‘Commercial considerations’ transit insurance extension

Unsure on the benefits and limitations associated with the 'commercial considerations' transit insurance extension? Here's why it's worth considering.

From time to time, situations can arise where a haulage contractor feels obliged to settle a claim for loss or damage to a consignment even though, from a contractual perspective, they may not be liable. In this scenario, firms should consider arranging a ‘commercial considerations’ extension under their hauliers’ liability transit insurance policy.

Some of the benefits of arranging a ‘commercial considerations’ extension under a hauliers’ liability transit policy include:

  • Commercial considerations extensions are typically significantly cheaper than arranging full responsibility cover.

  • The insured is not normally required by the insurer to justify why he or she wishes to take advantage of the extension following loss or damage.

Drawbacks with a ‘commercial considerations’ extension include:

  • Limits offered by insurers tend to be quite low (perhaps no more than £50,000 any one event, quite often substantially less).

  • There tends to be a relatively low annual aggregate limit, meaning a possible problem could arise if a client has already elected to take advantage of the commercial considerations extension on one or two previous occasions.

It’s important to keep in mind the existence of a ‘commercial considerations’ extension is disclosed to a customer, under the terms of the extension, cover will normally be considered void.

To find our more, talk to your usual Towergate adviser.