Goods in Transit Insurance is a type of insurance contract established between the insurance provider and the insured. Through this relationship, the insurer assumes the possible damages and losses that products may suffer during their transport.
We live in a global economy, and this interrelation of supply chains forces companies to require more significant insurance against possible damages to their products during transportation. GIT guarantees that shipments reach their recipients on time and in perfect condition while protecting transportation companies from liability. To avoid any problems that may appear during goods transportation, we recommend acquiring GIT.
Transport companies are obliged to respond in case of damage to cargo in transit. Just like with other types of insurance, the insurance provider and business manager must agree on the cost of goods to be transited. Hiring additional merchandise insurance for international transport is recommended to protect merchandise.
What do Goods in Transit Insurance cover?
GIT is “all-risk” insurance that covers, among others, the following risks:
- Damage caused by accidents
- The consequences of any untoward delay
Clauses are created to protect specific aspects for more concrete cases. The essential international clauses are Institute Cargo Clauses (ICC):
- ICC (A): Offers all-risk coverage with some exceptions, such as improper packing.
- ICC (B): It focuses on risks related to crashes, tipping, fire, breakdowns, explosions, loss of value during loading and unloading, and the same exception as ICC (A).
- ICC (C):
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What is not covered by goods in transit insurance?
But, if we have said that there is “all-risk” insurance, how is it possible that there are circumstances in which our insurance does not cover us? Usually, this happens because the party that contracted the insurance acts maliciously for the insurance to pass on the amount, or one of the parties acts in such a way that the correct measures are not taken. A clear example can be a drunk driver who may spoil our merchandise.
In legal terms, good faith must prevail in a relationship between policyholders. Otherwise, our insurance may not cover possible damages or losses. Some of the situations that GIT will not cover are:
- Expenses incurred for the delay.
- Manifest vice.
- Inadequate packing.
- Negligent conduct of the carrier.
- Bad faith or fraudulent conduct by the insured.
Is GIT a legal requirement?
GIT Insurance is not required by law; however, if a business delivers a purchase of goods or courier service, it must have a GIT insurance policy. Also, it is beneficial for those who have recovery and trade businesses. GIT is also essential at the time of transporting business equipment, as the cost of damaged goods can be fatal for a company’s bottom line. If you want to learn more about business insurance, take a look at our post describing everything you need to know about business insurance (Link to business insurance post).
How to calculate Goods in Transit Insurance
The factors that are often taken into account when calculating GIT are:
- Commercial invoice, the price of the policy will depend directly on it. It will not be the same price if the insured merchandise is covered in plastic as if it is a high-value car.
- The percentage that is passed on for import expenses and expenses at the origin.
- Freight costs of the transported goods.
- Along with any information that may be relevant.
YOA Insurance Brokers offers free advice on insurance coverage, risk engineering, and claims processing services both locally and abroad. If you have any doubts about GIT, do not hesitate to ask us here firstname.lastname@example.org.