Goods in transit insurance

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 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.

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

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 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.

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.

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.

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.