Insurance for Supply Chain Intermediaries

Supply Chain Intermediaries Face Counterfeit Products

Goods and services come and goods and services go, but how they get between point A and B is up to the companies that specialize in serving as a conduit for these things. Facilitating he process getting them from the all the various supply chain points of contact that you work with into the hands of waiting consumers can be a complicated dance involving timing and precision, and quality, comprehensive insurance for supply chain intermediaries is a must, given the nature of your business. After all, as the underlying structure of all commerce, you face a myriad of risks from a dizzying number of sources–and the more elaborate your supply chain, the greater more attractive your business is to those who would seek to compromise it, and thus the greater the vulnerability is that your system might be the subject of infiltration and exploitation by criminals. For example, counterfeiting is a major source of concern for your business, and as the criminals continually find increasingly sophisticated means of creating fake goods and finding ways to insert them into the pipeline, those who in between are obviously concerned about being caught unawares.

According to the Agreement on Trade-Related Aspects of Intellectual Property Rights, counterfeit trademark goods are defined as “goods, including packaging, bearing without authorization a trademark which is identical to the trademark validly registered in respect of such goods, or which cannot be distinguished in its essential aspects from such a trademark, and which thereby infringes the rights of the owner of the trademark in question under the law of the country of importation.”

To see a clear example of this, look no further than the evening news. A top story was seizure at the docks of a shipment of what appeared to be high-end designer purses at first glance. However, upon closer inspection, the goods were found to be nothing but fakes–good ones, yet certainly not produced by the manufacturer that retails the bags for more than $2,000 apiece. The entire shipment of several hundred purses was confiscated and later destroyed by officials. Do the math, and the losses were staggering. The question here is, who ultimately pays the price?

The answer: all of us, from the owner of the counterfeited brand to the consumer who unwittingly purchases the fake product to the companies that help move, use, or sell the goods. These items can be made with low-quality, sometimes toxic ingredients that can actually harm consumers, or at the very least cause them to lose faith in the brand, thinking that the quality has eroded, when in actuality, they never had the real thing in the first place. And if you find yourself mixed up in such a situation where goods that you were requested to move are seized, how does this impact your business?

To find out the answer, as well as how you can protect yourself from this and many other risks, call your professional insurance agent to learn more about insurance for supply chain intermediaries.

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