Freight insurance protects your goods while in transit. This guide explains how carrier liability works in Australia, what goods in transit insurance covers and why relying on standard freight terms can expose your business to risk.
Home Freight Blog Freight Insurance Explained: What It Covers and Why It Matters
Freight insurance, often referred to as goods in transit (GIT) insurance, protects your goods against loss or damage while being transported.
It applies whether freight moves locally, interstate or nationally via road, rail, air or sea — and whether the carrier is a major line-haul provider or a small local courier.
Without insurance, the sender typically bears the financial risk if goods are lost, stolen or damaged in transit — regardless of whose vehicle or equipment caused the loss.
Many businesses assume that freight carriers automatically cover goods for their full value. This is rarely the case.
Under Australian transport law and standard carrier terms, liability is strictly limited and typically calculated per kilogram — not by invoice value. Most major domestic carriers set limits of between $0.60/kg and $2/kg, subject to their terms of carriage.
A 500 kg pallet of $50,000 electronics damaged in transit may attract a maximum carrier-liability payout of $1,000 — leaving the sender to absorb $49,000 of unrecovered loss.
Freight insurance policies generally cover physical loss or damage to goods while in transit, from pickup through to delivery.
Coverage can vary significantly by insurer, policy type and the commodity being shipped. Marine insurance typically covers overseas freight and some domestic sea legs; standard GIT covers the domestic road, rail and air legs.
Freight insurance policies typically exclude certain scenarios unless specifically declared and rated separately.
Insurance arrangements vary based on shipping frequency, cargo value and risk profile. The right structure depends on whether you send freight occasionally or daily.
Premiums are usually calculated as a percentage of declared goods value, modified by commodity type, transit distance, mode and claims history.
Typical premium ranges for domestic Australian freight.
For businesses shipping pallets, cartons or bulky freight, the financial exposure can be significant.
If a high-value consignment is damaged and only carrier liability applies, compensation may fall well short of replacement cost — putting stress on cash flow, customer relationships and supply continuity.
Making a successful claim depends on having the right documentation ready at the time of loss or damage. Most insurers require claims within a strict window (often 7–14 days of delivery).
Freight insurance is particularly important when shipping high-value, fragile or time-critical goods — or when a single consignment represents a meaningful share of monthly revenue.
Long-haul freight increases exposure due to extended handling, multiple depot transfers and higher transit distance.
A Melbourne–Perth consignment typically passes through 3–5 separate handling events (pickup, origin depot, linehaul, destination depot, delivery) versus 2 for a metro run. Every additional touch-point raises the probability of damage, mis-routing or loss.
QFM works with multiple carrier networks across Australia. While we coordinate transport and help manage risk exposure, freight insurance remains the responsibility of the shipper unless otherwise arranged.
We encourage customers to assess goods value and determine whether transit insurance is appropriate for their shipment profile — and can connect you with insurance brokers specialising in freight when it makes commercial sense.
If your business regularly ships palletised, bulky or high-value freight, speak with QFM about best-practice freight risk management across your supply chain.