Transit cover, public liability and the word 'insured'

A facilities manager once asked us, mid-quote, why our proposal had two separate sections about insurance when every other quote on her desk had a single line saying fully insured. It is a fair question, and the answer is the most useful thing we can tell a first-time commercial client.

There are two entirely different products in play on a relocation, they protect different people, and only one of them has anything to do with your furniture.

Public liability protects the building and third parties

Public liability responds when our work injures someone who is not our employee, or damages property that is not yours: the lift lining, the lobby floor, the glazing on the way out, the car in the dock. It is the policy your building manager cares about, and it is why they ask for a certificate of currency naming the building owner before they will release a dock booking.

It will not pay a cent toward your damaged monitor, because your monitor is not third party property. It is the goods being carried, which is a completely different exposure.

Transit cover protects the goods

Transit cover is what responds when the goods themselves are lost or damaged. It comes in tiers, and the tier decides whether you are actually protected or merely told you are.

• Carrier's liability. The default. Limited liability for proven negligence only, capped per consignment. Nothing is payable simply because something arrived broken; you have to establish negligence.
• Restricted transit cover. Named events only: fire, flood, collision, overturning, theft of the whole vehicle or loss of an entire sealed module. It will not respond to an individual item that got chipped.
• Full replacement value. Accidental loss and damage, item by item, without needing to prove a named event. This is what we recommend for anything with a real replacement cost.

The step between restricted and full is where most disappointment lives. Restricted cover sounds comprehensive until the first claim, when it turns out that one cracked screen in an otherwise uneventful transit is not a named event and never was.

PBO: the three letters that decide claims

PBO means packed by owner. If you pack a carton yourself and the contents break with no external damage to the carton, most policies will decline, on the reasoning that the packing is the likely cause. This is not a loophole invented to avoid paying. It is the entire basis of the distinction, and it is in the wording.

In an office context this matters because staff packing their own workpoints is both the cheapest approach and the one that produces the fewest missing items. We recommend it. But it means anything genuinely fragile or valuable, such as reception glass, awards, artwork and laboratory glassware, should be packed by our packers or declared and crated separately.

Excess structures, and why they vary

Excess is the part clients rarely ask about and always remember afterwards. As a sample structure, restricted transit cover typically carries a higher excess than full replacement value, because the insurer expects fewer, larger claims. Full replacement value usually carries a lower excess, and a declared high-value schedule can often be written with nil excess on the scheduled items.

If you have a handful of genuinely expensive items, declaring them individually is almost always cheaper than lifting the cover tier for the entire consignment. A 40 kilogram framed work and 40 kilograms of melamine desk weigh exactly the same, and a weight-based default treats them identically. That is a bad trade for you.

What is never covered

• Data. Physical media is covered; the information on it is not, and no removals policy reconstructs a database.
• Business interruption. Lost trading days are not part of a transit policy.
• Inherent vice. A pressed-board desk that cannot survive a second build was always going to fail, and insurers know it.
• Wear, rust, mould and gradual deterioration, including anything that happened during a long storage period.

What to do before the quote is signed

Three actions, and none takes long. Read the cover section of the proposal rather than the summary line. Declare high-value items individually with their values attached. And ask, explicitly, whether owner-packed cartons are covered on the tier you have selected, because the answer is usually no and it is much better to learn that in week one.

Excess figures, caps and bands anywhere on this demonstration site are illustrative samples. On a real engagement, the policy wording and the schedule attached to your quotation are the only documents that govern.