Commercial Insurance for Goods & Construction Projects

What Is Goods in Transit Insurance?

Goods in Transit Insurance is a commercial insurance solution designed to cover specified loss or damage to insured goods while they are being transported from one location to another.

For businesses involved in manufacturing, distribution, wholesale trading, retail supply, logistics and transportation, the movement of goods is an important part of everyday operations. Products may travel between factories, warehouses, distribution centres, shops, construction sites and customer premises. During these journeys, goods can be exposed to risks that may result in financial losses.

A vehicle accident, a fire affecting the transporting vehicle or an insured theft incident may lead to damaged, destroyed or missing goods. Depending on the value of the cargo and the circumstances of the incident, the resulting loss can affect a company's cash flow, inventory management and ability to fulfil customer orders.

Goods in Transit (GIT) Insurance helps businesses manage eligible losses by providing insurance protection for specified events during insured journeys. The scope of protection depends on the insurer, the nature of the goods, the agreed transit arrangements, the insured geographical area and the wording of the policy.

At Mnara Risk and Wealth Advisory, we help clients understand the insurance options available for their transportation activities, assess relevant risks and identify important policy considerations before choosing cover.

What Can Goods in Transit Insurance Cover?

Coverage varies between insurance products. The following are examples of risks that may be included in a suitable Goods in Transit policy, depending on its specific wording and any additional extensions.

Who Should Consider Goods in Transit Insurance?

This insurance may be relevant to organisations that regularly transport goods as part of their commercial operations or have a financial interest in goods being moved between different locations.

• Manufacturers transporting finished products, raw materials or components between production facilities and distribution points.
• Wholesalers and distributors delivering commercial stock to retailers, businesses and customers.
• Retail businesses transferring inventory between warehouses, branches and stores.
• Transport and logistics operators moving goods for customers, subject to their legal responsibility and insurable interest.
• Importers and exporters arranging inland transportation of goods, with separate marine cargo arrangements considered where appropriate.
• Construction suppliers transporting equipment, fittings and building materials to project sites.

Important Factors When Choosing GIT Insurance

Selecting appropriate Goods in Transit Insurance requires more than identifying the type of goods being transported. The nature of each journey, the value of the cargo and the business's contractual responsibilities can influence the cover required.

• Nature of goods: Identify whether the cargo consists of electronics, machinery, furniture, food products, building materials, general merchandise or other goods. Fragile, hazardous or perishable items may require special terms.
• Value of each shipment: Consider the maximum value of goods carried in one vehicle or consignment, rather than relying only on average shipment values.
• Transport arrangements: Confirm whether goods travel in company-owned vehicles, hired vehicles or through third-party transporters.
• Geographical limits: Check which counties, routes and countries are covered. Cross-border movements may require specific approval.
• Policy period: Determine whether a single-transit policy or an annual arrangement is more suitable for the frequency of shipments.
• Excess and limits: Understand the amount payable by the insured after a covered loss and the maximum amount the insurer may pay.

Common Policy Exclusions and Limitations

Insurance policies do not cover every possible loss. Exclusions vary by insurer and should always be reviewed carefully. Depending on the policy, limitations may apply to the following situations.

• Ordinary wear and tear, gradual deterioration or inherent defects in the insured goods.
• Inadequate packing, unsuitable containers or improper securing of cargo where excluded.
• Unexplained shortages, inventory discrepancies or mysterious disappearance without evidence of an insured event.
• Delays, loss of market, contractual penalties or other consequential financial losses unless specifically insured.
• Transportation outside the agreed geographical limits, declared routes or policy period.
• Theft or loss occurring when vehicle security requirements have not been met.

What to Do After a Transit Loss

If insured goods are damaged, stolen or lost during transportation, prompt action and accurate documentation can help the insurer assess the incident.

The insurer will assess the claim against the policy wording, supporting evidence and applicable limits. Settlement is not automatic and depends on whether the circumstances meet the requirements of the cover.

What Is Contractors All Risk Insurance?

Contractors All Risk Insurance is designed to protect eligible construction projects against specified accidental physical loss or damage to insured works, together with certain third-party liability risks where included.

Construction projects involve significant investments in labour, building materials, machinery, equipment and professional expertise. Whether a project involves a residential building, commercial development, warehouse, industrial facility or other construction works, unexpected incidents can lead to costly damage and disruption.

During construction, a project may be exposed to accidental damage caused by events such as fire, certain natural hazards, collapse or other insured incidents. Depending on the policy wording, the contractor or project owner may also face liability for accidental bodily injury or property damage suffered by third parties in connection with the insured works.

Contractors All Risk (CAR) Insurance combines construction works protection with a third-party liability component where provided by the policy. The intention is to help eligible project participants manage insured financial losses during the agreed construction period.

Despite its name, Contractors All Risk Insurance does not mean every possible risk is covered. Policy exclusions, deductibles, conditions, insured values and project declarations remain important.

Mnara Risk and Wealth Advisory helps contractors, developers and project owners understand these considerations and explore suitable insurance arrangements based on the nature, size and duration of their projects.

What Can Contractors All Risk Insurance Cover?

The following are examples of potential coverage areas. Actual protection depends on the specific policy, insured project, extensions and applicable exclusions.

Who Should Consider Contractors All Risk Insurance?

Contractors All Risk Insurance may be relevant to parties with a financial or contractual interest in construction works. The appropriate insured parties depend on the project structure and contractual obligations.

• Building contractors undertaking residential, commercial or industrial construction projects.
• Property developers financing or managing the construction of buildings and other developments.
• Project owners who need to protect their financial interest in works under construction.
• Civil engineering contractors carrying out eligible infrastructure or engineering works.
• Subcontractors whose responsibilities may require insurance under the main contract.
• Organisations commissioning construction works where insurance is required by financing or contractual arrangements.

Important Factors When Arranging CAR Insurance

Construction projects differ in their design, location, materials, activities and expected completion dates. These details influence the risks being insured and the terms that may be offered.

• Project description: Clearly identify the construction activities, type of development and intended use of the completed works.
• Contract value: Confirm the appropriate insured value, including relevant labour, materials and other project costs as required by the insurer.
• Construction period: Ensure that the policy dates reflect the planned commencement and completion of the insured works.
• Project location: Provide accurate information about the site, surrounding properties, ground conditions and exposure to natural hazards.
• Insured parties: Determine whether the policy should include the project owner, principal contractor or other parties.
• Third-party liability: Consider appropriate limits for accidental injury or property damage claims arising from covered activities.
• Policy extensions: Review whether additional protection is needed for maintenance periods, existing property or other specified exposures.

Common CAR Insurance Exclusions and Limitations

A Contractors All Risk policy contains exclusions and conditions that define the scope of protection. Depending on the insurer and policy wording, these may include the following.

• Defective design, workmanship or materials, subject to the precise defect exclusion and any applicable exceptions.
• Normal wear and tear, corrosion, gradual deterioration or mechanical breakdown where excluded.
• Contractual penalties, liquidated damages, loss of profit or delay-related losses unless specifically insured.
• Loss or damage occurring outside the insured construction period or beyond the declared project scope.
• Liability to employees where it falls under separate employment-related insurance arrangements.
• Damage to certain existing structures, construction machinery or surrounding property unless appropriately included or extended.

What Happens When a Construction Claim Occurs?

If accidental damage or a potentially insured liability incident occurs at a construction site, the policyholder should follow the insurer's notification and claims requirements as soon as reasonably possible.

The insurer may appoint a loss adjuster or request further information before determining whether the loss is covered and the amount payable under the policy.