Insurance is the part of haulage nobody thinks about until something goes wrong, and then it is the only thing that matters. The terms can be confusing, partly because several different types of cover overlap, and partly because the liability limits are far lower than many people assume. This guide explains what goods-in-transit insurance actually covers and where the gaps tend to be.
Goods-in-transit insurance versus carrier’s liability
There is an important distinction at the heart of this subject. Goods-in-transit (GIT) insurance covers physical loss or damage to goods while they are being carried. Carrier’s liability cover, by contrast, protects the haulier against claims for which they are legally responsible, and that legal responsibility is usually capped by the conditions of carriage they trade under.
This matters because a haulier’s liability is often limited by weight, not by the value of your goods. If your consignment is light but valuable, the cover the haulier carries may fall well short of what the goods are actually worth.
RHA Conditions of Carriage
Most UK domestic haulage is carried under the Road Haulage Association (RHA) Conditions of Carriage. Under these, the carrier’s standard liability is limited to around £1,300 per tonne of the gross weight of the goods lost or damaged. Higher limits, from £2,000 up to around £12,500 per tonne, can be agreed for higher-value goods such as wines and spirits, but only by arrangement. Only RHA members may use these conditions.
The key takeaway: £1,300 per tonne is a weight-based cap. A pallet of lightweight electronics worth tens of thousands could weigh well under a tonne, so the default liability might cover only a fraction of its value unless extra cover is arranged.
CMR cover for international movements
Goods crossing borders by road fall under the CMR Convention, which applies automatically to international carriage and cannot be contracted out of. CMR liability is set in Special Drawing Rights at 8.33 SDR per kilogram, which in recent times has worked out to roughly £6,000 to £8,000 per tonne, considerably more generous than domestic RHA limits but still weight-based. Hauliers involved in any leg of an international road journey are subject to CMR even for the UK portion.
Where the gaps appear
- High-value, low-weight goods, where weight-based limits fall short of true value
- Loads carried under standard conditions without declared higher value
- Exclusions for things like inadequate packing, unattended vehicles or certain high-risk goods
- Assuming the haulier’s cover replaces your own marine or all-risks cargo insurance
Practical steps for shippers
- Ask which conditions of carriage the haulier trades under and what the liability limit is
- Compare that limit against the real value of your goods, not just the weight
- Declare high-value loads in advance so enhanced cover can be arranged
- Consider your own all-risks cargo policy for valuable or critical consignments
- Keep packaging and loading standards high, poor packing is a common claim exclusion
Other cover a haulier should carry
Goods-in-transit is only one piece of a haulier’s insurance. A properly run operator also carries motor insurance for the vehicles, and public liability cover for any injury or third-party property damage caused during their work, for example while loading, unloading or operating a crane on site. Employer’s liability is a legal requirement where staff are employed. When you engage a haulier, it is reasonable to ask to see evidence of these covers, particularly for higher-value or higher-risk work, because they protect you as well as the carrier.
It is also worth understanding the difference between cover that pays out automatically and cover that depends on proving fault. Goods-in-transit and all-risks cargo policies generally respond to loss or damage regardless of blame, within their terms. Carrier’s liability only pays where the haulier is legally responsible and the goods fall within the conditions of carriage. For peace of mind on a critical or valuable load, the surest route is often your own all-risks cargo policy set at the goods’ full value, sitting alongside whatever cover the haulier provides.
Understanding exactly what is and is not covered before goods move avoids unpleasant surprises after a loss. Northampton Road Haulage is happy to explain the cover that applies to your consignment. Call our Northampton team on 01604 385213 for a no-obligation quote and honest advice on the right approach for your load.