Do Courier Companies Need Goods in Transit Insurance? UK Rules Explained

Yesterday we looked at whether courier companies need public liability insurance, cover that pays out if a driver injures someone or damages property that isn’t theirs. Today’s question is the one most courier clients actually think about first: goods in transit insurance, the policy that covers the parcel, pallet or package itself if it’s lost, stolen or damaged somewhere between collection and delivery. It’s arguably the most important cover a same day courier carries, and it’s also the one people most often assume is automatic when it isn’t.

What Is Goods in Transit Insurance, and How Is It Different From Liability Cover?

Goods in transit (GIT) insurance covers the value of whatever is being carried if it’s lost, stolen or damaged while on board the vehicle. That’s a different job entirely to the liability covers we’ve written about this week. Employers’ liability insurance covers a courier’s own staff if they’re injured at work. Public liability insurance covers a claim from a client or member of the public if the business injures them or damages something that belongs to them. Goods in transit sits apart from both, because it isn’t about who gets hurt or whose property gets damaged in an accident. It’s about whether the actual consignment, the thing the client is paying to have moved, is protected if something goes wrong with it directly. HM Revenue and Customs lists goods in transit as one of the 18 recognised classes of general insurance business, alongside categories like motor vehicle liability and fire, which gives some sense of how established and specific this type of cover is within UK insurance regulation.

Is Goods in Transit Insurance a Legal Requirement for Courier Companies?

No. As with public liability, there’s no UK law that forces a courier business to hold goods in transit cover. The only insurance the law actually requires is motor insurance for the vehicle itself and, once a business takes on employees, employers’ liability insurance under the Employers’ Liability (Compulsory Insurance) Act 1969. Goods in transit insurance is a commercial decision, not a statutory one, and a courier could in theory operate without it. In practice almost none do, because the alternative isn’t “nothing happens if a parcel goes missing”, it’s that the courier is personally on the hook for the value of the goods with no policy behind them.

What’s the Legal Position If There’s No Goods in Transit Policy?

This is where goods in transit insurance differs from public liability in a way that catches people out. Without public liability cover, a courier is simply exposed to the full, uncapped cost of a claim. Without goods in transit cover, a courier is usually still contractually liable for lost or damaged goods, but that liability is very often capped, and capped well below what the goods are actually worth, by whatever standard trading terms or conditions of carriage apply to the job. Cross-border road consignments carried under the Convention on the Contract for the International Carriage of Goods by Road, given force in UK law by the Carriage of Goods by Road Act 1965, are a clear example set out in legislation: compensation for a lost or damaged consignment is capped at 8.33 Special Drawing Rights per kilogram of gross weight, a figure fixed in the Act itself rather than based on the item’s actual value. Purely domestic UK jobs aren’t governed by that Convention, but many operators still carry, or their subcontractors still carry, standard trading conditions that cap liability per tonne or per consignment in a broadly similar way. A client whose £3,000 consignment weighs 20 kilograms is not going to be made whole by a liability cap calculated on weight rather than value, which is exactly the gap goods in transit insurance is bought to close.

Why Courier Clients and Booking Platforms Ask for It Anyway

Because the default legal position leaves such a wide gap between what’s owed and what’s lost, clients rarely leave goods in transit cover to chance. Businesses sending anything of real value, from fragile and high-value goods to pallets bound for a production line, will typically ask what level of goods in transit cover a courier holds before the job is even booked, and larger logistics firms and courier booking platforms commonly build a minimum GIT limit into their own subcontractor terms. Healthcare and pharmaceutical clients and legal document senders ask the same question for a different reason: the item can’t simply be reordered or reprinted, so the client wants confirmation that its full value, not a capped weight-based figure, is actually covered.

How Much Goods in Transit Cover Do Same Day Couriers Typically Carry?

