Carriers cargo insurance for goods you carry for other people

This page is for transport operators carrying goods that belong to customers: owner-drivers and small fleets on general freight, subcontractors hauling for larger operators, couriers, refrigerated transport and furniture removalists.

If you own the goods on the vehicle and are moving your own stock, see our Marine Cargo Insurance page. If you need cover for the truck itself, see Truck Insurance.

Carriers cargo insurance protects customers' freight while it is in your custody for transit, subject to the goods, limits and conditions shown on the policy schedule.

It starts with broad cover for accidental loss or damage to the freight, then applies the exclusions and conditions in the wording. Depending on the policy and schedule, it can also cover deliberate damage by a third party and specialist freight such as refrigerated goods, livestock, machinery and household effects.

The schedule matters. On one wording we regularly place, general freight is covered as standard but refrigerated goods, livestock, machinery and household effects must be declared and accepted. A policy can look right at first glance and still leave out the load you actually carry.

This is the cover difference we care about most.

With accidental damage cover, a covered cargo loss can be paid to the owner of the goods without your customer first having to prove that you were legally liable. The claim can be handled as damage to the freight, rather than beginning with an argument about fault.

Without that, damage to a customer's freight starts as an argument about fault. That can mean a letter of demand and a dispute with the customer who gives you the work.

If a client shows us a cheaper policy, we compare it like-for-like before removing cover. We would rather negotiate harder with the market on the broader cover than make the premium look better by quietly narrowing the cover.

Sometimes the occupation changes what is available. Household removals and livestock cartage are the two common examples in the markets we use. If insurers decline accidental damage for that work, we quote defined events cover and add back useful options where available, such as theft, pilferage and non-delivery, and loading and unloading.

Defined events only covers the events named in the policy, such as fire, flood, collision or rollover. Theft or loading damage may need to be added separately.

Refrigerated cargo needs more than truck insurance. A commercial motor policy may insure the refrigeration unit as part of the vehicle, but that does not mean it pays for spoiled stock inside it.

The carriers cargo wordings we use can cover spoilage after refrigeration machinery fails and, depending on the wording, operator error such as the wrong temperature setting or the unit being left off. Refrigeration claims can have both a dollar excess and a time threshold before cover starts. On both wordings we place, the machinery has to fail for at least four consecutive hours before cover responds, and that same four-hour wait also applies where the cause is operator error. Operator error then carries its own excess on top: a flat $2,000 on one wording unless your schedule sets more, or 10 per cent of the claim on the other. On some wordings, spoilage caused by fire, flood, collision or rollover carries no four-hour wait. Maintenance matters too: keep the service records.

Common traps include:

• Theft from an unlocked or unsecured vehicle where the policy requires it to be locked when unattended.
• Packing problems caused by poor packing or a lack of reasonable care.
• Household or personal effects that were never declared where the policy requires them to be listed.
• A load worth more than the amount insured. The policy cannot pay more than the agreed limit for the freight itself, though on both wordings we place, benefits such as debris removal and onforwarding costs can be paid on top of that limit.
• Journeys outside the geographic limits shown on the schedule.

One of our transport clients was carrying about $250,000 of spirits. The trailer was stolen from the prime mover, the alcohol was removed, and the trailer was later set alight. The trailer itself, worth about $50,000, was handled under the motor policy. The stolen alcohol was a separate cargo claim, and the carriers cargo policy reimbursed the owner of the goods.

One event triggered two different policies. That is why we treat the truck and the freight as separate insurance problems.

We start with the work, not a quote screen. What do you cart? Who owns it? What is the highest-value load that could be on the vehicle? Do you subcontract work out or carry for a larger operator? Is any of it refrigerated, livestock, machinery or household furniture? What do your trading conditions make you responsible for?

Then we read what comes back. We check the cover basis, the goods actually insured, the maximum load value, theft conditions, excesses, subcontractor cover and any special conditions. The question is simple: what happens to the load on your trailer tonight?

We use specialist transport markets we know well and negotiate on both price and cover.

1. Setting the sum insured on the average load. Use the most valuable consignment that could realistically be in your care, not an ordinary day.
2. Buying on price without checking the cover basis. Two policies can look similar on a quote and behave very differently after a loss.
3. Assuming the truck policy covers the freight. It generally does not.
4. Not declaring unusual freight. Refrigerated goods, livestock, machinery and household effects can need specific agreement before they are insured.
5. Ignoring subcontractors. Check whether the cargo stays covered in a subcontractor's custody.