Inherent Defects (Inherent Vice)
Overview
Inherent Vice refers to the nature, condition, composition, structure, or tendency to deteriorate inherent in the cargo itself, causing damage or alteration without any external accidental cause.
Issues such as cargo decay, spontaneous heating, spontaneous combustion, rust, mold, discoloration, leakage, separation of components, crystallization, and quality deterioration may arise.
In cargo insurance and carrier liability, damage caused by inherent vice is often excluded from coverage.
Even if the cargo is damaged, if the cause is judged to stem from the cargo's own nature rather than an external accident, claims for insurance benefits or damage compensation from the carrier may be difficult to succeed.
In actual logistics practice, an important task is to distinguish whether the damage is truly due to inherent vice or caused by external factors such as seawater exposure, rain wetting, container sweat, temperature control errors, poor packing, or cargo handling accidents.
Inherent vice often becomes an issue when insurers or carriers assert exemption from liability.
Scope covered in this article
This article explains the meaning of inherent vice in cargo insurance and carrier liability, the reasons it tends to be excluded from coverage, distinguishing it from external accidents, and the documentation required in practice.
Specifically, the following topics are addressed:
- What inherent vice is
- Reasons why it tends to be excluded in cargo insurance
- Relation to the UK Marine Insurance Act 1906 and proximate cause assessment
- Division of roles among poor packing, container sweat, water damage, and carrier liability
- Classification by types of damage such as rust, decay, alteration, leakage, and mold
- How to respond when inherent vice exclusion is asserted
- Organizing documentation to counter inherent vice claims
- Practical points that freight forwarders and NVOCCs should confirm
- Common problematic cases in practice
The core focus of this article is not to leave inherent vice as a vague explanation like "the cargo was weak," but to clearly separate external accidents, poor packing, transport environment, and the cargo's inherent characteristics based on documentation.
Distinction from related issues
Inherent vice is often confused with poor packing, container sweat, water damage, and carrier liability issues.
| Issue | Main Concern | Relation to Inherent Vice |
|---|---|---|
| Inherent Vice | Whether damage or alteration occurs naturally due to the cargo's own nature or condition | Exemption issue when damage occurs without an external accident |
| Poor Packing | Whether packing was sufficient to withstand normal transport | Whether appropriate measures for waterproofing, moisture-proofing, rust prevention, and temperature control were implemented considering the cargo's nature |
| Container Sweat | Whether cargo was wetted by condensation inside the container | May connect to inherent vice or poor packing as an effect of cargo, packing, or transport environment rather than external water intrusion |
| Water Damage | Whether external water such as seawater, rainwater, or freshwater intruded | If external water intrusion can be proven, treatment may differ from simple inherent vice |
| Carrier Liability | Whether an accident occurred under the carrier’s control | If damage is due to the cargo’s inherent nature, the carrier may claim exemption |
| Temperature Control Errors | Whether temperature settings, freeze/refrigeration management, or temperature deviations were properly controlled | Even if cargo is prone to deterioration, abnormal temperature deviations may be treated as an external cause |
Whether an issue is inherent vice is judged comprehensively based on the cargo nature, packing, transport environment, condition when damage was discovered, and presence or absence of external accidents.
What inherent vice is
Inherent vice refers to damage caused by a quality or condition within the cargo itself, rather than an external accident affecting the cargo.
Examples include perishable foods that deteriorate over time, metals prone to rust due to moisture, chemicals sensitive to temperature changes, and cargos that have a risk of spontaneous heating.
This concept cannot be judged solely based on the fact that "the cargo is damaged."
Even with rust, treatment differs if it was caused by seawater intrusion, if the cargo was already prone to rust before transport, or if it resulted from moisture or temperature differences inside the packing. These differences affect liability and insurance handling.
Inherent vice is not sufficiently explained by vague statements like "the cargo was weak."
It is necessary to comprehensively examine the cargo’s nature, pre-shipment condition, packing, transport environment, and damage discovery circumstances to confirm whether the damage occurred naturally without external accidents.
Reasons why it tends to be excluded in cargo insurance
Marine cargo insurance primarily covers loss or damage of cargo caused by accidental external events during transport.
Damage that naturally occurs due to the cargo’s own nature is different from accidental external causes and is therefore often excluded from coverage.
Even under the Institute Cargo Clauses (ICC), damage arising from the cargo’s inherent vice or nature is treated as an exclusion.
This is because insurance does not guarantee the quality or durability of the cargo itself.
If insurance covered deterioration tendencies or susceptibility to alteration inherent to the cargo, it would blur the distinction between an insured accident and a product quality issue.
Therefore, even if the cargo is damaged, if the cause is judged to be the inherent nature of the cargo rather than an external accident, payment of insurance benefits becomes difficult.
In insurance claims, not only the presence of damage but also whether the cause qualifies as an insured peril covered under the policy is critical.
Relation to the UK Marine Insurance Act 1906
The UK Marine Insurance Act 1906 also treats damage caused by inherent vice or the cargo’s own nature as a significant exemption issue under marine insurance.
In UK common law-based marine insurance practice, it is crucial to identify the proximate cause of damage and determine whether that cause is an insured risk or an exempted risk.
If inherent vice is found to be the proximate cause, even if the damage is discovered during transport, insurance coverage may be denied.
On the other hand, even if the cargo was originally prone to damage, if the actual cause of damage was an external incident such as seawater intrusion, accidental temperature deviation, or container damage, the claim may not be denied solely due to inherent defects.
In practice, it is necessary to confirm not only whether the cargo had weaknesses, but also what directly caused the damage.
This proximate cause assessment is important for marine cargo insurance claims and determining carrier liability.
