Goods in Transit Insurance Explained

Goods in transit insurance covers stock, materials or products against loss or damage while they are being moved, whether in your own vehicles or by a carrier. A motor policy covers the vehicle, not what it is carrying, so any business that transports goods, its own or its customers’, has an exposure that goods in transit cover fills. It is essential for hauliers, couriers, tradespeople and anyone delivering or collecting stock.

The moment goods leave a fixed premises they fall outside buildings and contents cover, and a road accident, theft from a van or damage in handling can be a serious loss. Goods in transit insurance is the cover for that in-between stage.

What does goods in transit insurance cover?

It covers goods against loss or damage while in transit, typically from causes such as accident, fire, theft and, depending on the wording, loading and unloading. Cover can be arranged for your own goods, for customers’ goods you are carrying, and for tools and equipment in a vehicle. Policies set a limit per vehicle or per load, so that limit needs to reflect the value you actually carry.

Doesn’t my van insurance cover the load?

No. A commercial motor policy covers the vehicle and your liability on the road, but not the goods inside it. If the van is stolen or crashes and the stock is lost or damaged, the motor policy does not pay for the goods; goods in transit cover does. This is one of the most common gaps for tradespeople and small delivery businesses.

Who needs goods in transit insurance?

Hauliers and couriers carrying customers’ goods, tradespeople carrying tools and materials, retailers and wholesalers moving stock, and any business that delivers or collects. If you would suffer a real loss should a load be stolen or destroyed in transit, you have the exposure.

What about carrying other people’s goods?

If you carry goods for customers, you can be liable for their loss or damage, and the basis of that liability, and any trade conditions of carriage, affects what cover you need. Carriers often need cover matched to the terms on which they accept goods, which is a point worth taking advice on rather than assuming a basic policy is enough.

Getting the cover right

The right goods in transit limit and basis depend on what you carry, for whom, and on what terms. A broker can match the cover to your loads and your liability. To review your commercial cover, call 01795 841 310 or speak to the team.

Own goods cover or carrier’s liability: which do you need?

There are two types of goods in transit cover. Be clear which one you are buying.

	Own goods cover	Hauliers’ or carriers’ liability cover
Who buys it	Businesses moving their own stock, tools or materials	Hauliers, couriers and removal firms carrying goods for others for payment
What it pays for	Your own loss when goods are lost or damaged	Your legal liability to the owner of the goods
How much it pays	Usually the cost or replacement value, up to the policy limit	What you are legally liable for, often capped by your conditions of carriage or by convention
Typical examples	A plumber’s van stock, a florist’s deliveries, a wholesaler’s own lorry	A same day courier, a pallet network member, a general haulier

Conditions of carriage and the RHA limit

A carrier’s liability for goods depends on the contract with the customer. Many UK hauliers trade on written conditions of carriage, which limit liability and set out how claims must be made.

The Road Haulage Association publishes Conditions of Carriage for its members. The current 2024 edition caps liability at £1,300 per tonne of gross weight for goods that are lost, wrongly delivered or damaged, unless the customer agrees otherwise. The RHA says only its members are authorised to use them, and stresses that they must be properly incorporated into your contracts with customers.

Your insurance should match the terms you trade on. If you agree to higher limits for a particular customer, or your terms were never properly incorporated, you could be liable for more than your policy is set up to pay.

International haulage and CMR

The CMR Convention, given effect in the UK by the Carriage of Goods by Road Act 1965, applies to contracts for carrying goods by road in vehicles for reward where the place of collection and the place of delivery are in two different countries, and at least one is a contracting country. A haulier collecting in Birmingham for delivery to Lyon is a typical example.

• Liability. The carrier is liable for loss of, or damage to, goods between taking them over and delivery, and for delay, subject to defences such as the sender’s instructions, inherent vice and inadequate packing.
• Limit. Compensation is capped at 8.33 units of account per kilogram of gross weight short. The unit of account is the Special Drawing Right set by the International Monetary Fund, so the sterling value moves with exchange rates.
• Wilful misconduct. If the loss results from the carrier’s wilful misconduct, the carrier cannot rely on the limit.
• Notice. Apparent loss or damage should be noted at delivery. Non-apparent loss or damage needs written reservations within 7 days of delivery, not counting Sundays and public holidays. Delay claims need a written reservation within 21 days.
• Time limit. Claims must be brought within one year, or three years for wilful misconduct.
• No contracting out. Contract terms that depart from the Convention are void.

