Inland Marine Transit Policy
Coverage for goods and merchandise while in transit between locations, protecting against loss from theft, collision, and other transit perils.
What It Is
An Inland Marine Transit Policy provides coverage for goods and merchandise while in transit between locations within the country. It protects the owner of the goods (shipper or consignee) against loss or damage from covered perils during transportation, loading, and unloading.
Transit coverage can be written on a per-shipment basis (single transit) or as an annual blanket policy covering all shipments during the year. Coverage typically includes theft, collision, overturning, fire, and other physical perils that can damage goods during transport.
This coverage is distinct from the motor carrier's cargo insurance, which protects the carrier's liability for goods they are transporting. The transit policy protects the cargo owner's interest regardless of whether the carrier's insurance responds.
Why It Matters for Brokers
Businesses that ship significant value in goods face substantial transit risk. The motor carrier's liability for cargo is limited by federal regulations and may not cover the full value of the shipment. A transit policy ensures the cargo owner is made whole regardless of carrier liability limitations. Brokers should evaluate transit exposure for any client that ships products, raw materials, or equipment between locations, especially when shipment values regularly exceed the carrier's liability limits.
Real-World Example
A wine distributor regularly ships $200,000 in wine per truckload between their warehouse and restaurant clients. During transit, the refrigerated truck's cooling system fails, and a $200,000 shipment of wine is damaged by heat exposure. The motor carrier's cargo liability is limited to $100,000 per occurrence. The distributor's inland marine transit policy covers the remaining $100,000 loss.
Common Mistakes
- 1Relying solely on the motor carrier's cargo insurance when the carrier's liability limits may be far below the actual shipment value.
- 2Not covering high-value shipments with transit insurance because the client assumes the carrier bears full responsibility.
- 3Setting annual transit policy limits based on average shipment values rather than maximum possible shipment values.
How brokerageaudit.com Handles This
Policy Checker evaluates transit exposure by comparing reported shipment values against available coverage limits, whether through the carrier's cargo insurance or the client's own transit policy.