Freight Liability vs General Liability: What’s the Difference?

If you move goods for a living—whether you’re a courier, haulier, freight forwarder, logistics company, or a retailer shipping products—liability risk shows up fast. A pallet goes missing. A load gets wet. A customer claims you caused damage while unloading. Someone slips in your depot.

Two types of cover often get mixed up:

• Freight liability (sometimes called carriers’ liability or goods in transit liability)

• General liability (in the UK, usually public liability and sometimes bundled with products liability)

They sound similar because both involve “liability”, but they protect you against very different problems. Getting the wrong one—or assuming one replaces the other—is a common reason claims get rejected.

Quick definition: freight liability vs general liability

Freight liability (carriers’ liability / goods in transit liability)

Freight liability insurance is designed to protect you when you are legally liable for loss of or damage to goods you are transporting, handling, or storing (depending on the policy).

It’s closely tied to:

• The contract you have with your customer

• The legal regime that applies to the journey (e.g., CMR for international road haulage)

• The limit of liability you accept (often based on weight, not the goods’ value)

General liability (public liability)

General liability (public liability) is designed to protect you if your business activities cause:

• Injury to a third party (e.g., a member of the public, a customer, a visitor)

• Damage to third-party property (not the goods you’re transporting as cargo)

It’s about accidents and incidents arising from your operations—at your premises, on customer sites, or sometimes while you’re working away.

Why people confuse them (and why that’s risky)

Both covers can be triggered during the same job. Example: your driver reverses into a customer’s wall while unloading and the pallet falls, damaging the goods.

• Damage to the wall: likely a public liability claim.

• Damage to the goods: likely a freight liability / goods in transit claim.

If you only have one of these covers, you may be protected for one part of the incident and exposed for the other.

What freight liability typically covers

Freight liability is about the goods as cargo—loss, damage, and sometimes associated costs—where you are legally liable.

Common insured events (policy wording varies):

• Accidental damage in transit (impact, crush, water damage)

• Theft from a vehicle (subject to security conditions)

• Loss of goods (misdelivery, non-delivery, disappearance)

• Damage during loading/unloading (if included)

• Sometimes: storage risks (if you have a “warehouseman’s liability” extension)

Key point: it’s not always “all risks”

Many policies are written around legal liability, not “all risks”. That means:

• If you are not legally liable, the insurer may not pay.

• If your contract limits your liability, the policy may only pay up to that limit.

Some businesses choose goods in transit (all risks) cover instead (or as well), particularly if they carry high-value goods and want broader protection.

What general liability (public liability) typically covers

Public liability is focused on third-party injury or property damage arising from your business operations.

Typical examples:

• A visitor trips over a cable in your office or depot and is injured

• You spill oil at a customer site and damage flooring

• Your forklift hits a customer’s racking system

• A member of the public is injured by falling stock during a delivery

Public liability usually includes:

• Compensation awarded to the injured party

• Legal defence costs (often in addition to the limit)

What it generally does not cover

Public liability usually does not cover:

• Damage to the goods you are transporting as cargo (that’s freight liability)

• Your own property or vehicles (that’s property and motor cover)

• Injury to employees (that’s employers’ liability)

Side-by-side comparison (plain English)

Real-world scenarios: which policy responds?

Scenario 1: stolen load from a parked van

Your driver stops overnight. The van is broken into and the goods are stolen.

• Likely cover: freight liability / goods in transit (subject to security conditions)

• Not typically covered by: public liability

Scenario 2: driver damages a customer’s loading bay door

While reversing, your vehicle hits the loading bay door.

• Likely cover: motor insurance for the vehicle-related property damage (depending on policy)

• Sometimes: public liability may respond if it’s not a motor liability issue (insurers often treat vehicle incidents as motor)

Scenario 3: goods damaged due to poor load restraint

A poorly secured load shifts and goods are damaged.

• Likely cover: freight liability (but check exclusions for inadequate packing/securing)

Scenario 4: customer claims you delivered to the wrong address

Goods were misdelivered and cannot be recovered.

• Likely cover: freight liability (misdelivery/non-delivery)

Scenario 5: member of public injured during delivery

A pedestrian trips over your tail lift area during a kerbside delivery.

• Likely cover: public liability

Scenario 6: temperature-controlled goods spoil

Chilled goods spoil due to refrigeration failure.

• Possible cover: freight liability if temperature deviation is included

• Often needs a specific refrigerated goods extension and strict conditions

The legal angle: why freight liability is different

Freight liability is heavily influenced by legal frameworks and contracts.

Contract terms matter

Your liability may be limited by:

• Standard trading conditions (e.g., RHA Conditions of Carriage)

• Your own terms and conditions

• The customer’s contract (if you accept it)

If you sign a contract that makes you responsible for the full value of the goods, but your insurance only covers liability under standard conditions, you can end up with a gap.

