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Inherent Vice


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What is "Inherent Vice" in Cargo Insurance?

In cargo insurance, "inherent vice" refers to a defect or inherent property of a product that is considered in coverage plans.

How Does Inherent Vice Differ from External Events?

While external events like forklift damage can be insured, inherent vice involves flaws inherent to the product's nature and cannot be covered.

Examples of Inherent Vice Instances:

Short-Lived Nature:

  • Sealed plastic bottles may break during air or land shipping due to pressure changes.
  • Understanding this helps explain distortions in water bottles during air travel.

Nature of Structure:

  • Poorly designed objects may have structural issues; for instance, leather corroding when in contact with metal.
  • Structural problems arise due to intrinsic qualities of the product's material.

Function or History:

  • Metals like iron rust when exposed to dampness.
  • Understanding the product's history is crucial, as rust claims on improperly safeguarded metal gear may be rejected.

Key Considerations for Shippers:

  • Shippers need awareness of the goods being shipped.
  • Proper packaging is essential, considering transportation modes and environmental conditions.

Coverage Restrictions and Claim Rejections:

Claims may be rejected due to inherent vice or inadequate packaging, common coverage restrictions in cargo insurance.

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