insurance solutions, and promote awareness of risk management practices. By leveraging insurance effectively, logistics companies can strengthen their financial resilience and ensure the sustainability of their operations in an increasingly volatile environment.
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