Goods in transit insurance

Goods in transit insurance protects you if something happens to your property or goods while they are being moved from one place to another.

Goods in transit insurance protects you if something happens to your property or goods while they are being moved from one place to another.

Daniel Hutson
From the Motor team
5
minute read
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Posted 19 MAY 2021

What is goods in transit insurance?

Goods in transit insurance (also known as GIT insurance) protects you if your property or goods are lost, damaged or stolen while they are in transit from one place to another. For example, when they’re being transported from a factory or workshop to a retail outlet, business premises or private property.

Who needs goods in transit insurance?

This kind of insurance cover is particularly important for courier services, removal services and haulage companies.

If you offer delivery of purchased goods, such as if you run an online shop, goods in transit insurance can protect them while they’re on their way to the customer. It can also cover you for any costs if the item is undelivered.

Goods in transit insurance is also important if you’re moving business premises. It can cover your property and equipment for loss along the way and for damage sustained on the move. Check with your removals company that they have such cover in place and that the level of cover is appropriate for your move.

If it’s your goods that are being transported, remember that the carrier’s insurance is designed to protect their business, not yours. Remember standard policies are not generally designed to handle more complicated or unique situations. You may wish to include specific terms about how you want your goods to be covered by insurance in your contract.

What does goods in transit insurance cover?

Goods in transit insurance will typically cover the goods when they are in transit and while ‘under your custody and control’, meaning when you are responsible for their safety and security. Check the policy details to see what conditions apply around this, such as if the goods are required to be covered in storage immediately before transportation.

You’ll typically be covered for:

  • Theft
  • Loss
  • Damage cause by accidents during transit
  • Damage caused during loading, unloading or transit

Damage may cover a variety of things, from weather to infestation, or simply accidental damage from something being dropped during unloading or falling off the vehicle while it’s travelling.

You may be able to get your cover as an add-on to your vehicle policy, or as part of a package of business-insurance policies that are designed to protect your business against various risks. Alternatively, you might have to have an additional specialist policy, depending on which insurance provider you choose.

What do I need to look out for when buying goods in transit insurance?

When choosing your policy, there are a few things to check:

The terms around loading and unloading. For example, you may be covered if damage happens while a forklift truck driver is placing a loaded pallet on your truck, but you might not be covered for the 10 seconds earlier when that forklift was loading up on the other side of the yard. You need to fully understand where your liabilities start and finish.

The terms around refrigerated items, livestock or high-value items. For example, if you’re carrying goods that are temperature or humidity controlled, you’ll need to make sure you’re covered correctly if the control unit fails and the goods are spoiled. You may need to buy extra cover for some of these items.

Also check to see if the policy offers cover for the following and, if not, whether you can add it for an extra cost.

  • Your trailer
  • Your own items used to protect the goods, like straps, ropes, tarpaulin sheets and fastenings
  • Customers’ property
  • The driver’s personal property
  • Storage cover
  • Hazardous items
  • Transporting goods abroad

Some policies will have a maximum cost-by-weight for the goods being transported, should they be damaged. These policies are particularly useful if you operate under standard Road Haulage Association (RHA) conditions with a set liability per tonne. These should offer the level of cover you need, regardless of the actual value of the goods you are carrying.

Some policies may have some public liability or employer’s liability cover included, or allow you to add it on at an extra cost.

You can do a comparison quote for van insurance for haulage (using your vehicle for the carriage of goods for hire or reward) through Compare the Market. However, this will just protect you and the van, not the contents. If you want goods in transit insurance, you’ll either have to get this as an add-on to your policy or buy a standalone goods in transit policy directly from a specialist insurance provider.

Does goods in transit insurance cover my vehicle?

No. Goods in transit insurance is designed to cover just the contents being transported, not the vehicle. It’s in addition to the vehicle insurance itself.

Some commercial vehicle insurance may include an element or limited amount of goods in transit insurance, but you’ll need to check the policy details to be certain.

What exclusions does goods in transit insurance typically have?

Goods in transit insurance won’t cover:

  • loss resulting from poor, defective or insufficient packaging
  • shortage in weight
  • loss because of deterioration or variation in temperature – such as a breakdown of a refrigeration unit – unless agreed with the insurance provider and included in the policy
  • dangerous goods, money, livestock and high-theft-risk goods – unless agreed with the insurance provider and included in the policy
  • theft from unattended vehicles, unless agreed security is in place
  • confiscation or requisition by a government or public authority

Is goods in transit insurance required by law?

You’re not legally required to have goods in transit insurance, although customers might insist on it before allowing you to carry goods for them.

Plus, not having it could be very expensive. You are responsible for your client’s property, equipment or goods while they’re in your possession. Without the right goods in transit insurance you could be liable for any costs if that property is damaged, lost or stolen.

You could also find yourself open to claims for consequential loss – for example, the cost to a manufacturer of having to shut down a production line due to something not being delivered.

