Insurance of Risk in Merchandise Transport

Due to variety of means of transport, it is challenging to set uniform rules for merchandise transport insurance contracts, which are also referred to as cargo, transport or freight insurance policies. Notwithstanding with the foregoing, regardless of the mode of transport chosen, obligation for an insurance company to compensate damages resulting from realization of risks covered by merchandise transport insurance policy requires existence of the same elements. Accordingly, determination of an insurance company's obligation to compensate damages depends on the existence of a valid (binding) insurance contract, existence of insured risk during the term of this contract, and occurrence of damage from a risk covered by such insurance policy. In merchandise transport insurance policies, to determine as to whether damages actually result from risks that are covered under such insurance policy, the causality between the insured risk and damage must be ascertained. This causality is identified and crystallized by enforcing rules of construction (interpretation) against the policy.