Vehicle Accidents & Cargo Liability: What’s Covered

Introduction

If you run a business that moves goods—whether you’re a courier, a wholesaler, a manufacturer delivering to customers, or a contractor transporting tools and materials—vehicle accidents are more than a “motor claim”. A single incident can trigger a chain reaction: damaged stock, missed delivery windows, contractual penalties, customer claims, third-party property damage, and even allegations that your business failed to protect goods in its care.

This is where cargo liability becomes critical. Many businesses assume that if the vehicle is insured, the cargo is automatically covered. In reality, commercial motor insurance and cargo-related covers (like Goods in Transit and Carriers Liability) are separate areas, with different triggers, limits, and exclusions.

This guide explains what’s typically covered when a vehicle accident damages cargo, what isn’t, and how to structure your insurance so you’re not left funding losses out of pocket.

Key terms (plain English)

Before we get into “what’s covered”, it helps to define the moving parts.

• Commercial vehicle insurance (motor insurance): Covers the vehicle and your legal liability for injury or property damage to third parties arising from use of the vehicle.

• Own damage (comprehensive): Covers accidental damage to your vehicle (and sometimes theft/fire), subject to excess and terms.

• Goods in Transit (GIT): Covers loss or damage to goods while being carried, loaded, or unloaded (definitions vary by insurer).

• Carriers Liability / Hauliers Liability: Covers your legal liability for goods you carry for others, often linked to contract terms and legal frameworks.

• Cargo liability (general concept): Your responsibility for the goods you transport—whether you own them or you’re carrying them for someone else.

• Consequential loss: Knock-on losses like lost profit, penalties, or business interruption due to the delay.

The big misconception: “My motor policy covers the cargo”

Commercial motor insurance is designed primarily for road risk: third-party injury/property damage, and (if comprehensive) damage to your vehicle. It is not automatically designed to cover the value of goods you’re transporting.

Some motor policies include limited “personal effects” or “tools” cover, but that’s not the same as insuring cargo or stock. If your business relies on moving goods, you usually need a dedicated Goods in Transit or Carriers Liability policy (or an extension under a broader commercial combined policy).

Scenario 1: Your vehicle accident damages your own goods

What’s typically covered

If you own the goods (for example, a retailer delivering stock to a store, or a manufacturer delivering products to a client), cargo cover usually sits under Goods in Transit.

A well-structured GIT policy may cover:

• Accidental damage to goods due to a road traffic accident

• Collision, overturning, or impact during transit

• Fire following an accident

• Theft (often with conditions, such as forced entry, security requirements, or unattended vehicle restrictions)

• Loading and unloading incidents (if included in the definition of “in transit”)

What’s typically not covered

Common exclusions can include:

• Inadequate packaging or poor securing of the load

• Wear and tear, gradual deterioration, or inherent vice (goods that naturally spoil)

• Temperature control failures (unless you have a specific refrigerated goods extension)

• Unattended vehicle theft unless strict security conditions are met

• Unexplained disappearance or inventory shortages

• Mechanical breakdown of the vehicle (unless it causes an insured peril)

Practical example

A van carrying boxed electronics is involved in a collision. The van is repaired under the motor policy (comprehensive). The damaged electronics are covered under Goods in Transit—if the policy includes accidental damage and the goods were properly packed and secured.

Scenario 2: Your vehicle accident damages someone else’s goods

If you are transporting goods for a customer (or on behalf of another business), the question changes from “what’s the value of the goods?” to “are you legally liable for the loss?”

What’s typically covered

This is often addressed by Carriers Liability / Hauliers Liability. Depending on your contract and the policy wording, cover can respond to:

• Your legal liability for loss or damage to goods carried

• Claims arising from negligence (for example, failing to secure the load)

• Liability under certain conditions of carriage

Some policies can also be arranged on an “all risks” basis for goods you carry, but it’s crucial to understand whether the policy is covering the goods themselves or your liability for them.

Why contract terms matter

Many cargo claims are decided by contract. If you’ve agreed to be responsible for goods “at your risk” from collection to delivery, you may have assumed a higher level of liability than standard law would impose.

