Transit Insurance Policy

Transit Insurance

Globalization in the business industry has increased the potential of business profits and led to better marketing opportunities and competitive products. along with this business expansion, the risks associated with the transportation of goods cannot be ignored as it has become higher. When the goods are being transported by land, air, or water, they face the threat of damages due to unforeseen contingencies. In case of any damage, businesses stand to lose a great deal of money. That is why a transit insurance policy is available to protect the financial risks faced by goods being transported.

Transit Insurance is one of the relocation insurance policies that cover the risks faced by goods when they are being transported from one place to another using a private, owned, or third party vehicle. It also covers the damage or loss of the goods while in transit due to mishandling or other forms of damage such as accidents, explosions, impact fires, theft, and malicious damage. There are different types of transit insurance depending on the insured person’s role in the journey.

Benefits of Transit Insurance Policy

Transit Insurance has come up with a sack full of benefits and advantages that offers financial stability to business owners. The followings are the mentions of those benefits. 

Global Coverage:

Coverage under transit insurance plans is provided on globally standard terms. Thus, even when the insured person is transporting his/her goods internationally, he/she can meet the coverage requirements of the country to which the goods are headed. 

Wide Goods Coverage:

The goods covered by transit insurance can be raw materials, manufactured goods, packaging materials, or goods owned by someone else. Other than offering the policyholder indemnity from damage or loss, the insurance coverage also covers other related expenses such as incidental storage (If the truck broke down and the goods need to be kept in cold storage nearby before alternate transportation can be arranged to complete the delivery), and alternative accommodation expenses.

Financial Security:

Transit insurance coverage provides financial support to businesses that might face considerable losses if their goods are damaged during transit. The policy, therefore, helps keep the business finances stable even after a loss.

Benefit To The Business:

Since any possible loss is covered under the transit insurance policy, businesses can also maintain their profitability even when any contingency damages their goods. This profitability also helps businesses maintain their solvency and their market value.

Wide Convenience Coverage:

It offers coverage for transportation via road, rail, sea, and air. The policy also provides coverage for damage to cargo, onshore or offshore, for a single journey. 

Invoice Value:

The sum insured is linked to the invoice value. Therefore, it is designed to protect the insured person’s consignment value. Additionally, there is a provision to increase the sum assured by 10% for incidental expenses. 

Online facility:

If anyone urgently needs this policy, it can be issued immediately online. Purchasing this policy online requires only a few steps. Just by providing a few details, one can obtain this policy. 


This policy can be curtailed according to the requirements of the policy seeker.

What Are The Different Types of Transit Insurance?

Transit insurance policies can be offered in multiple variants in India. These variants are as follows –

Single Transit Policy:

This policy covers one particular journey and is suitable for those businesses that do not transport their goods frequently. The policy would cover the goods which are being transported on a particular journey only.

Customized Policy:

This policy is a flexible transit insurance policy that can be customized for businesses to suit their coverage requirements. The customization can be done on the basis of goods type, transaction limitations, location limitations, mode of transportation, and any other specific requirements. 

Open Policy:

This policy covers multiple transits occurring within a given period of time which is usually one year. So, if businesses transport their goods frequently, they can opt for this policy and ensure coverage for multiple trips without buying a different policy for each one.

Overnight vehicles’ insurance Policy:

If the goods are to be stored overnight in a vehicle, this policy is suitable as it covers the goods in such cases.

Goods in Transit (carrier’s) Cover:

If the goods are to be transported using the transport vessel of a third party carrier, the carrier might not undertake the risks of damage to those goods. In that case, one can buy this policy to cover the damages when the goods are being transported using another carrier service.

Goods in transit (own vehicle) cover:

If the own vehicle of the owner is being used for transporting the goods, this cover will insure the goods against possible damages and transport risks.

Multiple Vehicles Cover:

If multiple vessels are used in the transportation of goods, this policy can be taken to cover the goods being transported through different vehicles. The policy would cover multiple vehicles under a single plan. This policy is suitable for businessmen who are involved in large-scale transactions.

Who Should Invest in a Transit Insurance Policy?

A transit insurance policy is suitable for businesses and individuals who are involved in the regular transportation of goods. The policy can be bought by the following types of parties –

  • Manufacturers of goods
  • Importers and exporters of goods
  • Custom house agents
  • Traders
  • Transporters or aggregators

Inclusions of Transit Insurance

Transit insurance coverage includes common perils which might cause damage to the goods which are being transported, as these types of transactions are always exposed to different types of risks and damages. These perils against which transit insurance protects the goods are as follows:

  • Earthquakes
  • Explosion 
  • Fire 
  • Lightning 
  • Any type of natural or man-made calamity
  • Overturning of the transport vessel
  • The collision of the vessel which damages the goods contained therein
  • The derailment of the vessel
  • Transport vehicle overturning
  • The sinking of the vessel
  • Risks faced while loading and unloading the goods
  • Risks faced in packing and unpacking goods
  • Accidental damages
  • Malicious damages
  • Impact damage
  • Theft, etc.

