Transit Insurance

What Does Transit Insurance Mean?

Transit insurance is a type of policy that covers business goods or personal belongings while they are being transported from one location to another. The coverage typically begins when the items are loaded onto the designated conveyance (such as a truck) and continues until they reach the destination specified in the policy.

This policy usually covers overland transportation (by truck, rail, airplane, or ferry in connection with land transportation) and excludes travel on ocean marine vessels.

Transit insurance covers property throughout all stages of the journey, including:

• Packing and unpacking
• Loading and unloading
• Transportation
• Storage of goods during the move

It also protects against damage or loss of goods while in transit due to mishandling or other risks such as accidents, explosions, fire, theft, and malicious damage.

However, losses caused by the shipper, such as improper packaging or inherent defects in the property being transported, are not covered.

Different types of transit insurance exist depending on your role in the transportation process. For instance, the insurance for someone owning the goods in transit will differ from that of someone responsible for transporting them.

Transit insurance is particularly useful for individuals and businesses that regularly transport goods over short or long distances, especially couriers.

Insuranceopedia Explains Transit Insurance

Transit insurance applies only to goods transported over land, including by automobile, rail, air, or ferries connected with land transport. Consequently, transportation by ocean marine vessels is excluded and requires a separate policy known as ocean marine cargo insurance.

Transit insurance can be purchased by anyone involved in the journey, such as the owner of the goods being transported or the company hired to handle the transportation. There are even trip-specific policies designed to cover a single trip, useful for moving offices or when ordering valuable equipment for a business.

When shipping goods, it’s crucial to verify whether the business handling the transport has adequate insurance coverage. Even if they are well insured, you may want to consider obtaining your own transit insurance policy. This protects you from potential issues, as the transporter’s coverage is beyond your control and may have insufficient limits, could be canceled without your knowledge, or may be invalidated due to breaches of warranties (like a locked vehicle warranty), leaving you exposed to significant financial loss.

Transit insurance covers goods such as raw materials, manufactured goods, packaging materials, or goods owned by someone else. In addition to providing indemnity for damage or loss, it also covers related expenses, such as incidental storage (e.g., if a truck breaks down and the goods need to be kept in cold storage until alternate transport is arranged) and alternative accommodation expenses.

The terms and rates of the insurance policy depend on factors like the type of cargo, the declared value of the goods, the journey’s route, time periods, and the predefined areas of transit.