Goods in transit are exposed to a wide range of risks — from accidental damage and theft to weather events and handling errors. Transit & Cargo Insurance is designed to protect goods while they are being transported, whether by road, rail, sea or air.

At Rivergum Insurance Brokers, we help businesses arrange transit insurance that reflects how goods move through the supply chain, who bears the risk at each point, and how losses would be settled.

What Is Transit & Cargo Insurance?

Transit & Cargo Insurance provides cover for loss of or damage to goods while in transit, including during loading, unloading and temporary storage incidental to transit.

Cover can apply to:

• Domestic transport within Australia

• Imports and exports

• Goods moved by road, rail, sea or air

The key principle is that insurance should sit with the party who bears the financial risk if the goods are lost or damaged.

Who Typically Holds Transit & Cargo Insurance?

Transit & Cargo Insurance may be held by a range of parties, depending on contractual arrangements, including:

• Manufacturers and wholesalers

• Importers and exporters

• Retailers and distributors

• Construction and project businesses

• Logistics and supply chain operators

• Businesses transporting high-value or fragile goods

Importantly, it is not always the carrier who insures the goods.

Single Transit vs Annual Transit Insurance

Single Transit Insurance

Single transit policies cover one specific shipment from a defined start point to a defined destination.

This option may suit:

• Infrequent or one-off shipments

• High-value or unusual consignments

• Project cargo or specialised equipment

Cover is arranged specifically for the declared shipment and ceases once delivery is completed.

Annual (Open) Transit Insurance

Annual transit policies provide ongoing cover for multiple shipments over a 12-month period, subject to policy limits and conditions.

This option is commonly used by:

• Businesses with regular movements of goods

• Importers and exporters

• Distributors and wholesalers

Annual policies reduce administration and ensure consistent cover across shipments.

What Does Transit & Cargo Insurance Typically Cover?

While cover varies by policy, transit insurance commonly responds to:

• Accidental damage during transit

• Theft or pilferage

• Collision or overturning

• Fire and explosion

• Weather-related damage (subject to conditions)

Cover may apply:

• Door-to-door

• Port-to-port

• Warehouse-to-warehouse

The scope should align with how goods are actually transported.

Carrier’s Liability vs Transit Insurance

What Is Carrier’s Liability?

Carriers (such as transport companies and freight forwarders) generally hold Carrier’s Liability Insurance, which covers their legal liability for loss or damage to goods — not the full value of the goods themselves.

Carrier’s liability is often:

• Limited by legislation or contract

• Subject to strict conditions

• Capped at a relatively low amount per tonne or per item

Why Carrier’s Liability Is Often Insufficient

Carrier’s liability:

• Only responds if the carrier is legally liable

• May exclude certain causes of loss

• Rarely covers the full value of the goods

Transit & Cargo Insurance provides first-party cover, protecting the goods regardless of fault (subject to policy terms).

Basis of Settlement

Understanding how a claim is settled is critical.

Common Bases of Settlement Include:

• Cost value (cost to purchase or manufacture)

• Invoice value

• Invoice value plus uplift (to allow for profit, freight, duty or other costs)

• Replacement value (policy dependent)

The chosen basis should reflect the true financial exposure if the goods are lost.

Additional Considerations in Transit Insurance

Packing & Handling

Poor or inadequate packing may affect claims. Insurers expect goods to be packed appropriately for transit.

Storage Incidental to Transit

Temporary storage during the course of transit is often included, but limits may apply.

High-Risk Goods

Certain goods (e.g. electronics, alcohol, pharmaceuticals, fragile items) may require specific disclosure or conditions.

Geographic Limits

Cover territories must align with actual transit routes.

What’s Not Automatically Covered?

Transit policies commonly exclude or limit:

• Wear and tear or gradual deterioration

• Inherent vice or nature of the goods

• Delay (unless specifically insured)

• Inadequate packing

• Unauthorised deviations

Understanding these exclusions helps avoid disputes at claim time.

Why Transit Insurance Needs Careful Structuring

Gaps often arise where:

• Responsibility for insurance is unclear under contracts or Incoterms

• Reliance is placed on carrier’s liability alone

• Basis of settlement is inadequate

• One-off shipments are not declared

Why Arrange Transit & Cargo Insurance Through Rivergum?

We help clients:

• Identify who should insure the goods

• Choose between single or annual cover

• Align insurance with contracts and Incoterms

• Select an appropriate basis of settlement

• Assist with transit claims and recoveries

Our focus is on ensuring goods are insured from the moment risk passes to you — until delivery is complete.

Speak With Us

If your business transports goods — whether locally or internationally — we can help review your exposure and arrange appropriate Transit & Cargo Insurance.

Contact Rivergum Insurance Brokers to discuss your supply chain, contracts and transit risks.