If your policy is written on a liability basis, it may only pay where you are legally liable. If your contract makes you liable even when you weren’t negligent, you need to ensure the policy matches that exposure.

Scenario 3: Third-party injuries and property damage (the motor side)

Regardless of who owns the cargo, a road traffic accident can trigger third-party claims.

What’s typically covered under motor insurance

• Third-party injury (including passengers, pedestrians, other road users)

• Third-party property damage (other vehicles, buildings, street furniture)

• Legal defence costs for covered claims

Where cargo can complicate motor claims

Cargo can increase the severity of an accident (for example, spillage, debris, or hazardous materials). Your motor insurer may deal with third-party damage, but you may also face:

• Clean-up costs (sometimes covered under motor, sometimes not)

• Environmental liability (often needs a specialist extension)

• Hazardous goods conditions (if you carry chemicals, batteries, fuels, etc.)

If you transport higher-risk goods, it’s worth checking whether your motor and cargo covers include any hazardous goods restrictions.

What about “cargo falling off” and causing damage?

If your load falls from the vehicle and damages a third party’s property or causes injury, this usually falls under motor third-party liability, because it arises out of use of the vehicle.

However, insurers will look closely at:

• Whether the load was properly secured

• Whether the vehicle was overloaded

• Whether the driver followed safe loading procedures

If there’s evidence of reckless behaviour or serious non-compliance, it can complicate claims handling and may trigger policy conditions.

What’s covered during loading and unloading?

This is one of the most common grey areas.

• Motor insurance often focuses on incidents arising from use of the vehicle on the road.

• Goods in Transit may include loading/unloading, but only if the wording says so.

• Public liability may respond if a loading/unloading activity causes third-party injury or property damage at a customer’s premises.

Example

A driver uses a tail lift to unload a pallet. The pallet slips and damages the customer’s stock and flooring.

• Damage to the customer’s flooring may fall under public liability (depending on circumstances).

• Damage to the palletised goods may fall under Goods in Transit (if loading/unloading is included).

This is why businesses that deliver goods regularly often need a coordinated package: motor + GIT + public liability.

Typical limits, excesses, and how insurers calculate payouts

Cargo-related covers are often written with specific limits that can catch businesses out.

Common limit structures

• Any one vehicle limit: Maximum payable for goods on a single vehicle at the time of loss.

• Any one claim limit: Maximum payable per incident.

• Annual aggregate: Total payable across the policy year (less common for GIT, more common in liability policies).

Excesses

Cargo policies often have:

• A standard excess per claim

• Higher excesses for theft, unattended vehicles, or high-value goods

Valuation

Insurers typically pay based on:

• Invoice value or cost price

• Replacement cost (sometimes)

• Less salvage value

If you ship goods with high margins, check whether the policy covers selling price or only cost price.

Common exclusions that cause claim disputes

If you want fewer surprises at claim time, watch these areas.

1) Unattended vehicle conditions

Many theft claims fail because the vehicle was left unattended without meeting security requirements (locked, alarm set, goods out of sight, no overnight parking on the road, etc.).

2) Driver and vehicle security requirements

Policies may specify:

• Immobilisers/alarms

• Tracking for high-value loads

• Approved locks

• Secure compounds for overnight parking

3) Packing and securing

If goods weren’t properly packed, strapped, or palletised, insurers may argue the loss was avoidable.

4) Temperature and spoilage

If you carry food, pharmaceuticals, or other temperature-sensitive goods, you may need:

• Refrigeration breakdown cover

• Deterioration of stock cover

• Specific temperature logging requirements

5) High-risk goods

Some policies exclude or restrict:

• Tobacco, alcohol

• Mobile phones and high-value electronics

• Jewellery, precious metals

• Medicines

If you carry any of these, declare them upfront.

Do you need Goods in Transit, Carriers Liability, or both?

It depends on what you carry and for whom.

