Inland Transit Clause explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
Inland Transit Clauses are the Indian market wordings that insure goods moving domestically by road or rail. ITC-A is the wider cover, responding to loss from any external cause subject to exclusions; ITC-B is a named-perils cover limited to events such as fire, lightning, derailment, overturning and collision.
Where Inland Transit Clauses Fit
An export consignment makes at least three journeys. It travels from the factory to the gateway port, it crosses the ocean or flies, and it moves from the destination port to the buyer's warehouse. Institute Cargo Clauses govern the international leg. Inland Transit Clauses (ITC) — sometimes written as Inland Transit (Rail/Road) Clauses — govern the Indian domestic legs.
A properly written export cargo policy runs warehouse to warehouse and picks up all three legs under one contract. The problem arises when cover is arranged only for the sea leg, or where a domestic despatch is made without any transit cover at all because "the transporter is responsible". The transporter's liability is limited, contested, and slow to realise.
ITC-A — Wider Cover
ITC-A responds to loss of or damage to the insured goods caused by any external cause, subject to the policy exclusions. Because it is not a closed list, it is the wording under which the ordinary Indian road-transit losses actually get paid:
- Theft and pilferage from the vehicle
- Non-delivery of a package
- Damage from rough handling at transhipment points
- Rain and fresh-water damage in transit
- Breakage and denting
- All the ITC-B perils as well
For manufactured goods, packaged food, pharmaceuticals, garments and engineering items moving by road in India, ITC-A is the sensible default.
ITC-B — Named Perils
ITC-B pays only where the loss is proximately caused by one of the listed events:
- Fire or lightning
- Breakage of bridges
- Collision with or by the carrying vehicle
- Overturning of the carrying vehicle
- Derailment or accident of like nature to the railway wagon
Everything else is outside cover. A container that arrives with a slit tarpaulin and missing cartons produces no claim under ITC-B.
Side-by-Side
| Loss event | ITC-A | ITC-B |
|---|---|---|
| Fire, lightning | Covered | Covered |
| Collision, overturning of vehicle | Covered | Covered |
| Derailment, breakage of bridge | Covered | Covered |
| Theft and pilferage | Covered | Not covered |
| Non-delivery of package | Covered | Not covered |
| Rain / fresh water damage | Covered | Not covered |
| Breakage, denting in handling | Covered | Not covered |
| Malicious damage | Covered | Not covered |
Exclusions That Apply Either Way
Neither wording covers wilful misconduct of the insured, ordinary leakage or wear and tear, inherent vice, insufficient or unsuitable packing, loss arising from delay, or war and strikes risks unless separately added. Improper loading or stowage by the insured's own staff also falls outside cover — securing the load is a shipper responsibility, not an insured peril.
How the Inland Leg Gets Left Uninsured
Three recurring patterns, all avoidable:
- Port-to-port marine cover. The policy attaches on loading and terminates on discharge, leaving the two road legs bare. Fix it by specifying warehouse-to-warehouse cover.
- Incoterm misread. Under FOB, the seller carries risk right up to loading on board — which includes the entire inland journey and the port stay. Sellers frequently believe their risk ended at the factory gate.
- Reliance on the transporter. Carrier liability is capped and procedurally demanding. Even a successful claim rarely restores full value, and it takes far longer than an insurance settlement.
Claims — What to Do on the Inland Leg
- Note the damage on the delivery document at the time of taking delivery. A clean receipt undermines a later claim.
- Notify the insurer immediately and let them appoint a surveyor before goods are moved or repacked.
- Lodge a monetary claim on the carrier in writing within the time limit in the consignment note, to preserve subrogation rights.
- Keep the evidence — consignment note or lorry receipt, invoice, packing list, photographs, seal records and the surveyor's report.
- Where an FIR is warranted, for theft or hijack, file it promptly; insurers will ask for it.
Practical Tips
- Ask your insurer explicitly whether your export policy is warehouse to warehouse, and get it in the wording, not in an email.
- Insure the inland leg at the same CIF-plus-10% basis as the main leg — a partial loss at the port is measured against the same value.
- For high-value road movements, specify GPS-tracked vehicles and sealed containers; insurers rate on it and it materially reduces pilferage.
- Photograph the load and the seal at despatch. It costs nothing and settles most disputes about when the damage occurred.
- For multimodal exports, confirm there is no gap where the ITC cover ends and the ICC cover begins — the transition point is where cover is most often lost.