Here, David Riley of a&b insurance brokers looks at the issues surrounding computer game freight theft and at what those operating in the industry can do to protect themselves. A recent incident saw a lorry load of ‘Brothers in Arms' games was hijacked near Leeds, the thieves making off with an estimated £600,000 worth of software. Sadly for computer games distributors, or producers exporting/importing goods directly, this is not a one off case.

Over the past year, the number of freight thefts targeting computer game shipments has increased steadily but, so far, without generating a great deal of publicity. The result of this is an industry unprepared for a problem that is only likely to get worse in the near future. How do we know this? Because it's happened before.

Just a few years ago, exactly the same problem hit the mobile phone industry. At one stage estimates put annual losses to freight theft at around £50million, a fact which resulted in many insurers pulling out of the market completely.

Parallels between the two industries are clear: small, high value products mean that individual shipments are worth considerable amounts and their contents can be easily sold on. But computer games also offer an added attraction. While mobile phone can and are re-sold after theft, they do present some difficulties in terms of security locks etc. There are no such hurdles with computer games - they can be stolen and sold the same day.

The cash incentive to target a shipment of computer games is obvious. So, what can be done to guard against it?

One of the first things that those involved with the distribution of computer games needs to check, is whether they are insured at all. It sounds obvious but in fact many that fall victim to freight crime aren't protected simply because of misunderstandings or a failure to understand how policies are constructed.

One common ‘misunderstanding' is for distributors to automatically assume the freight forwarder they are using is insured. While the recent deregulation of freight forwarders from FSA authority does mean that more are likely to offer an insurance package, this isn't guaranteed. It should certainly be one of the first things that distributors check.

Policy wording is another area that can leave distributors exposed to financial loss in the event of theft. For example, a firm may believe that a policy relating to ‘goods in transit' will provide cover from the point that goods start their journey to their final destination. This is not necessarily true. Some policies literally cover goods in transit i.e. they take no account of possible journey interruptions or storage requirements pre or post transit. Warehouses do get broken into; lorries do get hijacked from stop spots. Checking that policies cover these eventualities is a must.

Similarly, even if a policy does cover theft in these particular circumstances - qualifications of the term ‘theft' can result in companies believing they are protected when they are not. For example, what happens when a theft has occurred as the result of insider involvement or deception? The answer, in many cases, is that the policy will not pay out because the claim is classed as fraud. With estimates suggesting that up to 90% of freight crimes involve some form of insider collaboration, the scale of this problem is clear.

What this particular issue highlights is the need to work closely with freight forwards when it comes to security provisions - many policies will in fact only pay out if certain security measures are in place. Where possible, distributors should look for accreditations such as the TAPA (Transported Asset Protection Association) A class award, as certifications such as these testify that the forwarder in question operates to high security standards. However, simply sitting down and discussing security measures in place, including background checks on staff, can protect against potential mishaps.

Finally, it is important that distributors ensure that their policy protects them from the impact of theft. For example, the computer games industry is subject to extremely strict launch dates and late deliveries, whether due to theft or not, will need to be compensated for. Those responsible for games shipments therefore need to check that, should the worst happen, they are covered for potential ‘blame claims'.

These are some the most common issues relating to high risk freight crime but there are many more. To cover all potential threats and protective measures that the gaming industry needs to be aware of could take up a whole magazine, never mind one article. The important thing however is that distributors and producers dealing with the movement of games, whether purely within the UK or internationally, are aware that freight crime is an issue they need to take notice of.