There’s no statutory minimum, so the figure is set by the value of what’s typically being carried rather than by law. Small van and courier operators handling documents, parts and general parcels commonly carry cover somewhere in the £10,000 to £25,000 per-vehicle range as a baseline. Operators regularly moving higher-value car parts, pallets or fragile and high-value items tend to carry considerably more, often £50,000 upwards, and will increase cover further for a specific job if a client declares a higher value in advance. Declaring the true value of a consignment before collection matters here in a way it doesn’t for liability insurance, because under-declaring what’s on board is one of the most common reasons a goods in transit claim gets reduced rather than paid in full.

What Happens If Goods Are Lost or Damaged Without Cover?

There’s no regulator issuing fines here, because as with public liability, no law is being broken by trading without a policy. The exposure is entirely financial, and it lands on the courier rather than an insurer. Where standard trading conditions or the Carriage of Goods by Road Act apply, the courier’s liability may be technically capped, but that cap rarely covers what the client actually paid for the goods, and the courier is still expected to make up the difference commercially to keep the relationship and the work. Where no such conditions have been agreed at all, a courier can find themselves liable for the full replacement value of the consignment with nothing to fall back on. Either way, a courier who can’t confirm their goods in transit limit when a client asks tends to lose the booking before any parcel is ever damaged, which makes this, like public liability, as much a condition of winning work as a safety net for when things go wrong.

A Quick Recap: Goods in Transit vs the Other Insurance Types

Employers’ liability protects a courier’s own staff and is compulsory by law from the moment anyone is employed. Public liability protects clients and members of the public and isn’t compulsory, but is routinely demanded by sites and contracts. Goods in transit protects the actual consignment being carried, isn’t compulsory either, and is routinely demanded by clients for exactly the same reason: because the default legal position, whether that’s a weight-based cap under the Carriage of Goods by Road Act or a courier’s own standard trading terms, rarely matches what the goods are actually worth. A serious same day courier operation ends up holding all three, not because a single piece of legislation requires it, but because between compulsory employment law and the practical expectations of paying clients, there’s very little room left to operate without them.

Every job we run carries goods in transit cover set at a level that matches what’s actually on board, not a weight-based minimum, so you’re covered for what the consignment is worth rather than what a standard trading condition says it’s worth. Call our controllers on 020 4525 2039 or get a fixed quote online.

Frequently Asked Questions

Do courier companies need goods in transit insurance by law?

No. There’s no UK law requiring a courier business to hold goods in transit insurance. The only compulsory cover is motor insurance for the vehicle and, once a business has employees, employers’ liability insurance. Goods in transit cover is a commercial decision.

What happens to a lost parcel if a courier has no goods in transit insurance?

The courier is usually still liable under whatever trading conditions apply, but that liability is often capped by weight rather than value, for example 8.33 Special Drawing Rights per kilogram under the Carriage of Goods by Road Act 1965 for international consignments. Without a policy, the courier covers any shortfall between that cap and the goods’ real value themselves.

How much goods in transit cover do same day couriers usually carry?

There’s no fixed legal minimum. Operators carrying documents and general parcels often hold cover from around £10,000 to £25,000 per vehicle, while those regularly moving pallets, car parts or high-value goods commonly carry £50,000 or more, adjusted upward for specific high-value jobs.

What’s the difference between goods in transit insurance and public liability insurance?

Goods in transit insurance covers the value of the consignment itself if it’s lost, stolen or damaged. Public liability insurance covers a completely separate risk: claims from clients or members of the public if the courier’s business injures them or damages property that isn’t part of the delivery.

Why do clients ask to see proof of goods in transit cover before booking?

Because the legal default, whether that’s a weight-based liability cap or a courier’s own trading terms, usually falls well short of the goods’ real value. Clients sending high-value, fragile or irreplaceable items ask for proof of adequate cover so they know the full value is protected, not just a capped fallback amount.

Official guidance

The rules described above come from the official sources below. Regulations change, so check the current position before you rely on them.

• GOV.UK — Vehicle insurance