Inland Transit Clauses

Inland transit is a branch of marine insurance which covers those goods and commodities that are being transported from one point to another by road or rail.

Any damage or loss caused to the goods during transportation is the responsibility of the shipper. To help transporters and courier companies recover the losses incurred, inland transit provides compensation to them. In short, inland transit serves as a financial support system in case the goods get damaged during transit, loading, and unloading.

An inland transit insurance policy is suitable for shippers, transport and logistics companies, truck owners, etc. This type of marine insurance policy ensures the safety of goods and limits the financial liabilities of the insured to a great extent.

As with any other policy, there are some important clauses in inland transit insurance. But to understand all these clauses clearly, you should first know what the term “clause” means in marine insurance in India.

A clause is a condition present in an insurance policy which defines the liability of both the insurer and the insured.

The purpose of clauses is to protect the interest of the parties involved by outlining the specific requirements of each insurance policy clearly.

This helps avoid any kind of disagreement between the insurance company and the policyholder as when signing the insurance contract, the policyholder agrees to all the clauses customarily.

Since we are talking about inland transit insurance, let’s move to the most common clauses that this type of marine insurance contains.

There are innumerable risks associated with inland transit and an insurance policy does not cover all of them. For this reason, ITC A and ITC B covers in marine insurance are provided in every insurance contract. Below is a detailed discussion of both of these clauses.

Inland Transit Clause A or All Risk Policy

This clause states that the insurance contract will cover all the possible risks (except those risks which are excluded by the policy itself) that can lead to damage or loss of goods in transit.

Here it is important to note that the coverage provided is only available for the specified time frame listed in the insurance policy i.e., from the departure of goods to their delivery.

However, there could be some conditions that can limit the scope of your insurance, for this reason, it is suggested that you read your chosen policy carefully and talk to your insurer in case you want extended coverage in your policy.

Inland Transit Clause B or Basic Risk Cover

This clause defines that the inland transit insurance will protect the insured from financial losses incurred because of basic perils, such as:

• Fire

• Lightning

• Earthquake

• Collision, etc.

As compared to ITC A in marine insurance, this clause does not provide very wide coverage and only covers some of the risks that result in damage or loss of goods during transportation.

The two main inland transit clauses are ITC A and ITC B. Each of these clauses has its own inclusions and exclusions, but the basic difference between them is the level of coverage.

While clause A almost covers all the risks, clause B only focuses on some specific risks and provides medium-low financial coverage to the insured.

When buying a marine insurance policy, it is essential to read these clauses before signing to ensure that you are getting the coverage that is best suited to your business. We at Tata AIG offer transit insurance to help provide adequate financial coverage for your shipments.