Transit insurance only applies to goods transported over land. This coverage can
be purchased by the owner of the goods being transported, or the company hired to
transport the goods. For this reason, it is important to check whether the business
transporting your goods is well covered. The goods covered by transit insurance
can be raw materials, manufactured goods, packaging material, or goods owned by
someone else. Other than offering the policyholder indemnity from damage or loss,
the insurance coverage also covers other related expenses such as incidental storage,
and alternative accommodation expenses.
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TYPES OF TRANSIT POLICIES
1. Truck Cargo Policies :
These cover theft whilst a vehicle is unattended, or damage to the goods due to
collisions or movement.
2. Marine Policies :
This policy is applicable to sea and air freight and cover loading/unloading, problems
with the vessel or airplane, weather issues, etc. Specific types of policy will
be chosen according to your commercial situation.
3. Open Cargo or Open Cover policies :
This is a very common arrangement is ideal for regular importers or exporters. The
policy is for an agreed timescale or total value, or both. So if, say, you expect
to export £1m of goods in the next 12 months, you can cover that value and the insurer
does not need to know when or where the goods are moving.
4. Voyage policies :
Irregular traders may opt for specific cover with a policy that sets out the places
of origin and destination (not normally the duration, which can vary). Once the
goods arrive safely the policy expires and you do it all again the next time around.
5. Contingent Cargo policies :
This is rather more specialist if you think there is an unacceptable risk that your
counterparty may not accept liability or refuse to accept delivery in the event
of there being damage, then you might take out a secondary insurance of this kind
that kicks in if the primary cover fails to achieve your objective.
Typical coverage
Goods in transit insurance is not only for international, cargo shipping, and may
also be subscribed by any company which needs to have goods shipped from a supplier,
even is this supplier is just a few miles away. Typical coverage usually includes:
- Theft Whilst In Transit.
- Damage Caused By Perils During Transit.
- Loss Whilst In Transit.
- Damage Caused During Transit.
- Shipment Delay.
- Cost, Insurance and Freight (CIF) means the seller pays costs, freight
and insurance against the buyer's risk of loss or damage in transit to destination.