Definition - What does Transportation Insurance mean?
Transportation insurance is a policy that offers coverage on the insured's property while it is in transit from one location to another via any necessary mode of transport. This coverage is based on the value of goods and the amount of risk the insurance company is taking on while the property is moved from loading to the stated destination.
Transportation insurance can apply to personal lines insurance but is also used in commercial insurance for businesses shipping products inland and internationally. This type of insurance can include transport by land, air, and water. Depending on the type of coverage you purchase, it could consist of the packing and unpacking, loading or unloading, transportation and storage of goods while in transit.
It also covers any damage or loss of the goods due to mishandling or other forms of damage. Examples of such damages could include accidents, explosions, impact fires, theft, and malicious damage or theft. Individuals often rely on this type of insurance when moving or relocating overseas. For businesses who rely on their inventory or goods to arrive as expected, this type of policy offers security and a degree of financial protection for their revenues if losses occur.
Insuranceopedia explains Transportation Insurance
There is always a risk that goods in transit may be damaged, lost or delayed. Businesses like wholesalers, retailers, and distributors can protect their property by purchasing transportation insurance.
The owners of goods being transported can purchase this coverage directly, or the company hired to transport the goods may be the policyholder. For this reason, it is important to check whether the business transporting your goods is covered and if there are any added costs. This helps in weighing whether you are better served to purchase a separate policy.
Coverage depends on the specific policy but may include theft, fire, and other similar perils. The goods covered by insurance can be covered with several different coverage types depending on the needs and type of transportation. Some typical inclusions are raw materials, manufactured goods, packaging material, or goods owned by someone else.
The insurance policy contract details will depend on the type of cargo, the weight, cargo's declared value and the goods' predefined areas of transport. Policies or insurance companies typically offer coverage ranging from specific risks to all risk or loss or damage, and premiums will vary accordingly.
Besides opting for transportation insurance, making sure the goods are packed safely and securely can also mitigate any loss and offers protection during the shipping process.
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