What Does Goods in Transit Insurance Cover?

If you have ever moved home you will know that the risk of damage to your possessions is many times higher when you try to move them to a different location than when they remained in relative safety at home. The elevated risk involved with loading, transporting and unloading goods doesn’t just apply to moving house, it is also true whenever goods are in transit. This elevated risk is the reason that goods in transit insurance exists. This article answers the question: what does goods in transit insurance cover? It also explains what it does not cover and who should get this type of insurance.

What is goods in transit insurance?

Since the transport of goods is inherently a risky activity it is not usually covered by typical insurance policies. There are many potential events that present a considerable risk of loss while in transit. An item might be dropped while loading onto a truck. The transporting vehicle might be forced to make a sudden stop causing goods to be knocked about and damaged. A collision, vehicle fire or rollover could cause complete destruction of the goods. Thieves might break into the vehicle and take items, or take the entire vehicle with them. Natural disasters frequently cause loss or damage to transported items such as lightning, floods, bushfires, earthquakes and storms. Depending on the conditions of the policy a wide range of insured events could be included.

 

Goods in transit insurance is a policy that covers the risks of damage, theft or loss of items due to an insured event. It usually lasts during the period from loading to unloading and protects liable parties from financial loss.

What does goods in transit insurance cover?

Value: the items insured by goods in transit are usually insured for the value of the goods according to the following conditions. If the goods have just been bought or sold then the sale price will be the insured value. Otherwise, it will be insured according to its value on the market.

 

Insurable events: the goods will only be covered in the event that an insurable event causes damage or loss. The specific events depend on the conditions of the insurance policy. In general, goods in transit insurance covers loss or damage caused by the following events:

 

• Vehicle collision or overturning of the conveying vehicle: Vehicle collisions with another vehicle or with a stationary object are common. The sudden impact can damage or destroy even well-secured and well-packaged goods.
• Theft and vandalism: Theft is covered if the goods were reasonably secured. This means that loss from theft is covered if it occurs through forcible entry into a locked vehicle or the place where it is garaged. It is also covered if the item was locked onto the exterior of the vehicle or trailer and the thieves have broken the lock to take the goods.
• Natural disturbances: The goods are covered if there is damage or loss due to natural environmental damaging events. Examples of these events include earthquakes, fires, storms, hail, lightning and flooding.
• Accidental damage: Accidental damage is common in all types of goods transport and this will usually be covered.

What doesn’t goods in transit insurance cover?

It is very important to be aware of exclusions to goods in transit cover. Exclusions come in the categories of items that are not usually covered and events that are not usually covered. Goods in transit insurance may not cover transport by air or sea. To insure items or events not included in standard goods in transit cover, contact us at GSK Insurance Brokers so we can help you with those.

Goods that are not usually covered:

• Cash, precious metals, jewellery, watches
• Valuables such as works of art, paintings, antiques, furs, collectables
• Explosives, bulk petroleum or gas
• Livestock
• Tobacco products or alcoholic beverages

Events that are not usually covered:

• Consequential loss: Usually, goods in transit insurance will not cover a loss that is the indirect adverse impact caused by damage to goods in transit. For example the loss to a business caused by not being able to use equipment that was lost in transit will not be covered.
• Deliberate loss caused by the transporting party: For example, if the people responsible for the goods in transit steal, or collude in the theft of the goods, it is not an insured event.
• Negligence: If the transporting party does not take reasonable care to protect and secure the goods then they will not be insured.
• Damage: Damage that occurs to goods due to the conveying vehicle striking kerbs or potholes.

Who needs goods in transit cover?

It is important for all businesses that are involved in transporting goods or equipment to ensure that they are covered with goods in transit insurance. It is important for private persons to ensure that they have cover for their items of value whether they transport them personally or through a third party. It is even important for businesses that transport their own goods and equipment between two of their sites. Goods in transit insurance is typically crucial in the following industries and professions:

 

• Couriers
• Removalists
• Transport and delivery
• Exporters, importers and distributors
• Customs brokers
• Charterers
• Logistics companies
• Manufacturers

What are the steps to choosing the perfect Goods in Transit Insurance?

