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Goods in Transit Insurance


Do I need it?
You need goods in transit insurance if you are involved in trading your goods in the UK and abroad whether you are an exporter or importer.

Goods in transit insurance covers property against loss or damage whilst in transit from one place to another or being stored during a journey. This insurance can be taken out for goods being distributed in your own vehicle or by a third-party carrier, both domestically and abroad. If you transport your goods by sea or air then you need take out marine cargo insurance which includes the transit of cargo overland at each end of the journey.

There are real benefits for your business by taking out this cover through improved international trade administration, enhanced trading relationships and increased competitiveness, delivering greater profitability.

Another great benefit is that the cost for the cover can legitimately be passed on to the customer. A great number of major UK exporters sell on cost insurance and freight (CIF) or similar terms. This enables them to arrange goods in transit insurance in the UK – usually on an 'open cover' policy. As this insurance cost is passed on to the customer, who also gets the benefit of the insurance, this virtually amounts to free insurance which you, as the exporter, controls.

An important point to note is that many foreign buyers view this as essential service provided by the exporter, given that UK insurance rates are often cheaper than those available to the customer in his local market. It can be a real disadvantage for exporters who do not provide a 'package' which includes this insurance, and could lose business to competitors who do.

What is it?
Goods in transit insurance covers physical damage to, or loss of your goods whilst in transit by land, sea and air and offers considerable opportunities and cost advantages if managed correctly.

Goods in transit insurance can be arranged to provide cover either in the UK or abroad, although certain restrictions may apply when goods are transported into certain European countries.

A goods in transit policy will protect you from:

  • Theft (while in transit)

  • Loss (while in transit)

  • Damage caused by accidents during transit

  • Damage caused during transit

  • The consequences of any untoward delay (in some cases)

    • A typical policy will cover:

  • ‘All risks’ – subject to certain conditions

  • Loss or damage to property in transit including loading and unloading

  • Loss or damage to sheets, tarpaulin, ropes and other similar items

  • Loss of driver’s personal effects left in vehicle

  • Expenses incurred in debris removal, transfer of load etc.

  • Automatic reinstatement of sum insured

  • Temporary cover for fleet additions

  • Temporary vehicle substitutions

  • Traveller’s samples

  • Property removed from the vehicle temporarily to hotels, stockrooms or private dwellings

  • Property on approval with customers

  • Property on demonstration whist on any premises
    Property at exhibitions

  • Livestock

    • What types of insurance are available?
    Open cover – for all journeys
    This is the most usual type of policy which covers a number of consignments. It can be either for a specific value that requires renewal once the insured amount is exhausted or a permanently open policy that will be drawn up for an agreed period, allowing any number of shipments during the specified time.

    Specific (voyage) policy – for one-off shipments
    Although not the norm for goods in transit insurance, this is an insurance policy for a particular consignment and is usually referred to as ‘voyage policy’ as the insurance only covers that specific shipment.

    Contingency (seller's interest) insurance - back-up for physical loss or damage where you've not arranged the cargo insurance
    As an exporter you may often sell goods on terms where your customer (as the importer) is responsible for insuring (or at least bearing the risk of damage of or loss to) the goods. In these instances you are exposed to the risk of damage to the goods whilst in transit and then your customer refusing to accept the goods.

    What should I do now?
    Because of our wealth of experience in providing insurance advice to our clients over many years, we are able to offer individually tailored products and services for a range of situations

    For an informal discussion please call us on 01325 353 888 and we will be happy to discuss this further. Alternatively please email us at webenq@bibinsurance.co.uk.