Among risks inherent to importing and exporting across international borders, misunderstandings regarding insurance coverage are the most common tripping point for middle-market companies, experts say.

While smaller firms might be tempted to rely on the insurance of a freight broker, cargo carrier or warehouse owner as a matter of convenience or as a means to quickly secure a contract in a competitive market, all firms preparing to ship or receive goods from overseas should assume as much control as possible over how those transactions are insured, experts said.

Equally risky for domestic middle-market firms, particularly for importers, is the practice of opting for a third party to arrange insurance coverage and roll the cost into an overall invoice for the contract, said David Jones, vp of risk management accounts at Lockton Cos. L.L.C. in Philadelphia.

Without controlling terms and conditions, a domestic company would be hard-pressed to obtain the right policy limits and coverage for the materials in transit, full indemnification for any potential losses and proper claims handling in the event of an incident, experts warned.

“It's convenient, but the risk is very high,” Mr. Jones said. “If there's a loss and the title (for the goods) still belongs to you, you're relying on someone else's terms. You don't know how good the insurance company is or what the deductible is. Control of the insurance is crucial.”

Mid-market companies should have little difficulty obtaining coverage for at least some import/export risks, Mr. Jones said.

Many high-frequency risks can be mitigated with a stock throughput policy, which combines ocean and inland cargo coverage with coverage for static locations such as warehouses or distribution centers. Supply chain insurance, meanwhile, would respond to losses in the event that a supplier finds itself unable to ship a product.

Other, more expensive endorsements can include political and credit risk, marine blockage, information technology network disruption and product liability.

“There are products out there that are more holistic, but it's (an) emerging (market),” Mr. Jones said.

Experts said companies should obtain as much of their overseas risk management portfolio from a single source to avoid potential gaps in coverage or conflicts that might arise from multiple carriers and policies responding to a single claim.

Some common points of contention within foreign commerce policies can include inventory valuation methods, exclusions based on cargo placement aboard a carrier vessel and indemnity limits where coverage is limited to lawsuits brought in the United States stemming from an international incident.

“That's where a lot of folks get caught off-guard,” said Shawn Burnsworth, a vp and practice leader for Wells Fargo Insurance Services USA Inc.'s international unit in Philadelphia. “They find themselves forced to respond to a suit in a foreign country, and they took it for granted that the policy was worldwide for jurisdiction, when really it only covers suits brought here.”