What does goods in transit insurance cover?
Whether used in an insurance or a legal context, the term goods in transit simply refers to the carriage of goods by road, sea, air or rail. When arranging such insurance, however, there is a veritable minefield of considerations that may need to be taken into account.
Just by way of example, let’s take goods in transit by road – what does goods in transit insurance cover?
- any goods carried by road suffer the risk of loss, damage or delay – insurance transit insurance is designed to indemnify the owner of those goods against such losses;
- the risk of any loss naturally increases in the event of those goods being carried overseas;
In transit within the UK
- even for transport within the UK, though, the picture may be complicated enough (just some of the issues may be read in greater detail on the official HM Revenue and Customs website);
- valid Heavy Goods Vehicle, or HGV insurance, in the UK requires the driver of the vehicle to be legally qualified to operate the HGV (or Large Goods Vehicle, as you may also see it described);
- if you are a haulage operator, and your HGV has a gross plated weight of more than 3.5 tonnes, you are also required to hold the relevant operator’s or “O” licence;
- within the UK, this might be either a restricted licence, allowing you to carry your own goods only or a standard national licence, allowing to carry either your own or other customers’ goods (a standard international operator’s licence lets you carry either your own or other customers’ goods overseas);
- hauliers not only need to comply with UK licensing regulations, but also other requirements relating to the fitting of tachographs in drivers’ cabs to ensure compliance with regulations on drivers’ working hours;
- if the goods you are hauling also happen to be classified as dangerous goods, a further raft of regulations applies;
- these are described in detail on the official website of the UK’s Health and Safety Executive;
- in brief, this describes the provisions of the UK’s Carriage of Dangerous Goods and Use of Transportable Pressure Equipment Regulations (commonly known as the CDG Regs);
- these are the regulations that give national enforcement of the European agreement on the carriage of dangerous goods by road (known as ADR);
In transit abroad
- insurance cover for goods in transit abroad may prove still more complicated;
- central of the carriage of goods abroad is a set of standard terms and conditions relating to the contract between the sender of the goods and the haulier;
- this goes by the long-winded title of the European Convention on the Contract for the International Carriage of Goods (“Convention relative au contrat de transport international de marchandises par route”), brought into effect within the UK by the Carriage of Goods Road Act 1965, and commonly referred to as the CMR note;
- although the CMR note is not a legal requirement, it carries much of the information necessary for the insurance of goods in transit abroad – it is the contract between sender and haulier (and one that makes clear that the sender remains responsible for the goods in transit);
- for those reasons the CMR note sets out the time and place where the note was completed; addresses of the sender, haulier and consignee, details about the goods and type of packaging, overall weight, customs forms, and identification as dangerous goods if that is the case;
- the CMR note sets out minimum liability limits for goods in transit (on a per kilo basis), but these are considerably lower than the indemnity provided by any goods in transit insurance cover typically found in the UK.
Call in the experts
If nothing else, the foregoing may have helped you towards an understanding of just how complicated a subject the insurance of goods in transit may be – especially if those goods are in transit overseas or are dangerous goods.
In order to safely navigate this potential minefield, you might want to entrust your insurance needs to specialist providers of such HGV cover.
About the Author
Eddie Johnson is an insurance industry veteran and HGV insurance expert who founded Isis Insurance – specialist commercial insurance brokers who are based in Cheshire, providing a bespoke service to growing businesses around the UK. Their insurance portfolio includes a wide range of insurance products, particularly those for businesses that operate heavy goods vehicles, such as HGV Insurance, Multi-Vehicle Insurance, Fleet Insurance, Goods In Transit Insurance and Employers’ and Public Liability Insurance. Follow Eddie on Facebook or Twitter.