Owner Operator Insurance

What is Goods in Transit (GIT) Insurance?

Most things we see in our daily life were at some time ‘goods in transit’. Items may have been transported a couple of miles by road or rail or arrived from across the globe by sea or air.

Whenever goods are in transit they risk becoming stolen, damaged or lost. Goods in Transit Insurance provides individuals and companies with financial protection against any such loss or damage.

Do I Need Goods in Transit Insurance?

If you are responsible for distributing goods around the UK or importing or exporting products globally, you will usually at some point become responsible for the goods and need to cover against any risks. (Details can be found in your customer contract.) Carried goods are called Cargo and insurance for the movement of cargo is aptly named Cargo Insurance.

Normally freight contractors carrying your items aim to reduce their liability for any loss or damage to your items that are in transit. Usually this is achieved by a formal contract with a monetary limit per kilo or ton imposed by the carrier.

Frequently the limit doesn’t adequately cover the value of your goods and the carrier may also only be contractually liable for any damage if you are able to prove negligence on their part.

The sensible way to ensure your own goods are protected in transit is by organising your own Cargo Insurance which will ensure you have sufficient cover and will save you money on the cost of replacing or repairing goods.

Should you store and/or carry goods for other people or companies commercially, you are legally obliged to safeguard these items for the period they are in your custody.

A contract or conditions of carriage agreement can help limit your liability but doesn’t eliminate your responsibility for third party goods.

You can purchase insurance to protect Goods in Transit and this is referred to as Freight Liability Insurance. This insurance protection is usually purchased by couriers, hauliers and freight forwarding companies as well as air and rail carriers, ship owners and warehouse operators.

To Obtain Competitive Goods In Transit Quotation You Need:-

  • Cargo (own goods) Insurance
  • To disclose the nature of goods in transit
  • Details of packaging and packing for transit
  • An estimate of the value of the goods requiring insurance
  • The carrying method
  • The contract terms detailing buyers and sellers responsibility for the goods
  • Any required extensions to cover (e.g. items placed in storage or displayed at exhibitions)
  • Disclosure of any previous Goods in Transit Insurance claims made
  • Freight (third party goods) Insurance
  • Exact details on the nature of your company
  • Description of the goods in transit and/or storage
  • Company’s annual turnover
  • Any major and/or specific contracts
  • Any geographical limits
  • Full conditions of storage and/or carriage (RHA, CMR, BIFA, UKWA)
  • Disclosure of any previous Goods in Transit Insurance claims made

What Does Goods in Transit Insurance Cover?

This type of insurance covers items that may be lost, stolen or damaged whilst being transported from one place to another in a vehicle during the course of business. For example furniture being removed or goods from online retailers being delivered by hauliers or couriers.

Goods in Transit Insurance is extra cover to courier insurance or commercial vehicle cover which merely covers the actual vehicle whereas GIT insurance solely covers the contents which are the goods being transported.

Whilst some van and courier insurance policies may include a small element of GIT cover (up to a limited value), GIT insurance covers goods purely when they are in transit and not whilst they are in a parked vehicle at the depot.

A business that operates anything more than a single van will generally be required to obtain separate GIT insurance as would companies where the average payload per vehicle would amount to over £25,000 for replacement in the case of loss or damage.

GIT insurance is also required if the conditions of carriage demand more cover than courier van insurance is able to provide. (The Road Haulage Association demands standard cover of £1,300 per ton of goods).

Am I Legally Obliged to Obtain Goods in Transit Insurance?

No. But if you offer courier services, removal services or your business in delivering purchased items it is advisable. It’s also recommended for motor trade and vehicle recovery companies as well as when moving business equipment between premises.

Customers Often Demand GIT Insurance

Major customers normally insist on GIT insurance, so in reality you will need it as you won’t win contracts without it. Also bear in mind that if you had to foot the bill for lost or damaged goods you could quickly be out of business.

What Items are covered by Goods in Transit Insurance?

Materials, goods and cargo that are damaged, lost or stolen in transit may be covered by GIT insurance meaning you can recoup the costs.

Goods delayed by mislabelling, delivery to an incorrect address or left in the hands of a wrong recipient are covered as well as items not received at a specified time. You can claim for any resulting loss to your business and are covered if a recipient makes a claim for costs.

GIT insurance often covers items left in a parked vehicle overnight on a secure site. (Check individual policy for complete details.)

Cover levels vary according to individual policies therefore the insurer and broker must be informed on the exact type and frequency of carried cargo and given a realistic value.

The best policy for you will depend on your personal circumstances and/or the nature of your business.

The Claims Procedure for Goods in Transit Insurance

Contact the insurer or broker as quickly as possible regarding your claim and be prepared to submit the following documents:-

  • A completed claim form
  • A police report (when applicable)
  • Proof of purchase for the goods
  • Evidence that the goods were in the vehicle when the incident occurred
  • A bill for replacement or repair to show the value of the goods