Marine Insurance provides financial protection for goods in transit across different modes such as road, rail, air and sea. It plays a crucial role in mitigating risks for businesses and individuals involved in shipping goods.
Among different types of marine insurance policies, a Single Transit Insurance Policy offers coverage for one specific shipment. This blog explores who is covered under a single transit policy, who should purchase it and what situations are typically included in India. Stay tuned!!
Understanding Single Transit Insurance
A Single Transit Insurance Policy is designed to cover a specific shipment or consignment during a single journey. Unlike annual Marine Insurance policies, which cover multiple shipments over a year, single transit insurance is event-specific. It is ideal for:
✅ Small and medium businesses that do not frequently ship goods.
✅ Individual consignors or consignees undertaking one-time shipments.
✅ Companies transporting special consignments or high-value cargo.
Who Is Covered Under a Single Transit Insurance Policy?
A single transit insurance policy primarily covers the owners of the goods in transit. Here’s a breakdown of the key entities typically covered:
1. The Consignor (Shipper)
The consignor is the party sending the goods and is often the policyholder. The insurance policy provides coverage against risks such as damage, loss or theft of goods during transit. Whether it’s a manufacturer shipping raw materials or a seller dispatching finished products, a single transit policy ensures financial protection.
2. The Consignee (Receiver of Goods)
The consignee is the recipient of the goods. Depending on the terms of sale (Incoterms) or contract between the consignor and consignee, the latter may also be a beneficiary of the insurance policy. For example:
- Under Cost, Insurance and Freight (CIF) contracts, the consignor insures the goods until they reach the consignee.
- Under Free on Board (FOB) terms, the buyer arranges the insurance.
3. Freight Forwarders and Logistics Providers (Not Typically Covered)
Freight forwarders or logistics providers handle the physical transportation of goods, but they are not automatically covered under a single transit policy unless specifically named.
- Their liability is generally covered under a separate carrier’s liability insurance policy.
4. Third Parties (If Specified in the Policy)
In certain cases, third parties such as subcontracted carriers or intermediaries involved in the shipment may be included, but this depends on policy terms and contractual agreements.
What Does a Single Transit Policy Cover?
A Single Transit Insurance Policy typically covers:
✔️ Accidental Damage – Loss due to collision, overturning of vehicles or derailments.
✔️ Theft and Pilferage – Only covered if specifically included in the policy.
✔️ Natural Calamities – Damage due to floods, earthquakes, storms or lightning.
✔️ Fire and Explosion – Covers losses from fire or explosions during transit.
✔️ Transit-Specific Risks – Such as jettisoning of goods from a ship or derailment of a train.
✔️ Loading and Unloading Risks – Covers damages during loading or unloading.
✔️ Strikes, Riots and Civil Commotion (SRCC) – Optional coverage for damages from riots or civil disturbances.
The coverage is based on Institute Cargo Clauses (A, B or C), which specify the risks and exclusions.
Who Needs a Single Transit Policy?
A single transit policy is beneficial for:
- Exporters and Importers – Ensuring protection for international shipments.
- Domestic Traders – Covering goods transported within India via road, rail, air or waterways.
- Occasional Shippers – Small businesses or individuals needing one-time shipment coverage.
- E-commerce Sellers – Online sellers shipping valuable products.
- Personal Goods Shippers – Individuals moving personal belongings.
Exclusions in Single Transit Insurance
A Single Transit Insurance Policy does not cover:
- Wilful Misconduct – Loss caused intentionally by the insured.
- Improper Packaging – Damage due to inadequate or poor packaging.
- Delay in Transit – Losses arising from delayed delivery.
- Inherent Vice – Natural deterioration of goods.
- War and Nuclear Risks – Excluded unless covered under an add-on.
Why Is Single Transit Marine Insurance Important for Your Business?
A single transit policy offers several advantages, making it an essential tool for risk management in logistics:
✔️ Financial Protection – Provides compensation for accidental damage, natural disasters or theft.
✔️ Peace of Mind – Ensures worry-free shipments.
✔️ Business Continuity – Helps businesses recover financially from losses, minimising disruptions.
✔️ Enhanced Customer Confidence – Shows customers that goods are insured during transit.
✔️ Competitive Advantage – Offering insured delivery services can give you an edge over competitors.
✔️ Legal Compliance – In some cases, marine insurance may be a contractual requirement.
By understanding the importance of Single Transit Insurance, businesses can mitigate risks, protect their investments and ensure smooth transit of goods.
Final Thoughts
A Single Transit Insurance Policy is an essential tool for businesses and individuals shipping goods occasionally. By understanding who is covered, what is included and what exclusions apply, stakeholders can make informed decisions and reduce financial risks.
Looking for a single transit policy? Choose a trusted insurer today to secure your shipment!