What level of cover do I need?

This will depend on what you’re carrying and whether goods are being carried under particular contractual conditions or international rules. The level of cover you choose should reflect your liabilities based on the contracts you have with your customers. It should be transparent to the consignee about exactly what you are liable for in the event of a loss. Types of contractual conditions can include:

  • RHA Conditions of Carriage – you’ll need to be a Road Haulage Association member and use the RHA's Conditions of Carriage correctly. This enables you to limit your liability for the goods you carry to a maximum of £1,300 per tonne (correct at the time of writing) on the gross weight of goods lost, wrongly delivered, or damaged. The RHA conditions set out the responsibilities of the customer and consignee towards the collection, transportation and delivery of goods.
  • CMR conditions – if goods are being transported internationally by road you’ll need to make sure your goods in transit insurance covers you for the liabilities created by the UN’s CMR convention. CMR stands for "Convention relative au contrat de transport international de marchandises par route". It’s a standard set of transport and liability conditions, which replaces individual businesses' terms and conditions.
  • Full value – if you’re not using particular contract conditions such as the RHA, you may need to look for cover for full responsibility for the goods.

Someone delivering documents or diamonds may need a completely different level of cover from a haulier shifting large volumes of gravel, or someone using a car transporter to move vehicles from manufacturer to dealer.

The level of cover you need will also depend on whether you’re transporting goods entirely in the UK, or if international collection or delivery is required.

That’s why providing full information and comparing policies can be so important.

If you’re a self-employed owner-driver delivering on behalf of another network – for example, Amazon Flex or similar – it’s best to check the required levels of goods in transit insurance you’re required to have before buying a policy.

Typically, goods in transit policies are non-refundable and fees may apply to make changes after the policy starts.

What’s the difference between goods in transit insurance and courier insurance?

If you’re offering courier services, courier insurance is designed to cover you for damage to the vehicle, or any injuries suffered by the courier, as well as any third-party damage to other vehicles, people or property.

Some courier insurance policies will also insure the contents of the vehicle but only up to a certain amount, and it can be hard for couriers to accurately estimate the value of the goods they’re delivering.

Goods in transit insurance covers damage or loss to goods, property, equipment or material transported in the vehicle. But it won’t cover the vehicle and won’t necessarily include public liability or employers’ liability, either.

What’s the difference between goods in transit insurance and commercial vehicle insurance?

You’re required by law to insure your vehicle for commercial use. But standard commercial vehicle insurance may only cover damage to the vehicle and driver rather than any contents.

If you’re using your van or other vehicle to carry your own goods, tools or equipment, they might be covered under your commercial van insurance policy. You should check and compare policies though to make sure you have enough cover for the value of anything you’re transporting.

Do I also need public liability insurance?

Your commercial vehicle insurance should cover you for damage or injury to people and property while in your vehicle. But your business probably also involves dealing with the public outside your vehicle.

For example, if you run a removals company, you might injure someone or damage property while you’re loading and unloading furniture. Public liability insurance covers you for injury to people and damage to third-party property when you’re not driving.

Do I still need commercial vehicle insurance?

Yes, goods in transit insurance only covers the contents of the vehicle and not the vehicle itself. Insurance is required by law for all vehicles, unless they are declared off-road and kept on private property.

Does goods in transit insurance cover goods left in the vehicle overnight?

Normally yes, so long as the vehicle is locked and parked in a secure place, but you should check the terms of your individual policy. Some policies might require the vehicle to be fully attended at all times.

Will goods in transit insurance cover goods transported outside the UK?

Your goods in transit policy may cover you to transport goods in Europe – you’ll need to check your policy. If you’re transporting goods outside Europe, you’ll probably want to arrange international shipping cover if goods are being shipped by sea.

I’m moving home – do I need goods in transit insurance?

If you’re using a removals service, they should have goods in transit insurance to protect your belongings during the move. Make sure you check the cover available and that it will be enough for your possessions – it might be lower than you anticipate. The removals company should be happy to share details of their policy with you. Sometimes you’ll be asked for an additional payment on top of the removal costs for the insurance, but it may be included in the price as standard. Usually there isn’t any excess, but ask if you’ll need to pay towards the cost of any claim made. If you’re moving your belongings yourself, you can arrange one-off cover for damage or loss.

We are changing business premises and moving ourselves. Do I need goods in transit insurance?

If you’re moving your business contents yourself, you can arrange one-off cover for damage or loss. If instead you choose to use a removal service, they should have goods in transit insurance to protect your office furniture and equipment during the move.

Does goods in transit insurance cover items stored in the depot?

No, as the name suggests it only covers goods that are in transit. To cover items stored in a depot or warehouse you’ll need business contents insurance.

Am I covered for loading and unloading?

Yes, some goods in transit insurance should cover you for loading and unloading, but you should check the terms of your policy. You may need to buy separate public liability insurance to cover harm to the public or third-party property when loading and unloading.

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