What is goods in transit insurance and why do I need it?

What is goods in transit insurance?

A goods in transit insurance policy protects those who use their vehicle to pick up or transport goods, tools or materials/supplies for business purposes. It provides a high level of cover for the contents of your vehicle. Goods in transit is particularly important part of the policy for courier insurance or haulage insurance, providing added protection to your customers goods should they be lost, stolen or damaged in transit. Given the potential high financial loss that could be incurred in such situations it is very much expected by your customers to be insured to some level against this risk. It is therefore important to understand the value of the goods you are carrying, and additional relevant features that should be included in your cover. 

Getting the right goods in transit insurance

Without the correct usage stated on your fleet insurance insurance policy, any claim may be classed as void. In addition to this if you are a courier and don’t have the correct usage cover, you may end up with an IN10 (i.e. driving without the correct insurance) PLUS six points on your licence PLUS a fine.

Choosing the right courier insurance policy will depend on your particular business circumstances.

There are three main types to be aware of:

• Carriage of own goods - If you're using your van or pickup to carry your own work-related goods, tools and equipment, you'll need a standard business fleet insurance policy. 

• Haulage insurance - If you use your van or HGV to transport other people’s goods long distance, or get paid to move cargo, you’ll need a haulage insurance policy. 

• Courier insurance – If you deliver goods for reward on a shorter distance and likely have multiple drop offs, you’ll need a courier insurance policy.

For each of these types of goods in transit policy there are also varying levels of cover relating to the risk involved and it is important to be aware of what to watch out for.

Get an ‘All Risk Cover’ Policy

This policy covers protection against loss, damage, and theft. However, despite seemingly covering all risk, some policies still do not cover certain scenarios such as employee dishonesty, abandonment of cargo, rejection by customs, infestation, improper packing, acts of God, riots and strikes. It is important to check with your specialist insurance broker and find out what the exclusions are.

Be wary of weight related policies

Some policies will cover you for say up to £10,000 in loss, but the cover will be based on “£15 per kilo” or “£30 per ton”, for example. Such policies will make your cover negligible particularly for small high value items.

Get a ‘Theft Attractive Items’ policy

As a courier of goods you may not always be aware of the good you are carrying. In some policies theft attractive items such as items are mobiles, iPods, and computer parts are not covered. It is important to check exclusions with your specialist insurance broker.

Hazardous goods policies

If you are carrying hazardous goods it is important that you are covered for this level of increased risk. This may include carrying hazardous goods or delivering to hazardous locations.