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Goods in Transit Insurance covers the physical loss of or damage to goods the property of the Insured, whilst in transit or in storage in the course of transit.
Goods, the property of a Manufacturer or anyone else who has an insurable interest in them, which have departed from the dispatch, loading, or shipping point but have not yet arrived at the receipt, offloading, or delivery point.
Generally goods are insured for ‘All Risks’ on ‘Open (annual) Cargo Policies’ or once off single shipments.
Open Goods Insurance Policies are declared either on a monthly or annual declaration basis, with other similar shipments held covered at rates, terms and conditions to be agreed. Generally a minimum and deposit premium is charged at inception and subsequently adjusted at the end of each declaration period to reflect the actual voyages and or shipments.
Single shipment policies are issued in relation to once off shipments, generally for customers who would not have a need for annual policies.
It is important to note that Freight Forwarders, Hauliers and other Companies contracted for the safe delivery of your goods are only liable in the relation to the damage caused to your goods as a result of their negligent handling of your goods.
If your goods are damaged and the Carrier is not found to be at fault then there is no cover for your goods. Carriers insurances do not cover your goods for ‘All Risks’ because under law they are not in a position to do so as they do not have an insurable interest in your goods.
When the ill fated ‘Herald of Free Enterprise’ tragically sank, the Goods owners, who had no Goods in Transit Insurances received no compensation from the Carriers, as the Carriers were not found to be legally liable.
In circumstances where the carrier is found to be negligent, then the compensation available is limited to their conditions of carriage and payments are calculated applying a rate per kilo in respect of goods lost or damaged.
The rates applied are called Standard Drawing Rights (SDRs) and were introduced by the IMF in 1971 in an effort to regulate international commerce. The level of SDRs paid per kilo depends on the conditions of carriage employed during the transits.
Domestic only transits are conducted under RHA (Ireland IRHA) and the terms under these conditions equates to €1,800 per tonne.
Payments in respect of International transits carried under the CMR Convention are made at 8.33 Standard Drawing Rights (SDR’s) per Kilo which equates to approximately €9,500.00 per tonne.
Under the standard Warehousing conditions (1996 Edition) of the Irish International Freight Association (IIFA) payments in respect of losses due to the Warehousekeepers negligence are made at €127.00 per tonne.
Some Manufacturers request Carriers to increase their conditions of carriage to include ‘full loads’, but again this is still only in relation to incidents, in which the Carrier is found to be legally liable.
However it is important for these Carriers to extend their insurance covers to include these increased limits otherwise the Carrier will be assuming liabilities above and beyond the limits of their Standard Trading Conditions and they may be left exposed for the difference between what they are insured for under their standard conditions and the increased liabilities that they may assume.
