When an online order arrives two days after it was placed, the company whose name is on the box often never touched it. The product sat in a third-party logistics warehouse, was picked and packed by the 3PL’s staff, and was handed to a carrier the 3PL chose. Florida’s ports, airports and population growth have made the state one of the busiest 3PL markets in the country, with clusters around Miami, Doral, Orlando, Tampa and Jacksonville.
What 3PLs Do
A modern 3PL may receive containers from overseas, store inventory, fulfill online orders, kit and assemble products, handle returns, arrange freight and manage inventory systems for dozens of clients. Each of those services carries a different liability, and the more services a 3PL offers, the more its insurance has to cover.
Customer Goods in Your Care
A 3PL is responsible for using reasonable care with goods stored for customers. When goods are damaged, stolen or destroyed in a fire, the customer’s claim is against the 3PL. Warehouse legal liability coverage pays those claims. The 3PL’s own property policy covers its building and equipment, not the customers’ inventory. See our article on warehouse legal liability.
Contracts Decide the Exposure
3PL contracts often set how much the warehouse is liable for, sometimes limiting it to a dollar amount per pound or per item, and often require specific insurance with the customer named as additional insured. Accepting unlimited liability or full-value responsibility without matching insurance is one of the most common mistakes growing 3PLs make.
Fulfillment Errors
Shipping the wrong product, missing a retailer’s labeling requirements or losing track of inventory can cost a client money without any physical damage. These financial losses are not covered by general liability or warehouse legal liability. Some insurers offer professional or errors and omissions coverage for logistics services.
Freight Arranged for Clients
3PLs that book trucks for customers can be treated as freight brokers, with exposure for selecting a carrier that causes an accident or loses a load. Contingent cargo and contingent auto liability coverage address those claims.
People, Equipment and Data
Warehouse work brings workers’ comp exposure from lifting, forklifts and repetitive motion. Equipment breakdown protects conveyors and refrigeration, and cyber liability matters for 3PLs connected to clients’ order systems.
For a complete overview, see our page on warehousing and logistics insurance in Florida. Clients of 3PLs, such as importers and online brands, should see our pages on wholesaler and distributor insurance in Florida and manufacturer insurance.
Call the office nearest you. Se habla español.
Miami: 305-969-8776
Orlando: 407-993-2331
This article is general information and is not legal advice. Coverage depends on the terms of each policy.
