Goods are constantly on the move, whether raw materials are being shipped to factories or finished goods being transported to providers.
However, each type of transit and transport carries a certain level of risk. However, goods transit is associated with financial and material risks. All of this makes transit insurance a non-negotiable purchase.
Let us understand what transit insurance policy is and why you must buy it.
Understanding Transit Insurance Policy
Transit insurance is a specialised and customised policy designed to cover financial risks associated with goods transportation. This policy covers the monetary risks and losses associated with the transit of goods, such as theft, damage, loss or other.
As a business it is important to protect your cargo and other valuables that are being transported by air, road, rail or sea with transit insurance. Proper transit insurance safeguards your inventory and provides peace of mind throughout the transit process.
Types of Transit Insurance
Insurance companies like TATA AIG offer multiple types of transit insurance policies. Here is a list of transit insurance policy types:
- Single transit insurance
- Open transit policy
- Goods in transit insurance policy (through third-party carrier cover)
- Goods in transit insurance (through carrier cover)
- Cover for multiple vehicles
- Customised transit insurance
- Overnight vehicle insurance policy
5 Benefits of Transit Insurance Policy
1. Financial Protection
The primary benefit of transit insurance coverage is the financial protection it provides. If the goods are damaged, lost or stolen during the transit, your insurance policy will cover financial losses associated with this loss.
The policy offers coverage for physical damage caused by accidents, natural disasters, fire, theft or other causes. Along with that, it also offers financial aid against third-party or personal liability. Given below is the list of inclusions in transit insurance coverage:
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- Natural or man-made disasters
- Accidents and collisions
- Loading and unloading mishaps
- Packing and unpacking risks
- Theft and malicious loss
- Accidental damages
It is essential to be aware of the exclusions of this policy, such as inherent defects, latent defects, lack of packaging safety, willful damage, no evidence of shortage or loss and more.
2. Industry Standard Compliance
Many trading companies and businesses require their suppliers to have a transit insurance policy as a prerequisite. Even if it is not a legal mandate to possess a transit policy, your contract may ask you to do so. It is an industry standard that you must abide by.
When you buy the best transit insurance online, you can avoid getting into trouble due to the lack of possession. Failing to have the appropriate insurance coverage can result in legal complications and further financial loss.
3. Various Modes of Transport
As mentioned above, transit insurance coverage is versatile and broad. This policy will assist you with all modes of transport, whether goods are being shipped by air, sea, rail or road. This flexibility is very important in today’s globalised and interconnected world, where the transit chain is very complicated.
For instance, your goods travel from your warehouse to the port by road. It is then loaded into the vessel that transports your goods by sea. At the receiving end, the goods are unloaded and transported to the final receiver by road or air.
4. Customisable Policies
One of the most important advantages of buying a transit insurance policy is the ability to customise plans to meet specific requirements, especially when you buy the policy from a reliable and dynamic provider.
Businesses can choose the coverage limit, include certain risks, choose add-on coverage and choose their sum insured. Customisation ensures their policy aligns with your operational and financial needs.
5. Affordable Rates
Despite the comprehensive policy coverage, transit insurance costs are affordable for most policyholders. Various factors, such as mode of transport, age of vessel or vehicle, and type of goods, often influence the cost of the policy.
When you invest in transit insurance, you can achieve significant savings in the long run, avoiding the financial burden of replacing, repairing or restoring damages.
Above everything else, the transit insurance policy offers peace of mind, and it is compelling enough to get one for your business.
Summing It Up!
As the global supply chain is more complex and interconnected, transit insurance has become even more vital for everyone, especially traders. From providing financial coverage to ensuring contractual compliance, transit insurance offers robust solutions and a comprehensive support system for the goods in transit.
By investing in a transit insurance policy, businesses can safeguard their assets and maintain operational continuity.
