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Insurance Protection for Goods in Transit

24th August 1940, Page 33
24th August 1940
Page 33
Page 33, 24th August 1940 — Insurance Protection for Goods in Transit
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Explaining Some Aspects of a Form of Insurance that is not always fully understood by Operators. Need for Careful Analysis of the Policy Terms FOR most road hauliers some form of insurance is essential to cover their legal liability against damage to or loss of goods carried. This is particularly so in the case of large operators. This demand, during recent . years, has resulted in a form of policy being evolved which is calculated to give suitable protection at a reasonable premium. There are several aspects of " goods-in-transit " insurance, which are not generally appreciated by operators.

First, the insurance is one to cover legal liability to the owner of the goods damaged, lost or destroyed. If the vehicle owner be not responsible at law for the loss or damage, then no payment is made by the insurance company, which undertakes to indemnify the policy-holder only for the amount which he may have to pay because the goods were damaged or lost while in his care.

• When the Insurance is in Force •

Accidental damage caused through collision or impact is covered, as is also the risk of damage during the process of loading or unloading. The vehicle itself must be involved • in some kind of accident or impact to bring the insurance into force. Thus, damage caused through normal jolting or vibration is not • covered, because by agreeing to . include this risk insurers would be laying themselves open to claims actually caused through faulty packing and loading.

Where, for some reason, the operator particularly wishes all damage or loss to be covered, however, it is usually possible to obtain such an extension on payment of a higher rate of premium.

Other sections of the goods-intransit policy cover loss of all, or part, of the load through fire, burglary or theft. It should be observed, however, that these sectialas of the policy are usually subject to what is known as an "excess." This means that the operator, himself, is responsible for claims up to the amount of the excess; £5 is the usual "excess" figure, so that the operator is responsible for the first £5 of every claim in connection with fire, burglary or theft.

It is always a wise precaution to read insurance policies, but particularly so in the case of those concerned with goods in transit, as conditions are not entirely uniform and failure to appreciate what is actually covered may lead to unfortunate misunderstanding in the event of a claim being made.

Each vehicle insured in respect of its load is subject to a maximum value, which is stated at the time the insurance proposal is completed. Operators should see, therefore, that this sum is adequate for the most valuable load carried. Naturally, this is the maximum amount which will be paid should the complete load be destroyed by fire.

The maximum amount is also important in another connection. The goods-in-transit policy is subject to the "condition of average." If a loss occurs and. it be found that the full value of the load exceeds the sum for which it is insured, then only a rateable portion of the claim will be paid. If a load be insured for £200 but the load carried is actually worth £250, then the vehicle owner can only recover four-fifths of his loss. Assuming the loss is £20, therefore, the compensation paid vqould be only £16. The necessity of insuring loads up to their full value can readily be seen.

• Fulfilling General Conditions •

The general conditions which must be fulfilled are not onerous and are only such normal precautions as the prudent vehicle owner would take. They are as follow :—(a) No vehicle must be left unattended during the night, unless properly garaged; (b) Explosives or dangerous goods must not be carried; (c) Goods must be properly packed for conveyance in the vehicle.

On the form which requires completion when a proposal is made for goods-in-transit insurance, the opera tor is asked to state the classes of goods which he will carry. It is important that this question should be fully answered, because the standard policy excludes the following:— Livestock, furniture, glassware, earthenware, marble, gold and silver plate, jewellery, glass and watches, scientific instruments, electrical appliances, deeds, bonds, bullion, coins, works of art, books, patterns, tobacco or liquids.

If cover be desired for any of these goods then the policy is endorsed so that they are not excluded. For example, many operators convey livestock and desire cover for loss or fatal injury to animals. To provide this cover a special endorsement is attached to the policy.

• i Insuring Cattle in Transit •

While mentioning the insurance of cattle in transit, it is interesting to observe that fatal injury to animals is covered even if the vehicle be not involved in an accident, but death or slaughter must take place within 21 days of the date of the injury and must be certified by a veterinary surgeon.

Rates of premium depend upon the nature of the goods carried and the maximum amount to be insured in respect of each vehicle. An average premium for non-fragile goods is £1 per cent. up to £250 and 12s. 6d. per cent, in excess of that sum. Thus, cover for £300 would cost £2 16s. 3d. per annum. Where fragile goods are regularly carried the premium will, of course, be higher. Reference has been made earlier to the excess operative on the fire -and theft sections, but if the policy-holder be willing to bear the first £2 10s. or £5 on all claims, then a reduction of premium will be obtained.

Special policies are issued to concerns which regularly undertake the conveyance of household goods, the cost being comparatively low, although it is usually a condition that the operator bears the first £2 10s. of each loss, and no one article is deemed to be of greater value than 5 per cent. of the total sum insured.

RALPH OSBORNE.

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