Reducing the risk from damaged goods

Firms should check they are properly covered against risks to items en route to customers

Many sellers take a great deal of care with their sales process, and the legal conditions that apply.

However, when selling goods remotely it’s important not to take for granted the most important part of the process, to ensure that the goods reach the customer in the expected condition.

When selling to consumers, it would be customary for the seller to be responsible for arranging delivery of the goods, and to take the risk of any issues arising during transport.

It is important to check that, in arranging such transport, you are properly protected against the risks to the goods.

This is even more important where a seller supplies particularly high value goods, as the default position which applies is more consistent with large, lower-value goods.

As Graeme Christie of insurance brokers Clark Thomson explains: “When using carriers always keep in mind that their conditions of carriage protect the carrier’s liability and not the goods themselves.”

Default Position

The contract with your carrier or courier will be based upon the standard conditions issued by the Road Haulage Association.

These place responsibility for “physical loss, mis-delivery of or damage to” the goods which they are carrying.

However, there are two potential issues with the standard position:

• The value of the goods – the standard conditions apply a limit of £1,300 per tonne on the amount of compensation you can receive on damage or loss of the goods. This is obviously unsuitable if you are transporting small, high-value goods.

The exclusions from cover –

you will be covered for damage and loss, but not if this results from latent or inherent defect in the goods, or from improper packaging. This means that the carrier will have to investigate the reason for the loss or damage, and may refuse to reimburse if it believes that the cause could be due to defect in the product or in the packaging.

Possible Protections It is possible to arrange with

the carrier to arrange, presumably at additional cost, an increase in the level of cover from the standard of £1,300 per tonne. Such cover will remain subject to the standard exclusions however.

Rather than rely upon the carriers

cover, it is possible to arrange your own “goods-in-transit” insurance policy.

This may be an advantage where you also transport goods using your own transport, or the value of the goods you are transporting through carriers is extremely variable.

In such a situation, you would engage with your own insurers as regards any claim rather than the carrier.

When selling goods remotely it is important to ensure goods reach the customer in the expected condition CHRIS ALLAN

Precautionary measures can ensure that sending a packet doesn’t end up costing a packet for the business concerned