Selecting a suitable transit insurance policy is a smart investment. However, with so many policy options available, it can feel a bit overwhelming. That’s why we have put together a few tips to help you make an informed choice.

1. Assess Your risks thoroughly

Understanding your unique risks is the first step. Consider:

Type of goods

Are you transporting fragile items like glassware, high-value electronics, or perishable goods like food? Maybe you’re transporting large shipments of bulk deliveries? Each category has different coverage requirements. Knowing which category you sit within can help you determine which policy best covers the goods you handle.

Transportation methods 

Think about whether your deliveries are primarily local, regional, or interstate. This can affect your exposure to risks like theft, damage, or delays. For instance, delivering to regional areas can involve longer distances on less-maintained roads, putting a tax on your vehicle over time. Whereas couriers working locally within cities typically experience higher traffic, increasing the likelihood of accidents. Clearly understanding where you drive and the risks you face is essential for choosing the right coverage.

1. Examine policy details

A policy’s fine print can significantly affect its suitability. Pay attention to:

Exclusions

Exclusions outline the specific scenarios or damages that the policy does not cover. Here are some common examples:

• Negligence: Claims may be denied if damages occur due to reckless driving or improper handling of goods.
• Unapproved Storage Methods: If your goods are stored in a vehicle overnight without proper security measures, theft-related claims may be rejected.
• Acts of God: Some policies may not cover damages from natural disasters unless specifically included.

Examine the exclusions in detail and assess if they align with your operational practices. If exclusions seem too restrictive, consider looking for a policy that offers broader coverage

Limits of liability

The policy’s limit of liability refers to the maximum amount the insurer will pay for a single claim. It’s important to check that this limit covers the full value of the goods you transport. Here are some key things to look out for:

• For couriers delivering high-value electronics, medical supplies, or luxury items, the limit of liability should reflect the maximum potential loss. For instance, if you’re transporting electronics worth $10,000, your policy’s limit of liability should be at least $10,000 (or higher) to cover you if the items are damaged or lost.
• If your deliveries vary in value, ensure the policy allows for adjustments or offers tiered coverage for different types of goods.

Deductibles

A deductible is the portion of a claim you are required to pay before the insurance policy covers the rest. Understanding the deductible amount can help you manage your cashflow and work out if the policy is affordable. Here’s what you can look out for:

• A higher deductible often means lower premiums, but it also means you’ll bear more costs upfront in case of a claim.
• A lower deductible may result in higher premiums but provides greater financial relief in the event of damage or loss.

Choose a deductible that balances affordability with risk tolerance. For example, if you’re confident in your ability to minimise accidents and theft, a higher deductible might be more cost-effective.

1. Think about long-term value

A key tip when choosing goods in transit insurance is to think about long-term value, not just the initial cost. While comprehensive coverage might come with a higher premium upfront, it can save you much more in the future. This type of policy can offer you greater protection against costly risks, such as accidents or theft, which can be financially devastating if you’re not properly covered. Investing in a policy with broader coverage is a smart decision to protect the future of both your business and yourself.

 

Partnering with a reliable insurance broker, like GSK Insurance Brokers, can make the process simple. With decades of experience helping couriers and delivery professionals, we bring valuable industry expertise to the table. Our brokers can help you find a policy that meets your immediate needs and the long-term growth of your business.

Protect your goods with expert insurance solutions

Now that you have seen what goods in transit insurance covers and how important it is whenever goods of value are moved, contact us at GSK Insurance Brokers for the right insurance package for your business or personal needs. We have even put together insurance packages that include goods in transit insurance according to the needs of specific professions, for example, our couriers’ insurance package. We have been helping people and businesses get the best insurance at the right price for over 40 years and would love to help you too.