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Haulage and goods in transit
On domestic UK journeys a haulier's liability for goods is mainly set by contract, so conditions of carriage decide how much the haulier owes when a load is lost. It matters because goods in transit insurance usually follows that liability, and terms that were never incorporated may not protect you at all.
Part of: Haulage insurance
In short
CMR does not apply to purely domestic UK haulage, so a haulier's liability for goods depends on the contract and the general law of bailment. Trade conditions of carriage, such as the RHA's 2024 edition with its £1,300 per tonne limit, cap liability, set claim time limits and define the customer's duties. They work if they are incorporated before the contract is made and, against business customers, pass the reasonableness test in section 11 of the Unfair Contract Terms Act 1977. Goods in transit insurance commonly follows the contractual liability, so mismatched contracts create gaps.
The CMR Convention applies where goods are taken over and delivered in two different countries, so it does not govern a journey from Bristol to Leeds. On domestic work the haulier's liability for the goods comes mainly from the contract and the general law of bailment, and without effective terms it can extend to the full value of the load and the customer's other losses.
Bailment principles can bite hard. In Euro Cellular (Distribution) plc v Danzas Ltd [2003] EWHC 3161 (Comm), mobile phones disappeared from a warehouse used by a forwarding and carriage business. The court held that the burden of proving what happened to the goods lay on the defendants, found the goods were lost through negligent release, and held the defendants liable in full because that fell outside the 2 SDR per kilo limit in their terms. Clear, incorporated terms and good records are the haulier's main protection.
Trade conditions differ, but most published sets deal with the same issues:
The Road Haulage Association publishes a widely used set. Its RHA Conditions of Carriage (2024) set a limit of £1,300 per tonne on the gross weight of goods lost, wrongly delivered or damaged, unless the customer agrees otherwise, and the RHA states that use is restricted to its members. A Hill Dickinson summary of the 2024 edition notes changes on loading indemnities, customer information on weight and contents, access to welfare facilities, proof of delivery not being a reason to withhold charges, and stricter evidence for claim notifications. The 2020 edition discharged the carrier unless notice was given within seven days of the actual or intended end of transit.
Conditions of carriage are contractual terms. They must be effectively incorporated into the contract with the customer, by express agreement or by clear reference before the contract is made. Terms first produced after the job is agreed, for example on a delivery note, are unlikely to be incorporated.
Your goods in transit insurance may also require you to trade on specified conditions (see our goods in transit definition), so a failure to incorporate them can create a gap in cover as well as a larger liability.
A limitation clause in a business customer's contract can be challenged as unreasonable. Under section 11 of the Unfair Contract Terms Act 1977, the term must have been a fair and reasonable one to include, having regard to the circumstances known to, or in the contemplation of, the parties when the contract was made. Where a term restricts liability to a specified sum, the court has regard to the resources the party could expect to have available to meet the liability and how far it was open to it to cover itself by insurance. It is for the party relying on the term to show that it is reasonable.
Widely recognised trade terms, notified in advance and with an option to pay for higher liability, tend to be easier to defend than terms buried in small print. Household removals for consumers sit under different consumer rules; see removals insurance.
Large shippers, retailers and logistics businesses often insist on their own terms, which may impose full-value liability, indemnities and consequential loss. Your insurance does not automatically follow.
| Contract position | Your liability | What GIT commonly does |
|---|---|---|
| Your conditions incorporated, limit per tonne | Capped at the contract limit | Pays up to the contract limit, within the policy limit |
| No conditions incorporated | Potentially full value and other losses | May pay to the policy limit; some wordings restrict cover where specified terms were not used |
| Customer's terms with full value or consequential loss | Full value, possibly more | May not cover liability beyond standard terms unless agreed with the insurer |
| International movement | CMR, 8.33 SDR per kg of gross weight | Needs CMR cover in the policy |
For the international position see CMR Convention liability. Forwarders using their own trade terms face similar questions; see freight forwarder liability insurance.
Illustrative: a haulier loses a 20 tonne load of packaged food to a trailer theft. Under properly incorporated terms with a £1,300 per tonne limit, its liability is capped at £26,000. If it never incorporated terms, the customer can claim the full value of the goods, subject to the haulier's arguments on bailment and care. If it signed the customer's terms accepting full value and lost profit, its exposure is larger still, and its GIT policy may respond in part.
Theft claims also depend on policy security conditions; see load theft and cargo crime insurance and the transport cargo loss scenario.
Apex arranges haulage insurance and goods in transit cover for haulage businesses, and can check that a policy fits the terms you trade on. A broker reads each enquiry and comes back with options, with no fee for a quote, and cover is subject to the insurer's acceptance and the policy terms. To quote we need your business activities, turnover, location and claims history, plus a copy of your conditions of carriage, any customer contracts that override them and the goods and values you carry. Our transport and logistics guide covers wider risks.
Conditions of carriage are the contract terms a haulier trades on. They usually limit liability for lost or damaged goods, set notice and claim time limits, define the customer's duties on loading and information, and allow subcontracting. They protect the haulier when they are properly incorporated into the contract before the job is agreed.
The Road Haulage Association says the 2024 edition sets a limit of £1,300 per tonne on the gross weight of goods lost, wrongly delivered or damaged, unless the customer agrees otherwise. Use of the RHA conditions is restricted to RHA members, and they must be incorporated into the contract to apply.
Yes, by contract on domestic work, provided the terms are incorporated and, for business customers, pass the reasonableness test in section 11 of the Unfair Contract Terms Act 1977. On international journeys the CMR Convention sets the limit instead, and terms that reduce CMR liability are void.
Without incorporated terms, you may be liable for the full value of goods lost or damaged in your care, and possibly other losses, under the general law. Your goods in transit policy then pays up to its limit and may contain conditions about trading terms, so the uninsured share can be significant.
Tell us what your business does, your turnover and any claims. A broker reads every enquiry and comes back with options. No fee for a quote. Or call 0117 325 0027.
Start a commercial enquiry Request a callbackApex Insurance Brokers Limited is authorised and regulated by the Financial Conduct Authority. Registered in England and Wales, company number 07014570. This page is general information, not advice on your individual circumstances, and it does not guarantee that cover will be available or on what terms.
