Since the UK voted to leave the European Union in 2016, there has been public recognition that border delays and implications related to border controls would be inevitable once Brexit was formally completed. However, insurers have not adapted insurance products enough to mitigate the possible risk associated with an independent Britain.

Based on GlobalData’s 2017–20 UK SME Insurance Surveys, SMEs during this period have indicated that implications related to Brexit and political and economic stability were their biggest business concern. This of course changed in 2020, when the COVID-19 pandemic became their main worry instead. Yet Brexit still remained a major concern to SMEs in 2020, with 23.8% of all SMEs either very or extremely concerned about the resulting economic implications.

While there was great uncertainty related to the terms and conditions of how the UK would leave the EU, division of the customs union was bound to lead to increased border controls between the UK and EU territories.

The Brexit transition period ended on December 31, 2020. Since then, trade into and out of the UK has been held up by border delays, especially in France and the Netherlands. As a result, long waiting times at the UK border have resulted in the increased damage of goods in transit related to stock deterioration.

The impact of Brexit has raised questions of whether cover for goods in transit will apply to any perishable items affected by the delays. Such cover is currently only related to vehicle accidents and covers the breakdown of refrigeration equipment. Most policies will not cover general loss, damage, or expenses caused by delays.

Insurers’ reputations could suffer as claims related to damaged goods from border delays are rejected, leaving clients unhappy. In light of the current economic struggles related to the pandemic, insurers should utilize this opportunity to build trust in the industry. Creating products that could deliver a level of risk mitigation for the ongoing border delays and any resulting financial losses could help insurers attract and retain customers in the longer term. This is especially true given that consumers are increasingly influenced by a company’s brand image rather than targeted advertisements.