Goods in transit insurance is designed to protect sellers and buyers in the event of a loss of shipment. It is a type of insurance that covers inventory and other merchandise that is being shipped, but has not been received by the purchaser because it has been lost, damaged or destroyed.
Who Needs Goods in Transit Insurance
Most sales agreements between sellers and buyers will include information on who will need to purchase goods in transit insurance. This determines who is responsible for the lost or damaged goods in transit. Some are even legally obligated to purchase goods in transit insurance, but even if it is not legally required, sellers or buyers should consider goods in transit insurance to protect their finances and shipments.
Amount of Goods in Transit Insurance Needed
Once it is determined who is responsible to hold the goods in transit insurance policy, then you need to determine how much coverage is needed. The goods in transit policy should be based upon the maximum value of the goods being shipped during one trip. Cargo policies are usually determined by invoice costs, freight charges and advances to cover expenses incurred during shipping. Exporters may want to also include a profit margin in the policy, if it is not already included in the price.
Types of Goods in Transit Insurance
Goods in transit insurance is intended for one shipment and some may want to look into specific insurance related to their industry. Such can make sure that the insurance will meet your needs for each shipment based on specific terms, conditions and valuations. Common carriers insurance may not hold the carrier responsible for the loss or damage of the goods due to the carrier’s negligence. A freight forwarder’s insurance is good for infrequent shipments and caters to specific needs, cost and financial strength of the insured. Warehouse-to-warehouse insurance may not cover all shipments, but coverage begins when your responsibility begins.
Exclusions to Goods in Transit Insurance
There are a variety of goods in transit insurance to choose from, so exclusions may vary depending on the policy you choose. Although, some goods in transit insurance policies will exclude goods that are not in transit and may be in temporary holding or storage. Goods in transit insurance typically covers events that occur during unexpected delays in transit, but not planned storage. Other interruptions are usually covered, but it is important to check your policy to determine what is and is not covered.
Goods in transit insurance is designed to protect buyers and sellers from catastrophic financial losses due to costs associated with goods being damaged or lost during an event while they are in transit. When looking at goods in transit insurance, it is important to make sure the policy you are considering covers the specific type of transporting you are in the business of.