Marine Cargo Insurance. Insurance Issued to Common Carriers.

    Such insurance has assumed importance only in recent years and has its basis in the fact that common carriers by water have had their common law liability greatly reduced by legislation. Thus the Harter Act provides "that if the owner of any vessel transporting merchandise or property to or from any port in the United States of America shall exercise due diligence to make the said vessel in all respects seaworthy and properly manned, equipped, and supplied, neither the vessel or owners, agent, or charterers shall become or be held responsible for damage or loss resulting from faults or errors in navigation or in the management of said vessel, etc."

    As a means of attracting business many carriers either take cargo on the basis of freight rates which include insurance, or give the shipper the benefit of their facilities to negotiate insurance for the protection of cargo entrusted to them. The contract may take either the blanket or floating form, i. e., the carrier may either agree to pay a definite annual premium, or to report its risks coming under the policy from time to time. Often these policies are for such large amounts that the risk is distributed among several underwriters on some share or participation basis.

     The insurance is usually for the account of the transportation company "as carriers, forwarders, bailees, custodian or otherwise, as well as for the account of the owners of the property transported," and the carrier is " recognized as the agent and trustee for and in behalf of the owners of said property for all purposes of this insurance, with authority to bring suit in their own name to recover loss or damage thereto, and without any right on the part of the insured to set up any exemption of carrier from liability by reason of anything contained in their bills of lading or contracts of affreightment or otherwise." The coverage is also very broad as a rule, the insurance applying " per steamers of the carriers or other steamers run or employed by them, including risk on wharves, and lighterage at ports of loading and discharge, whether by assured's own or by lighterage employed by them," and covering all kinds of merchandise and property " against loss, damage, and detriment arising from, caused by or growing out of any and all the risks of fire, ocean and / or inland navigation and transportation ; fully to indemnify for all loss and damage, general average and salvage costs, charges and expenses to said property, without regard to the usage, rules and customs of marine underwriters, anything to the contrary notwithstanding." In arriving at the premium it is customary to classify freight and, as regards each class, to assign a value per ton of weight.