Goods in Transit vs Freight Liability: Which Do You Need?

Introduction

If you move goods for a living—whether you’re a courier, a same-day delivery firm, a regional haulier, or a specialist logistics operator—insurance isn’t just a “nice to have”. One claim for a damaged pallet, a missing consignment, or a temperature-controlled load that fails can wipe out a month’s profit (or more).

Two terms cause the most confusion in the UK logistics world: Goods in Transit (GIT) and Freight Liability (often called Haulier’s Liability or Carrier’s Liability). They sound similar, and both relate to cargo, but they protect different people, against different legal exposures, in different ways.

This guide breaks down the differences in plain English so you can choose the cover that actually matches your contracts, your customers, and the way you operate.

Quick definitions (plain English)

• Goods in Transit (GIT): Insurance that covers loss or damage to goods while they are being carried, typically on your vehicle, during loading/unloading, and sometimes while temporarily stored in connection with a journey. It’s often arranged to protect the carrier’s financial exposure, but it’s not the same as legal liability cover.

• Freight Liability / Haulier’s Liability: Insurance that covers your legal liability as a carrier for loss or damage to goods you’re transporting under contract, including the legal framework you operate under (e.g., RHA Conditions, CMR for international carriage).

Think of it like this:

• GIT = “What happened to the goods?”

• Freight Liability = “Are you legally responsible for what happened?”

Why the difference matters

Many operators assume they have “cargo insurance” and they’re done. The problem is:

• You might have liability but not enough value cover for the goods you carry.

• You might have GIT that pays for damage, but it may not respond the way you expect if the claim is really about contractual liability.

• Your customer may require one type specifically in their contract, and if you have the wrong one, you could be in breach.

In short: the right cover protects your balance sheet, your customer relationships, and your ability to win work.

What Goods in Transit insurance typically covers

GIT is designed to cover physical loss or damage to goods while they’re in your care during transit.

Common insured events

Depending on the policy wording, GIT may cover:

• Collision/overturning of the vehicle

• Fire and explosion

• Theft of the vehicle or theft from the vehicle

• Malicious damage

• Accidental damage during loading/unloading

• Water damage (e.g., from weather exposure)

What “in transit” can include

Policies often define “transit” as:

• On the vehicle

• During loading and unloading

• Temporary storage in the ordinary course of transit (e.g., cross-docking)

The exact definition matters. If you do multi-drop routes, store goods overnight, or use third-party depots, you need to check how the policy treats those stages.

Typical exclusions and limitations

GIT policies commonly exclude or restrict:

• Unattended vehicle theft unless strict security conditions are met

• Theft without forcible and violent entry

• Inadequate packaging

• Wear and tear, inherent vice, gradual deterioration

• Temperature-controlled failures unless specifically covered

• High-value items unless declared

• Certain goods (e.g., alcohol, tobacco, electronics) unless agreed

Who is GIT for?

GIT is commonly used by:

• Couriers and parcel delivery firms

• Hauliers and logistics operators

• Own-account operators moving their own stock

• Specialist carriers (e.g., fragile goods, exhibitions, medical equipment)

What Freight Liability (Haulier’s/Carrier’s Liability) typically covers

Freight Liability is about legal responsibility. It responds when you are held liable for loss or damage to goods under:

• A contract of carriage

• Standard trading conditions (e.g., RHA, FTA)

• Statutory frameworks

• International conventions (e.g., CMR)

What it pays for

A Freight Liability policy typically covers:

• Compensation you are legally liable to pay for loss/damage

• Legal defence costs (subject to policy terms)

• Sometimes certain consequential losses, if you become legally liable (often limited)

Why liability limits are often lower than goods value

Under many carriage conditions, liability is limited by weight or by a set amount per tonne, not by the full invoice value. That’s why Freight Liability can look “cheaper” than full-value GIT.

But here’s the catch: customers may still pursue you for more, especially if:

• You agreed a higher liability in your contract

• You didn’t use appropriate conditions

• You were negligent and the limitation doesn’t apply

Common exclusions and pitfalls

Freight Liability often won’t respond (or may be restricted) if:

• You accept liability beyond standard conditions without insurer approval

• You carry excluded goods or exceed declared limits

• You subcontract without correct contractual back-to-back terms

• You can’t evidence proper security procedures

• The claim relates to delay, penalties, or loss of market (often excluded)

The core differences (side-by-side)

Real-world examples (which policy responds?)

Scenario 1: Theft from an unattended van

A courier stops for 10 minutes, leaves the van, and goods are stolen.

• GIT: Might respond, but only if security conditions were met (locked, alarmed, no visible goods, etc.).

• Freight Liability: Might respond if you’re legally liable, but insurers will scrutinise negligence and security compliance.

