An exporter or importer of goods is wise to insure goods while they are in transit. Insurance can be taken out for any loss or damage to cargo during transit by air, sea or land. Insurance law and practice relating to transport by sea differ in a number of ways from that concerned with air and land transport; these differences are explored in this chapter.

A brief history of insurance is also given, along with an outline of the essential concepts of insurance law, which will help to make sense of what may at first appear to be some peculiarities that relate to insurance contracts and insurance industry practices. Standard insurance clauses will be examined, particularly those offered by the Institute Cargo Clauses and the UNCTAD model clauses on marine hull and cargo insurance.

In this chapter the reader should gain an appreciation of:

• the essentials of a cargo insurance contract and the relevant law;

• the standard ICC and UNCTAD insurance contract terms; and

• insurance claims.

A BRIEF HISTORY OF CARGO INSURANCE LAW

Insurance policies for marine cargo have been available since medieval times when sole operators in Lombardy in northern Italy offered them. Marine insurance continued its development during the medieval period in Italian cities such as Genoa, Venice and Florence. The term ‘policy’ in the insurance sense derives from the Italian word polizza, which means promise or undertaking. The industry gained more economies of scale in late seventeenth-century Italy with the establishment of insurance companies.