Goods in transit insurance protects a courier, haulage, delivery or other type of transport business against theft, loss or damage to the goods they're transporting. This is big business—according to the Department for Transport, there were 155 billion tonne kilometres of goods moved by GB-registered HGVs operating in the UK in 2019. If your business transports goods in the UK, here's what you need to know about cover before you buy a policy.
- What is Goods in Transit Insurance?
- What does Goods in Transit Insurance cover?
- Who needs Goods in Transit Insurance?
What is Goods in Transit Insurance?
Goods in Transit insurance provides protection against theft, loss and damage to goods whilst they're in transit. It's a type of insurance critical to nearly any business involved in transporting goods from raw materials to finished products. GIT would be used when goods are stolen, lost or damaged while in the care of the transport company, and a client tries to recover their losses or costs.
- Theft while in transit
- Damage caused by accidents during transit
- Loss during transit
- Damage during transit
- Unreasonably late delivery (on some policies)
In addition, a good policy can cover your 'tools of the trade' while they're being loaded or unloaded or during transit—this can include tools, plant, machinery, equipment, personal protective equipment, etc.
Goods in transit cover can be purchased as a separate, stand-alone policy or be incorporated as an add on to your other business insurance, such as commercial vehicle insurance, courier insurance, truck insurance, tradesman insurance, etc.
What does Goods in Transit Insurance Cover?
Goods in transit cover can protect against a range of mishaps, from theft to damage to loss. If a customer faces a financial loss as a result of any of these events, they can try to claim their losses from you—which is when goods in transit insurance kicks in. Here are some examples of situations that might be covered by a GIT policy:
Goods in Transit Examples
- An expensive piece of furniture is damaged whilst being transported by a furniture removal company.
- A courier delivering parcels has their vehicle broken into, resulting in the theft of all packages.
- A haulier transports fresh produce in a refrigerated truck. There is a failure with the refrigeration system and the produce is lost to spoilage during transport.
Goods in transit insurance can protect a wide range of goods whilst they're being transported throughout the supply chain. Depending on the risk or value, some goods may be subject to particular terms and conditions, for instance skip hire, bulk liquids, livestock, storage, caravan haulage, motor trade, vehicle recovery, etc. Here are some common goods that transport businesses insure for:
Common Types of Goods in Transit
- Agricultural Products
- Animals / Livestock
- Blood / Organs
- Business and Industrial Goods
- Car Parts
- Chemical Products
- Hazardous Materials
- Electrical Equipment
- Household Goods
- Medical Equipment
- Online Purchases
- Plant Equipment
What's Not Covered
Terms and exclusions vary from insurer to insurer, but here are some common exclusions you might find on a goods in transit policy. Be sure to read through the exclusions before you buy a policy—you'll find them in the policy wording.
- Cover beyond the stated policy limits
- Theft from an unattended vehicle in excess of a certain amount (e.g., £10,000) or if vehicle was not secure
- Certain merchandise may be excluded from cover (e.g., cash, computer equipment, electronics, etc.)
- Damage or confiscation by a government
- Storage of goods
Who Needs Goods in Transit Cover?
If you get paid to move or transport other people's goods, you probably need goods in transit insurance. For example, courier services, removal businesses and delivery companies, as well as motor trade and vehicle recovery businesses are all liable for the goods in their possession and can benefit from GIT cover.
- Delivery Business
- Motor Trade
- Vehicle Recovery
Also, it's common for customers to insist that haulage, removals and delivery companies have goods in transit insurance. So even if it's not required by law, you really might need it to win customer contracts. Plus, the cost of replacing lost or damaged goods could be very detrimental to a business that doesn't have GIT insurance.
If you're simply carrying your own work-related goods, tools and equipment, however, then you don't need goods in transit cover—you can get cover for these items through your commercial vehicle insurance.
Average Cost of Goods in Transit Insurance
Goods in transit cover can cost less than £4 a week (£200 a year), but prices will vary depending on a variety of factors like the type of goods you transport and the geographies in which you operate (e.g., UK only, UK and Europe or Worldwide).
For example, valuable goods are more expensive to replace if they're stolen or damaged. And particularly attractive cargo might be more prone to theft anyway, such as cars, wine, computers, phones, etc. Also, companies that ship dangerous goods are likely to pay a higher premium to cover their shipments during transit.
Haulage is a big business in the UK. In 2019 the Department for Transport reported 155 billion tonne kilometres of goods moved by road, including liquid, refrigerated, bulk, stock, waste, vehicles, waste materials and heavy goods, with an average length of haul of 67.3 miles. Overall, IBIS estimates the road freight transport industry in the UK at £27 billion a year.
|Road Transit Statistics|
|UK road transport market size||£27 billion|
|Number of UK road transport businesses||54,724|
|UK road transport employment||282,857|
|Volume of domestic road freight||155 billion tonne kilometres of goods moved|
|Average UK domestic haul length||67.3 miles|