Scenario 2: Load damaged due to poor strapping

A pallet shifts and goods are damaged.

• GIT: Often responds (accidental damage), but packaging/securement exclusions may apply.

• Freight Liability: Likely responds if you’re legally liable, but again, negligence could increase exposure.

Scenario 3: International shipment under CMR

Goods are damaged on a journey from the UK to France.

• GIT: May respond if the policy includes international transit.

• Freight Liability: CMR liability is often specifically covered under a Freight Liability/CMR extension.

Scenario 4: Customer claims full invoice value

The goods are worth £80,000. Your liability conditions limit liability to a much lower amount.

• Freight Liability: May only cover what you’re legally liable for (which may be limited).

• GIT: If arranged on a full-value basis, may cover the full value (subject to limits and terms).

Do you need one or both?

In many cases, the best answer is: both, structured properly.

You may need GIT if:

• You carry high-value goods where limited liability won’t satisfy customers

• You transport your own stock (own-account)

• Your contracts require “Goods in Transit” specifically

• You want broader protection for accidental damage, not just legal liability

You may need Freight Liability if:

• You carry goods for hire and reward under a contract of carriage

• You use RHA/FTA conditions and want cover aligned to those liabilities

• You do international carriage (CMR)

• You want insurer-backed legal defence for liability disputes

You may need both if:

• You do mixed work (some customers demand full value, others accept limited liability)

• You subcontract parts of the journey

• You operate in higher-risk sectors (electronics, pharmaceuticals, medical devices, alcohol)

• You want to protect cashflow and reputation even when liability is disputed

Key questions to decide what you need

Use these questions as a quick diagnostic:

1. Are you carrying your own goods or someone else’s?

2. Do your contracts specify liability limits or require full-value cover?

3. What’s the maximum value on one vehicle at any time?

4. Do you do international work (EU/EEA) under CMR?

5. Do you subcontract? If yes, are your subcontractors insured and contractually aligned?

6. What security measures do you have (tracking, immobilisers, overnight parking)?

7. Do you carry temperature-controlled or time-critical loads?

Your answers determine whether you need higher GIT limits, a Freight Liability policy aligned to your terms, or both.

Common mistakes that lead to uninsured claims

• Assuming “GIT” automatically covers any customer claim (it may not, depending on liability and exclusions)

• Not declaring the true maximum load value (underinsurance can reduce claims payments)

• Using the wrong trading conditions or not issuing them properly

• Accepting customer contracts that increase liability without telling your broker/insurer

• No proof of security compliance (e.g., no evidence of locked vehicle, no tracking logs)

• Subcontracting without back-to-back terms (you pay the customer, but can’t recover from the subcontractor)

What to tell your broker (to get the right cover)

To arrange the right policy structure, be ready to share:

• Your turnover split (own goods vs hire & reward)

• Typical goods carried and any excluded categories

• Max value any one vehicle carries

• Overnight parking arrangements

• Vehicle security (alarms, trackers, immobilisers)

• Claims history

• Domestic vs international routes

• Use of subcontractors and your contract terms

The more accurate you are upfront, the fewer surprises you’ll face at claim time.

Frequently asked questions

Is Goods in Transit the same as cargo insurance?

It’s often used as a “cargo” term in the UK, but the detail matters. Some policies are value-based, some are liability-based, and some combine elements. Always check the wording and the basis of settlement.

If I have Freight Liability, do I still need GIT?

Possibly. Freight Liability may only cover what you’re legally liable for (often limited). If your customers expect full invoice value protection, or you carry high-value loads, GIT can be essential.

What if I’m a courier carrying parcels from multiple senders?

You’ll usually need GIT tailored to multi-drop courier risks, plus liability cover aligned to your service terms. Security conditions are especially important for couriers.

Does either policy cover delays?

Delays and penalties are commonly excluded unless specifically agreed. If your contracts include service-level penalties, discuss this early—many insurers won’t cover pure delay.

Does GIT cover goods while stored overnight?

Sometimes, but not always. Many policies restrict cover to temporary storage “in the ordinary course of transit” and may exclude overnight storage unless declared.

What about temperature-controlled goods?

Standard policies may exclude deterioration due to temperature change unless you buy a specific extension and meet maintenance/monitoring requirements.

Conclusion

Goods in Transit and Freight Liability are often discussed together, but they solve different problems.

• Goods in Transit focuses on the goods themselves and can provide broader, value-based protection.

• Freight Liability focuses on your legal liability as a carrier under contract and convention.

If you move goods commercially, choosing the right one (or the right combination) comes down to your contracts, your load values, your routes, and your risk controls.

If you want a quick sense-check, start with your maximum load value and the liability terms you trade under—those two points usually reveal the right structure fast.