The insurance policy that covers your business goods and personal belongings while in transit is referred to as transit insurance. These policies primarily cover your goods from the time they are loaded(in a truck or other mode of conveyance) until you reach the destination declared on the policy. Transit policy is restricted to transportation overland and does not include marine transportation. The insurance companies are liable to cover the property in transportation through all stages of the journey such as:
1. Packing and unpacking
2. Loading or unloading
3. Transportation
4. Storage of goods during the move.
Goods in transit are covered against damage or loss while in transit due to mishandling, improper packaging, or other damages such as accidents, explosions, impact fires, theft, and malicious damage. Having transit insurance is particularly useful for people who regularly transport goods over large or small distances.
There are different types of insurances depending on the journey and the value of your goods in transit. However, you must understand the terms and conditions of the insurance policy to ensure that the worst does not come to pass in a worst-case scenario. The terms and conditions agreed to between the buyer and seller clearly indicate who is responsible for loss or damage to goods in transit.
Deciding an Amount
Choosing an appropriate insurance amount should be done by taking into consideration the maximum value being shipped in any one conveyance.
The amount included by transit insurance policies includes invoice cost, freight charges, 10-20 percent advance to cover the expenses incurred at the time of shipping.
Additionally, if you are an importer or exporter, prefer to ensure your goods based on their sale price.
Relying on the insurance of professional shipping companies for reimbursement may or may not be a feasible option as the carrier is responsible only for loss or damage when it is due to its own negligence. Ensuring your belongings and goods in transit is crucial but all types of coverage do not necessarily cover all shipments such as Warehouse-to-warehouse insurance. However, if your sales clause requires you to ensure the goods, you must go for a suitable transit insurance policy.