Marine Cargo Insurance is the insurance of property as it moves from place to place. The word ‘marine’ conjures up the sea and foremost in the minds of the writers of the Marine Insurance Act 1906 (MIA) was indeed sea transits. While the Act in its opening sections refers to ‘marine losses’ and to the ‘marine adventure’ and to ‘maritime perils’, marine insurance departments insure property conveyed by aircraft and road and rail vehicles as well. Many transits, particularly international ones require two or more types of transport and the Act makes provision for them
So, marine cargo insurance is a class of property insurance that insures property while in transit against loss or damage arising from perils associated with the navigation of the sea or air and subsequent land and inland waterways. The Act does not specifically mention air travel nor pure land-based transits. Therefore to ensure the Act applies to all modes of transit it is usual to see a clause in the policy document confirming its authority in all circumstances.
‘Maritime perils’ means perils consequent on or incidental to the carriage of property by the sea. It includes perils of the sea (sinking, stranding, collision, etc), fire, war perils, pirates, thieves, capture, jettison, and washing overboard and ‘…any other perils either of a like-kind or which may be designated by the policy.’
The inclusion of this last sentence allows insurers to include at their discretion in their policies other risks, for example, risks appropriate to other means of transport, like crashing, derailment and overturning. It should however be mentioned that the normal action of wind and wave is not considered a peril of the sea.
So what precisely is the ‘property’ that is the subject of marine cargo insurance? The Act refers to it as the subject-matter insured. In essence, it can be anything that is in the process of being conveyed from one place to another. Most usually it is raw materials and components coming into the assured or finished products going out.
The genre for this type of property is ‘Goods and or Merchandise’ that indicates traded goods. Also, items of the assured’s own equipment can be insured, for example, machinery, office furniture, samples and engineers tools, and exhibition materials. Indeed just about everything has moved and as a result, can be insured as the subject matter insured under a marine cargo policy.