You may need Goods in Transit if:

• You transport your own stock

• You deliver goods you’ve sold

• You move tools/materials between sites

You may need Carriers/Hauliers Liability if:

• You transport other people’s goods for a fee

• You sign contracts that make you responsible for goods

• You operate as a courier, haulier, or logistics provider

You may need both if:

• You carry a mix of your own goods and customer goods

• You subcontract deliveries

• You store goods temporarily during a route

Subcontractors, hired-in vehicles, and “who is responsible?”

Cargo liability can get messy when multiple parties are involved.

Subcontracted deliveries

If you subcontract a job, you still might be contractually responsible to your customer. That means:

• Your customer claims against you

• You then pursue the subcontractor (or their insurer)

To reduce disputes, ensure:

• Contracts clearly state liability

• Subcontractors carry adequate GIT/Carriers Liability

• You keep proof of insurance on file

Hired-in or leased vehicles

If you use hired-in vehicles, check:

• Motor cover includes hired vehicles

• Cargo cover applies regardless of vehicle ownership

Claims checklist: what to do after an accident involving cargo

A fast, well-documented response can protect your claim.

1. Ensure safety first: Move to a safe location, call emergency services if needed.

2. Document the scene: Photos of vehicle positions, road conditions, damage, and the load.

3. Record cargo condition: Photos of packaging, straps, pallets, and damaged items.

4. Preserve salvage: Don’t dispose of damaged goods until the insurer agrees.

5. Notify insurers promptly: Motor insurer and cargo insurer (if separate).

6. Get third-party details: Names, addresses, vehicle details, witnesses.

7. Keep paperwork: Delivery notes, invoices, proof of value, temperature logs.

8. Mitigate loss: Reasonable steps to prevent further damage (insurers expect this).

Risk management: reduce accidents and reduce cargo claims

Insurers love evidence of control. It can also reduce premiums.

• Driver training: Defensive driving, fatigue management, route planning

• Load security procedures: Checklists, strap standards, weight distribution

• Vehicle maintenance: Tyres, brakes, tail lifts, ramps

• Security: Approved locks, secure parking, no visible goods

• Contract review: Avoid accepting “all risks” liability unless insured

• High-value load protocols: Two-person rules, tracking, timed stops

FAQs

Does comprehensive van insurance cover the goods I’m carrying?

Not usually. Comprehensive motor cover typically covers the vehicle and third-party liability. Goods in Transit or a similar cargo cover is usually needed for the goods.

If the accident wasn’t my fault, will my cargo still be covered?

Cargo cover can still respond depending on policy terms. Your insurer may then seek recovery from the at-fault party (subrogation). You still need your own cover to get paid quickly.

Are tools covered the same way as cargo?

Tools may be covered under a tools-in-vehicle extension, but it’s often limited and has strict security conditions. If tools are central to your work, consider dedicated tools cover.

Is theft from a van covered under Goods in Transit?

Often yes, but only if security conditions are met. Unattended vehicle theft is one of the most common areas for declined claims.

What if goods are damaged while unloading at the customer’s premises?

It depends on your policy wording. Some Goods in Transit policies include loading/unloading; others don’t. Public liability may also be relevant if you damage third-party property.

Do I need cover for refrigerated or temperature-controlled goods?

Yes, usually via specific extensions. Standard Goods in Transit may exclude deterioration due to temperature change or refrigeration breakdown.

What does “any one vehicle limit” mean?

It’s the maximum the insurer will pay for goods on a single vehicle at the time of loss—important if you sometimes carry high-value loads.

Can I insure goods at selling price rather than cost price?

Sometimes, but you must arrange it. Many policies default to invoice value or cost price. If your margin is significant, ask for the right valuation basis.

Final thoughts

Vehicle accidents don’t just damage vehicles—they can damage your stock, your customer relationships, and your cash flow. The safest approach is to treat motor insurance and cargo liability as connected but distinct risks.

If you regularly transport goods, make sure you understand:

• Who owns the goods at each stage of the journey

• What your contracts say about responsibility

• Whether your cover is for the goods themselves or your legal liability

• The limits per vehicle and any security requirements

Getting the structure right before an accident is what turns a stressful incident into a manageable claim.

Need help reviewing your current cover? Speak to a specialist commercial broker who can match your motor, Goods in Transit, and liability policies to the way your business actually operates.