‘Full responsibility’ transit insurance

This article explains the difference between "all risks" goods in transit cover and "Full responsibility" transit insurance. An important read for any haulier but especially those that regularly carry high value loads.

Full responsibility cover is a term that's often used these days to describe 'All Risks' goods in transit cover. It's important to be aware that full responsibility cover is not the same as transit cover on a liability basis, the difference being that if goods are damaged, there is cover whether or not the haulier has been negligent.

Full responsibility cover does not require the haulier to have contractual conditions of carriage in place. That said, hauliers buying cover on this basis should still have some sort of contract, if only to stipulate the maximum value of any one consignment and to contract out of liability for consequential losses.

Firms that want full responsibility cover need to make sure the load limit is adequate to cater for the highest possible value of any one consignment; otherwise there is a risk of 'average' applying. This means, for example, that if a load limit under a full-responsibility policy is only 1/10th of what it should be, then only 1/10th of any loss will be paid.

Whilst full responsibility cover may be better suited to transit risks where the value of any given consignment is known to be quite low, demand from hauliers for full responsibility cover with relatively high limits can result from companies such as certain supermarkets demanding that their hauliers arrange cover on this basis.

Firms running larger vehicles, tractor units, trailers and the like may be better off carrying under RHA Conditions as they could potentially be carrying loads worth several hundred thousand pounds. Then if they are required under a particular contract to insure a consignment for its full value, they should seek to agree with their customer to continue using RHA Conditions but with the standard £1,300 per tonne liability limit increased to a level sufficient to cover the full value of the load, and to insure accordingly.

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