What does goods in transit insurance cover?


Goods in transit insurance is a relatively straightforward concept in principle but it can occasionally lead to some complexities and misunderstandings.

Here is a sample of some of the frequently asked questions that we at Isis Insurance have encountered on this subject.

Why do I need goods in transit insurance?

When people talk about lorry insurance they are typically referring to insurance protection for accidents your vehicle may have.

Broadly speaking, that will include third party liability, which is a legal requirement in the United Kingdom, plus the voluntary but highly advisable wider vehicle cover for things such as theft, fire and damage during accidents.

However, there is another dimension and that involves claims your customers may make against you should their goods be lost, stolen, damaged or destroyed, whilst in your care.

To protect you against the financial consequences of such claims, you will need to have goods in transit insurance.

What does it cover?

We can’t really go into great detail because the type of protection you require may vary hugely depending upon the nature of your business.

For example, if your business is all about refrigerated lorries and the transport of perishables, your goods in transit cover may need to protect you against a number of categories of risk. By contrast, the policy may be significantly different if you are transporting what might be called thief-attractive goods such as electronics and gadgets.

If your business involves the transport of potentially hazardous cargoes, your needs will be different again.

We invite you to have a discussion with us as soon as possible on your options here.

Can’t I just get my customers to sign disclaimers?

Yes, you can but you need to be clear that under law, such disclaimers can be challenged and might prove to be of little value.

Apart from anything else, selling a service might be difficult if you are keen to state at the outset to your customers that you carry their goods at their risk and will insist upon them signing away their rights accordingly before transporting.

Such an approach might severely test even your best sales techniques!

What about if I am running a tractor only business?

If you are picking up another company’s trailers and hauling them, it will be important for your own protection to understand just where the respective insurance liabilities reside in terms of the relationship between you and your customer.

In that sort of situation, there may be a four-way relationship between:

  • you as the tractor owner;
  • the trailer owners;
  • the owners of the goods and very possibly;
  • a third party shipping and forwarding agent, if they have been responsible for independently hiring the trailer from the rental company and you as the haulier.

Unless you wish to engage in an in-depth insurance analysis for each and every transport you undertake, it might be wise to have your own goods in transit insurance cover anyway.

However, the inter-dependencies here can be complicated, so once again don’t hesitate to contact us for a more detailed discussion.

Can I go overseas with it?

Yes, policies are available covering overseas haulage.

Cover for European Union countries* may be relatively straightforward though for European countries outside of the EU there may be the need for special considerations. If you are considering driving outside of Europe altogether then many policies may have limitations and your requirements will become highly specialised.

We can help you by discussing all of these issues.