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Goods in transit insurance protects your goods, or items you’re transporting for another company, when they are on the move. Whether you’re a courier, delivery driver or logistics company, this type of policy offers crucial protection when the goods you handle are at their most vulnerable. Even if they’re wrapped in six layers of bubble wrap, your cargo could still be at risk.
Whether you are a courier transporting someone else’s goods or you need to protect your stock when it’s being moved between different business premises, goods in transit insurance can ensure you’re compensated for any loss, theft, or damage to the goods. It can also protect your business against legal claims for injury or damage to members of the public or their property while you’re out on a delivery.
Read on for more about goods in transit insurance, what is and isn’t covered, and the cost of a policy.
What is goods in transit insurance?
Goods in transit insurance, also known as GIT insurance, provides financial protection against loss, theft or damage to goods on the move. Whether you’re a courier delivering items to customers, or you’re moving your own business stock or equipment from one place to another, your policy can be tailored to your specific circumstances.
The key point to be aware of is that goods in transit insurance will only cover your cargo while it’s moved from one place to another. Your goods will no longer be protected once they are in storage or have arrived at their location. For this, you’ll need business contents cover.
What is goods in transit with public liability insurance?
Public liability insurance is frequently packaged alongside goods in transit insurance in one policy or available as an optional add-on. For example, courier insurance will often include both.
It’s useful because the transportation of goods poses many risks to third parties and their property. For example, a pedestrian could trip over a box left on the pavement, or a glass door could be shattered by a courier carrying a package. In these instances, public liability insurance would cover any legal expenses or compensation costs.
If you employ someone to deliver or transport your goods, you are legally required to insure them under employers’ liability insurance. Employees are not covered by public liability insurance.
» MORE: Compare Business Insurance
Who needs goods in transit insurance?
There is no legal requirement for you to have goods in transit insurance. However, if you want to work as a courier under a hire and reward contract (which is legally required for drivers who are paid to carry goods or passengers), you probably won’t be able to work without proof of goods in transit cover.
Regardless, the financial implications of a lost or damaged shipment could be crippling. That’s why anyone involved in moving items from place to place should consider taking out a GIT insurance policy.
» MORE: Business insurance: Do you need it?
What does goods in transit insurance cover?
Goods in transit insurance covers goods only while they are being transported from one place to another and under what’s called your ‘custody and control’. Typically, you’ll be covered for:
- theft of goods
- lost goods
- damage that occurs due to accidents in transit
- damage that occurs while loading or unloading
Many providers will allow you to tailor your insurance package to your specific needs.
What isn’t usually covered by goods in transit insurance?
Providers might have different ways of defining what ‘in transit’ means. In particular, incidents during loading and unloading can be open to interpretation. Make sure to clarify the exact limits of your liabilities with your insurance provider before you take out a policy.
Additionally, goods in transit insurance will usually have some exemptions to protect your insurance provider from having to pay out when you are clearly at fault or when the risk is too great. These could be for the following reasons:
- You use poor or insufficient packaging.
- Perishable goods have deteriorated due to a change in temperature such as a broken refrigerator.
- You are transporting money, livestock, dangerous goods, or goods with a high risk of theft (unless agreed with the provider).
- Goods are stolen from an unattended vehicle which wasn’t securely locked.
- Goods are confiscated by the government.
You should also be aware that the vehicle you use to transport the goods won’t be protected. You’ll need separate commercial vehicle insurance for this. Some providers may allow you to purchase a plan that includes both policies, however.
How much does goods in transit insurance cost?
The cost of your policy will be dictated by your cover limit. Goods in transit insurance is usually available with a variety of maximum cover limits depending on your needs. This could be anything from £5,000 to £5 million, or more.
Likewise, you can choose how much public liability cover you need, with limits usually ranging from £1 million to £5 million. The higher your cover limits, the higher your monthly premium.
Goods in transit claim examples
- Damage: During transit, some parcels tip over and break a fragile product. If it can be demonstrated that it was an accident, you should be covered.
- Theft: A van is broken into, and the stock inside is stolen during the vehicle’s overnight stop at a service station. The driver locked the doors before leaving the vehicle overnight, so the vehicle has not been left unattended and unsecured. As such, this should be covered.
- Loss: Some items go missing while being transported, but nobody is sure where. Even in the most organised businesses, mix-ups are possible, and goods in transit insurance can cover your back.
Goods In Transit Insurance – FAQs
The cost of goods in transit insurance is dictated by your cover limits. For example, a policy with a maximum goods in transit cover of £50,000 and £5 million in public liability will have a lower monthly cost than a policy with £5 million in goods in transit cover and £10 million in public liability.
» MORE: Public liability insurance
You don’t need to have goods in transit insurance for food delivery, although it might be considered a good idea. However, you are legally required to have hire and reward insurance.
Goods in transit insurance is not the same as hire and reward insurance. Goods in transit covers the actual goods you’re transporting against loss, theft or damage, whether your own or someone else’s, whereas hire and reward insurance covers your vehicle for the activity of being paid to transport people or goods.
No. Courier insurance is a package of various types of insurance which can provide comprehensive cover for a courier. Goods in transit insurance will likely be among these policies, along with public liability, van insurance and more.
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