What does Goods in Transit insurance cover?

UYP 897 01 AECWhat does Goods in transit insurance cover?

According to Department of Transport statistics, 714,000 goods vehicles travelled between the UK and Europe during the months of April, May and June 2014 alone and a total of 2.8 million vehicles for the 12 months ending on the 30th of June 2014 – an increase of 10% over the previous year

These figures suggest that more and more goods are being transported by road and that at any one time many of those goods are in transit from one point to another, and frequently from one country to another.

Goods in Transit insurance

Because of the risk of those goods in transit being stolen, lost or damaged during their carriage from one place to another, protection against these risks is afforded by Goods in Transit insurance – often commonly known as GIT insurance. It may sometimes also protect the goods against the risk of late delivery.

As far as the carriage of goods to Europe by road is concerned, HM Revenue & Customs recognises the risk of loss, damage or delayed delivery and stresses the importance of GIT insurance.

Although HM Revenue & Customs also notes that carriers of goods in transit may have limited liability in the event of loss, damage or delay, this is largely a contractual matter between the consigning owner of the goods and the haulage contractor. If you are such a contractor, therefore, not only is the detail of that contractual arrangement important, but so too is the question of insuring your liability for the safeguarding of the goods in transit.

It may already be apparent, therefore, that insurance for goods in transit may be more than usually complex. You might therefore want to consult a specialist in the provision of such cover – such as those of us here at Isis Insurance – for expert advice and assistance in arranging the appropriate protection.

What does it cover?

In order to offer protection against the principal risks of theft, loss, damage or late delivery, the insurer needs to be able to assess the risks involved – just as the risks are calculated for any type of insurance.

In the case of goods in transit, these risks may be calculated according to two principal indicators:

  • the value of the goods in transit – not only might you be asked to produce a manifest indicating the total value of the goods you are transporting, but also to identify individual items above a certain value;
  • whether the carriage of those goods is taking place entirely within the UK or involves international transport;
  • whether the goods in transit are subject to the special rules and regulations relating to the carriage of hazardous or dangerous goods;
  • whether they are perishable goods – such as foodstuffs – at risk of damage following the failure of a refrigerated unit; and
  • whether the goods are those known to be especially attractive to thieves – for example, electrical equipment such as computers, televisions and mobile phones, or wines and spirits.

Your contract of insurance for such goods in transit also typically relies on your responsibility for mitigating any loss, damage or late delivery of the items in question – your responsibility, for example, in abiding by all relevant legislation on the carriage of goods and for taking all reasonable security measures, such as the fitting of security alarms, immobilisation devices and particular precautions if ever the cargo is left unattended.