What Are The Exclusions of Transit Insurance?

A Transit Insurance policy offers benefits and facilities to the insured person. However, it also comes with certain exclusions for which it does not provide any coverage. To understand a policy comprehensively and to avoid future complications, it is important to go through the exclusions of the policy thoroughly. Therefore, the general exclusions of Transit Insurance are as follows.

  • Wilful misconduct of the assured person or misinterpretation of the policy intentionally will be excluded from the policy.
  • If there is any ordinary leakage or ordinary loss in weight or volume, the insurance company will not be liable to compensate for that.
  • If there is insufficient packaging and any loss or damage happens, the policy will not take any responsibility for that.
  • Inherent vice is not included in the policy schedule.
  • If there is any kind of delay and for that the assured person suffers any loss, the insurance company is not responsible for that.
  • Insolvency of ship operators is not the liability of the insurer.
  • If there is any kind of intentional damage, suicide, or suicide attempt, that too will be excluded from the policy.
  • Any damage or loss arising out of the nuclear weapon, radioactivity, or anything related to it, will not be compensated by the insurer.
  • Loss or damage arising out of unseaworthiness and unfitness of the vessel will also fall under the category of exclusions.
  • Any loss or damage incurred due to war, war-like situations, strikes, public unrest, riots, or anything like that will also be excluded from the policy.

Claim Procedure of Transit Insurance

Below are the general steps for the claim process:

  • Inform the insurance company as soon as possible since the occurrence of the event for which the insured person needs to file the claim.
  • The insured must submit the duly signed and filled claim form along with the supporting documents within the stipulated time after notifying the claim.
  • An expert or surveyor will be appointed on behalf of the company to review the documents and survey the claim. He/she will inspect the loss or damage.
  • Submit the other required documents as specified by the surveyor, and co-operate with him.
  • If no discrepancy is found, the claim will be settled within the stipulated time period.

Necessary documents:

Below are some of the documents which the insured person has to submit for timely claim settlement:

  • Original policy or certificate
  • Duly filled and signed claim form
  • Copy of billing lading
  • Survey report or missing certificate
  • Original invoice and packing list together with shipping specification or weight notes
  • Copies of correspondence exchanged with the carriers or bailees
  • Claim bill
  • Any other documents as requested by the insurance company

Frequently Asked Questions

Here are some of the frequently asked questions that you must know.

The insurance policy contract’s details and rates will depend on the type of cargo, the cargo’s declared value, the course of the journey, time periods, and the goods’ predefined areas of transit.

Inland Transit Insurance offers cover for Goods that are being transported within the country through Land routes.

The insurance company offers coverage for partially damaged goods and covers the financial losses that the insured person encounters due to this loss.

A deductible is the level of the claim which is not paid by the insurance provider. The insurance company pays only when the claim amount exceeds the deductible limit and if the deductible limit is paid by the insured, then the insurance provider pays the rest of the amount.

As duties are levied at the point of entry, no duty will be payable if goods are lost prior to arrival. However, damaged goods are still subject to duty. These charges can be covered in addition to the value of the merchandise. Because of a reduced hazard to the insurer, a specially worded clause and lower rate are used.

When the motor vehicle, motorcycle, caravan, trailer, or trailered boat is last moved at the destination in connection with the insured transit but within 200 meters of the carrying conveyance, the Transit Insurance terminates.

Your own insurance policy can be designed to meet your specific needs. it can be tailored to ensure sufficient limits of liability and relevant coverage types and provides easy claim handling. It may also be a less expensive alternative to insurance provided by the transit carrier.

This is probably the most restrictive form of cargo insurance available, although policies are issued occasionally for Total Loss of Vessel Only in the case of particularly hazardous undertakings. An FPA policy covers goods against total loss by transit perils. Other than General Average losses, partial losses are recoverable only in certain cases. 

This policy offers even broader coverage than the With Average policy. As the name suggests, this policy covers all transportation risks. An All Risk policy will not cover loss of market or loss or damage caused by delay, inherent vice of the goods, war, strikes, riots, and civil commotions, unless specifically included.

Yes, this signifies the recurring risk involved for a particular commodity and the safety measures deployed by the company.

Goods carried on the deck of a vessel are subject to greater hazard than those carried in holds, and it is unusual to cover deck cargo under an All Risk policy. It is usual to cover deck cargo on an FPA basis with the risks of jettison and washing overboard included. The rates for deck cargo are generally much higher than for cargo in the holds.