Trade · 6 pages · 12 min
How insurance differs from a guarantee
Cargo insurance pays for covered losses after the fact, while a guarantee is a promise about the goods.
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From the opening
Cargo insurance is a contract that indemnifies the assured for a loss caused by an insured peril, subject to the policy wording, the value declared, and proof of the claim. A guarantee or warranty is a promise by the seller or maker that the goods themselves meet a stated condition. The opening covers insurance pays after a covered loss, a warranty speaks to the goods, and the wording decides the claim.
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Inside
- Insurance pays after a covered loss
- A warranty speaks to the goods
- The wording decides the claim
- Transit damage is not a defect
- Where the idea stops applying
- A distinction worth keeping
Sources
- Marine cargo insurance indemnity
- Seller warranty on goods sold