What is transit insurance?

The development of the transportation sector has eased and increased the movement of goods from one place to another. Although the increase in transportation activities has helped various businesses to flourish and grow, the goods are subjected to various risks while in transit.

Transit insurance is one of the most important precautionary measures that helps in eliminating these risks. Let’s understand transit insurance in a depth.

What is transit insurance?

Transit insurance provides security to the goods while they are on transit from one place to another. It insures the policyholder against the damages or losses that might be caused to the goods when they are being carried by a private vehicle driven by the owner himself, his employ or any third-party carriers.

The premium for the insurance is decided based on the goods being transported and the risks involved in transporting the goods.

Types of Transit Insurance

Here are a few types of transit insurance policies.

1. Single Transit Insurance

The insurance is provided for a single transit only i.e. the coverage will end as the goods reach the destination. This policy is best suited for business owners who send out shipments occasionally.

2. Open Transit Insurance

As opposed to single transit insurance, this policy provides coverage for multiple transits. Any number of transits made by the business owners in the policy period will be covered by insurance. This is a very beneficial policy for business owners that frequently export, import items as they don’t have to purchase different insurance for each trip.

3. Third-Party Carrier Cover

This type of transit insurance provides coverage against damage and loss of goods when they are being transferred on third-party vessels or carriers.

4. Multiple Vehicle Cover

This type of policy covers any kind of risks to the goods when it is being transferred through multiple vehicles to the destination.

Benefits of Availing Transit Insurance

Here are a few benefits of transit insurance:

• Transit Insurance provides financial support to businesses in case of loss or damage to their goods. It helps the businesses recover from the loss and restart again.
• The coverage provided under transit insurance meets global standards and is beneficial for the export of goods. The insurance helps transport the goods internationally without worrying about the coverage requirements of the destination country.
• The transit insurance policy can be customized to suit any business type.
• The policy is easy to avail online and requires minimum documentation.
• The policy along with goods also provides cover for damage or loss of livestock in transit.

Coverage Under Transit Insurance

Goods are covered against:

• Any kind of damage caused by natural and man-made calamities
• Accidents like collisions, sinking of the vessel, etc.
• Risks involved in loading-unloading and packing-unpacking of goods.
• Thefts, malicious and accidental damages.

Who can buy a transit insurance policy?

Transit insurance policies can be taken up by the following:

1. Importers and Exporters
2. Manufacturers
3. Aggregators
4. Transporters
5. Custom House Agents
6. Traders

Many business owners transport their goods within India and globally. With uncertainties involved in transit, it is important to protect these goods from any natural or manmade risks.

A wide variety of insurance companies provide transit insurance with many coverage options and customizations to suit your business.

You must research and carefully choose the best policy for your business.