Because CMR applies by law and cannot be contracted out of, an international haulier needs a policy that responds on a CMR basis, not just domestic conditions.

Common policy conditions

A claim can be declined if a policy condition was not met. The usual ones are:

• Vehicle security. Doors locked, windows closed and keys removed whenever the vehicle is unattended. Many policies also require an alarm or immobiliser.
• Overnight parking. Loaded vehicles left overnight may need to be in a locked building, a secure compound or a staffed lorry park.
• Unattended vehicles. Theft from an unattended vehicle may be excluded unless there is forced and violent entry.
• Excluded or limited goods. Cash, jewellery, tobacco, alcohol, mobile phones and other high theft risk goods are often excluded or limited unless agreed.
• Load limits. A maximum value any one vehicle or any one load.
• Subcontracting. Cover may not extend to loads you pass to another haulier unless agreed.

What affects the premium

• The type of goods carried and how attractive they are to thieves.
• The maximum value per vehicle and per load.
• Whether you carry your own goods, other people’s, or both, and on what terms.
• UK only or international work, including CMR journeys.
• Number of vehicles, routes and overnight parking arrangements.
• Vehicle security, tracking and driver vetting.
• Claims history and the excess chosen.

How a claim works, step by step

1. Act at once. For theft, call the police and get a crime reference number. For an accident, make the scene safe.
2. Note damage on delivery paperwork. Record any visible loss or damage on the delivery note or CMR consignment note before the receiver signs.
3. Notify your broker or insurer quickly. Most policies require prompt notice.
4. Keep the evidence. Photos, delivery notes, invoices for the goods, tracking data and driver statements.
5. Do not admit liability to the customer without the insurer’s agreement.
6. Assessment. The insurer reviews the loss against the policy and, for liability claims, against your conditions of carriage or CMR.
7. Settlement. Payment is made up to the policy limit or the legal limit of liability, less any excess.

Worked examples

These examples are hypothetical and are only meant to show how limits work.

A domestic pallet on RHA conditions

An RHA member carries a 500 kg pallet of electronics worth £20,000 from Manchester to Bristol, and it is stolen. Under the RHA cap of £1,300 per tonne, the haulier’s liability is limited to £650. The owner’s own goods in transit or cargo cover would usually pick up the rest. If the haulier had agreed a higher limit with that customer, its policy would need to reflect it.

A tradesperson’s van

An electrician leaves the van locked outside a customer’s house for twenty minutes, and £3,000 of cable and fittings are stolen after a window is smashed. Own goods cover responds, less the excess, because the vehicle was locked and there was forced entry. Had the keys been left in the van, the claim could have been declined under the security condition.

Frequently asked questions

Do I need goods in transit insurance to work as a courier or haulier?

In practice, usually yes. Many customers, pallet networks and freight exchanges make it a condition of giving you work, and a carrier remains liable for the goods under its contract or CMR whether or not it is insured.

Does goods in transit cover loading and unloading?

It depends on the wording. Many policies include loading and unloading, but some exclude it or limit it to goods in your care at the time.

What is the difference between CMR and RHA conditions?

CMR applies by law to international road carriage for reward and cannot be contracted out of. RHA conditions are contract terms for UK work that only apply if properly incorporated into your contract.

Does goods in transit cover goods left in the van overnight?

Only if you meet the policy’s overnight conditions, such as parking in a locked building or secure compound. Without that, theft overnight is often excluded.

Will my public liability policy cover customers’ goods I carry?

Usually not. Public liability insurance often excludes property in your care, custody or control, which is why goods in transit cover exists.

More on business insurance. Ready for a price? Ask for a quote or call 01795 841 310.

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