International road haulage (CMR)

If you carry goods internationally by road, liability may fall under the CMR Convention, which sets rules and limits.

A CMR policy is often arranged to reflect those exposures. If you do international work—even occasionally—this is worth flagging to your broker.

Common exclusions and “gotchas”

These are frequent reasons claims become complicated. Always check the wording, but common issues include:

Freight liability exclusions/conditions

• Inadequate packing, insufficient load restraint, or poor securing

• Theft conditions (e.g., unattended vehicle rules, approved locks, tracking)

• Unapproved overnight parking locations

• High-value goods limits (electronics, alcohol, tobacco, pharmaceuticals)

• Temperature-controlled goods exclusions unless endorsed

• Consequential loss (e.g., lost profits, contractual penalties)

• Delay, deterioration, or inherent vice

• Wear and tear

Public liability exclusions/conditions

• Work on high-risk sites unless disclosed (construction, rail, airports)

• Heat work/welding without precautions

• Pollution exclusions (unless sudden/accidental cover applies)

• Professional advice (that’s professional indemnity)

• Contractual liability beyond negligence (some contracts impose broader duties)

Who needs freight liability?

You should strongly consider freight liability if you:

• Carry goods for other people (haulage/courier)

• Handle goods during loading/unloading as part of your service

• Store goods temporarily (cross-dock, short-term warehousing)

• Operate as a freight forwarder or logistics provider

Even if you “only do local deliveries”, one lost or damaged load can be a five-figure problem—especially if you carry high-value stock.

Who needs general liability (public liability)?

Almost every business benefits from public liability, but it’s especially relevant if you:

• Have visitors to your premises (customers, suppliers, drivers)

• Work on customer sites (deliveries, installations, collections)

• Use equipment that could injure someone (tail lifts, forklifts)

• Operate in public spaces (kerbside deliveries)

Many contracts require public liability with a minimum limit (often £2m, £5m, or £10m).

Do you need both? In most logistics businesses: yes

For logistics, haulage, courier, and warehousing operations, freight liability and public liability are complementary.

A typical insurance “stack” might include:

• Motor insurance (including goods vehicle cover)

• Freight liability / goods in transit (including CMR if needed)

• Public liability

• Employers’ liability (legal requirement if you employ staff)

• Property insurance (premises, stock, equipment)

• Cyber insurance (if you handle customer data, routing systems, payment data)

How to choose the right limits (practical guidance)

Freight liability limits

Think about:

• Maximum value of a single load

• Typical goods types (high theft risk? fragile? temperature controlled?)

• Your contractual liability (limited by weight, or full value?)

• Whether you do international work (CMR)

If your customers expect you to cover full goods value, you may need all risks goods in transit rather than pure legal liability.

Public liability limits

Consider:

• Contract requirements (many sites require £5m or £10m)

• Footfall and public exposure

• Work environments (busy yards, retail deliveries, shared loading bays)

How to avoid gaps between the two covers

1. Map your process: collection, loading, transit, unloading, temporary storage.

2. List who owns the goods at each stage and what your contract says.

3. Check policy triggers: legal liability vs all risks.

4. Confirm loading/unloading cover: some policies treat this differently.

5. Declare high-value or specialist goods: don’t assume they’re included.

6. Align security conditions with how your drivers actually operate.

FAQs

Is freight liability the same as goods in transit insurance?

Not always. Freight liability is often legal liability cover. Goods in transit can be written as all risks (broader). The right choice depends on your contracts and the goods you carry.

Does public liability cover damaged goods I’m delivering?

Usually no. Public liability is for third-party injury or property damage, not the cargo itself. Cargo is typically handled by freight liability/goods in transit cover.

If my driver damages goods while unloading, is that public liability?

Usually it’s treated as a cargo issue, so freight liability/goods in transit is more likely. If you also damage the customer’s property or injure someone, public liability may apply to that part.

Do I need CMR insurance if I only do UK deliveries?

CMR is mainly for international road haulage. If you never leave the UK, you may not need it—but if you do occasional cross-border work, it’s worth arranging properly.

What if the customer’s contract makes me responsible for full value?

That’s a common gap. You may need higher limits or an all-risks goods in transit policy. Always share customer contracts or terms with your broker before you sign.

Does freight liability cover late delivery penalties?

Often no. Contractual penalties and consequential loss are commonly excluded. If your contracts include service-level penalties, discuss this specifically.

Bottom line

Freight liability and general liability solve different problems:

• Freight liability protects you when you’re responsible for loss or damage to the goods you carry.

• Public liability protects you when your operations cause injury or property damage to other people.

If you’re in transport and logistics, you’ll often need both—plus motor and employers’ liability—to avoid expensive gaps.

If you want, tell me what you transport (goods type), whether you do international work, and your typical maximum load value, and I’ll suggest a clean “coverage checklist” you can use on your next renewal call.