Reusable packaging is an odd asset. It has real value, it is mostly not on your premises, and it is not usually on any schedule of insured property. This is a gap that most operations discover at the worst possible moment.
Why it falls through
- It is not fixed property and not obviously stock
- It is partly at third-party premises, which is where most of it sits
- It gets expensed rather than capitalised, so it never appears on an asset register
- Its value per unit is low even though the fleet total is not
- Nobody has ever thought to ask
The result is a meaningful asset with no defined insurance treatment.
What the fleet is actually worth
Worth calculating once, because the number is often larger than people expect:
- Units in the fleet — including those at customer sites, in transit, and in storage
- Replacement cost per unit at current prices, not what you paid
- Freight to replace them, which for bulky items is not trivial
- Lead time — how long you would be short if you had to replace them
The last two matter as much as the value. Losing a fleet is not just a financial event; it is a supply continuity event.
Questions worth asking your broker
- Is property away from the premises covered, and to what limit?
- Is property in the custody of others covered — at customer sites, in transit, at a third-party warehouse?
- Does the policy distinguish between owned and hired or pooled packaging?
- What is the treatment of gradual loss — the slow attrition that is the normal pattern, as opposed to a single event?
- Is there a limit that a fleet would exceed?
That fourth question is the important one. Most reusable packaging loss is attrition rather than catastrophe, and attrition is often excluded.
Events worth thinking about
- Fire or flood at a customer’s site where your spools are stored — also the reason our fire safety article exists
- Insolvency of a customer holding a substantial number of your spools, which is a real and not uncommon loss
- Transit loss — a container, or a vehicle
- Theft from an unsecured yard, yours or theirs
- Contamination that makes a batch unusable without any physical damage
Customer insolvency is the one people think of last and lose the most to. Spools at an insolvent customer’s site are often simply gone.
Practical protections that are not insurance
- Ownership marking that is unambiguous — the point made throughout our markings article, and here it is a legal matter rather than a logistics one
- Contractual ownership stated clearly, per the contract article
- Records of what is where — you cannot claim for what you cannot evidence
- Limiting concentration so no single site holds a large share of the fleet
- Regular reconciliation so losses are visible while they are small
What to do
Cheaply and soon: work out the fleet value and location split, then ask your broker two questions — is property in the custody of others covered, and is gradual loss excluded? That is a short conversation and it usually reveals something.
What we can provide
Replacement cost and lead time for our hollow board spools at your specification, which is what you need for the valuation. We cannot tell you what your policy covers, and we would not try — that is a question for your broker, and it is worth asking before you need the answer.