In today’s complex global supply chains, the risk of financial loss due to documentary fraud is more prevalent than ever. Commodities Documentary Fraud Insurance (CDFI), developed in partnership with leading lenders and the London Insurance Market, provides essential coverage for direct financial losses caused by fraud where the insured has relied on falsified trade documents, such as bills of lading, warehouse receipts, or inspection certificates.
Understanding the risks: Document falsification and non-existent goods
Financial losses caused by fraud in the commodity sector now run into billions of dollars. In multiple recent cases, businesses have discovered that the commodities referenced in their documentation never existed, leading to denied claims under conventional cargo policies. The core of these frauds often lies in the assumption that someone else has already verified the documentation, leaving gaps in protection.
What’s driving the exposure?
-
01
Long and opaque supply chains
Reduced physical verification due to the length and complexity of global supply chains.
-
02
Digital documentation
While efficient, digital documents are vulnerable to manipulation.
-
03
Market volatility
Urgency and market fluctuations can lead to assumptions being taken at face value.
Building a resilient risk protection strategy
- Bridging the gap: Traditional marine cargo insurance covers physical theft or damage in transit, but not fraudulent documents or non-existent goods. CDFI fills this critical coverage gap.
- Holistic risk management: Ensure your insurance program addresses all-relevant risk exposures, not just physical ones.
How CDFI complements traditional insurance solutions
Specialist coverage
CDFI is designed to cover financial losses caused by fraud due to reliance on forged or falsified trade documentation.
Balanced protection
Consider CDFI alongside traditional Marine and Credit insurance solutions to build a resilient risk protection strategy.
Regular review
Regularly review your policy coverage to ensure it aligns with evolving documentation and verification risks.
Contact us for more information on commodities documentary fraud insurance
Use the contact from above to contact our specialists today and understand how CDFI can complement your existing insurance program and provide comprehensive protection.
