If a lorry is involved in an accident and its cargo is damaged, which insurance applies? Business Choice Direct uses a haulage example to explain where each type of cover comes in.
Written by Business Choice Direct — Published 12 November 2026
Moving goods for customers comes with a significant amount of responsibility. Whether it’s damaged freight, stolen items or a road traffic accident, incidents can quickly become costly if you’re not properly protected.
Two types of cover that are often confused are Goods in Transit insurance and Hire & Reward insurance. While both are connected to transporting goods, they are designed for different purposes.
Understanding the difference can help reduce the risk of unexpected gaps in cover. In this article, Business Choice Direct (BCD) explains what each type of cover does, how they differ, and why both can play an important role in protecting haulage businesses.
Hire & Reward insurance is designed for businesses that deliver or transport goods on behalf of customers.
To put it simply, you’re being hired to move goods for someone else and receiving a reward in the form of payment. That’s where the term “hire and reward” comes from.
For haulage operators, Hire & Reward is usually included as part of the vehicle’s motor insurance, with insurers showing it as a ‘use’ on the policy schedule or certificate. It’s important to check that your policy covers the work you’re doing, as ‘Business Use’ alone may not provide the correct cover.
One common misconception is that Hire & Reward insurance also covers the goods being transported. In most cases, it doesn’t. It relates to the use of the vehicle for carrying goods in return for payment, rather than providing cover for damage to the goods themselves
Goods in Transit insurance is designed to protect the goods you’re responsible for while they’re being transported.
For many haulage businesses, the value of a load can be significant. Even with experienced drivers, carefully planned routes and well-maintained vehicles, unexpected incidents can happen.
For example, a haulage operator transporting a customer’s stock may find part of a load damaged following a road traffic accident, or discover goods have been stolen during an overnight stop. In situations like these, Goods in Transit insurance helps cover the financial consequences of loss, theft or damage.
The easiest way to understand the difference is to focus on what each policy is designed to cover:
Imagine a haulage vehicle is involved in an accident while carrying a customer’s goods. Hire & Reward insurance relates to the vehicle being used for that work. If the load is damaged as a result of the incident, Goods in Transit insurance is designed to respond to that loss, depending on the terms of the policy.
The two types of cover address different risks, so they can work alongside each other rather than replacing one another.
Business Choice Direct has partnered with Haulage Exchange to provide insurance solutions for haulage operators, fleet owners and freight forwarders.
Through the partnership, members benefit from specialist insurance backed by industry expertise and access to the wider UK haulage insurance market. Whether you operate a single vehicle or manage a large fleet, BCD can help arrange cover that reflects the way your business operates.
If you’d like to review your existing cover or discuss your insurance requirements, the BCD team is on hand to help. Call 02393 810 051 or visit their website today.
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Business Choice Direct (BCD) is an independent, UK-based commercial insurance broker specialising in courier insurance, van, minibus, fleet and haulage insurance as well as Goods in Transit and Hire & Reward insurance. BCD is a trusted partner of Courier Exchange, Community Transport Association and Haulage Exchange. Business Choice Direct is part of the Lloyd & Whyte Group which is part of Benefact Group, a charity-owned financial services group that gives all available profits to good causes.
