Cargo insurance policies typically contain an exclusion called “inherent vice”, which covers defects or characteristics inherent in the nature of the product. Unlike damage caused by external events such as physical impact, it cannot be insured because the carrier or insurer cannot visibly identify the defect or characteristic. To determine whether a product has inherent vice, consider examples such as sealed plastic bottles that are susceptible to pressure changes during transport, or leather goods that corrode when in contact with metal due to acidic chemicals. Rusting of iron or metal machinery is another example. It is the shipper’s responsibility to be aware of their product and to ensure that it is properly packaged for the mode of transport and potential conditions along the journey. Claims may be denied due to inherent vice or inadequate packaging as these are common exclusions in cargo insurance policies.

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