Common Misunderstandings
Inherent defects are a point prone to misunderstandings in insurance claims and carrier liability.
| Common Misunderstanding | Correct Understanding | Practical Notes |
|---|---|---|
| If there is damage, it will be covered by insurance | Even if the cargo is damaged, claims may be denied if the cause is an inherent defect or natural deterioration | Confirm not only the existence of damage but also whether external incidents occurred |
| All cases of inherent defects lead to denial | Even if the cargo has deteriorative properties, compensation may be covered if the proximate cause is an external incident | Check for external causes such as seawater wetting, temperature deviation, and container damage |
| Damage occurring during transportation is always the carrier's responsibility | Even if found during transit, if the cause is the cargo's inherent nature or poor packing, the carrier may not be liable | Separate the timing of discovery and the cause of the damage |
| All rust and mold are inherent defects | Even rust and mold may be considered external incidents if caused by external water intrusion, abnormal condensation, or temperature management errors | Check for wet marks, salt reactions, temperature and humidity records, and Survey Reports |
| There is no arguing if the insurer claims inherent defects | If pre-shipment condition, packing specifications, and external abnormalities during transport are demonstrated, inherent defects alone may not explain the damage | Organize counter-evidence and verify proximate cause |
| Poor packing and inherent defects are the same | Inherent defects relate to the cargo's own nature; poor packing means insufficient packaging or protection for transport | Confirm cargo characteristics and packing design separately |
| Container sweat is always the carrier’s responsibility | Internal condensation can be treated as a combination of cargo nature, insufficient moisture-proof packing, and transport environment | Distinguish between external water intrusion and internal condensation with documentation |
Relationship with Carrier Liability
Carriers may also claim exemption from liability for damage caused by the cargo's inherent nature.
Carriers have the duty to transport cargo safely, but if the cargo itself has properties or conditions that cannot withstand normal transport, it is difficult to hold carriers responsible for all such damage.
For example, cargo that cannot endure the expected temperature and humidity changes during normal maritime transport, food that was already decayed before shipment, or cargo vulnerable to rust or mold due to moisture content may be considered damaged due to their inherent nature rather than carrier negligence, even if damage is discovered during transport.
However, this does not apply if the carrier or freight forwarder received necessary instructions for temperature control, dangerous goods information, handling precautions, or segregation requirements but failed to arrange these properly.
It is necessary to distinguish between inherent defects and errors or mismanagement in arrangements by the carrier or freight forwarder.
Distinguishing from External Incidents
When inherent defects become an issue, the most important point is distinguishing them from external incidents.
Rust, mold, decay, deterioration, and leakage can result from either the cargo’s inherent properties or from external incidents during transport.
For instance, rust on metal products can have different liability outcomes depending on whether it was caused by seawater wetting, rain exposure, container sweat, internal moisture in packing, or pre-existing rust before shipment.
Similarly, for food spoilage, it is necessary to check whether it was a quality issue at shipment, a break in refrigerated or frozen control, or temperature deviations caused by transport delay.
Comparison of Inherent Defects and External Incidents
| Damage Type | When Treated as Inherent Defect | When Considered an External Incident | Documentation to Check |
|---|---|---|---|
| Rust / Corrosion | Cargo inherently sensitive to moisture, pre-existing rust before shipment, insufficient rust prevention treatment | Confirmed seawater wetting, rain exposure, container damage, or abnormal water intrusion | Pre-shipment photos, rust prevention treatment records, salt reaction tests, container photos, Survey Report |
| Decay | Quality degradation progressed before shipment, short or no margin on expiry date | Break in refrigerated/frozen control, temperature deviation, abnormal delay confirmed | Pre-shipment inspection, temperature records, data logger, arrival inspection, transport records |
| Deterioration / Separation of Components | Cargo naturally prone to separation or solidification by temperature changes or time | Confirmed abnormal high/low temperature, vibration, misplacement, or storage condition violations | SDS, quality standards, temperature records, manufacturer opinions, Survey materials |
| Leakage | Container degradation, poor sealing, structure vulnerable to internal pressure changes | Container damage due to dropping, impact, contact with other cargo, or handling accidents | Container photos, packing condition, shock records, handling records, accident photos |
| Mold | Excess moisture in cargo or packing materials, insufficient moisture-proof measures | Confirmed external water intrusion, abnormal condensation, storage area flooding, or rain exposure | Packing moisture content, wet marks, temperature and humidity records, container interior photos |
| Spontaneous Heating / Ignition | Cargo components or state causing spontaneous heating | Confirmed abnormal external heating, misloading, poor ventilation, or temperature control failure | SDS, loading conditions, temperature records, accident report, expert opinions |
| Crystallization / Solidification | Cargo naturally prone to crystallization over time or with temperature decrease | Transport or storage outside specified temperature, condition violations, abnormal long delays confirmed | Quality specifications, temperature conditions, data logger, storage records, manufacturer reports |
You cannot determine whether damage is due to an inherent defect or an external accident based on the type of damage alone. Judgment is made by combining the condition at shipment, transportation conditions, the situation at discovery, and whether there were any external abnormalities.
Issue of Burden of Proof
In disputes over inherent defects, the key issue is who must prove what.
The shipper or insured party must explain not only that damage occurred to the cargo but also that the damage was caused by an accident covered under the insurance.
On the other hand, the insurance company or carrier may, when claiming exemption, point to the cargo’s inherent characteristics or issues in packaging or quality as grounds.
In actual logistics practice, not only the formal burden of proof but also the presence or absence of evidence can determine the outcome.
If there are no pre-shipment inspection records, no photos of packaging, no temperature records, no remarks at receipt, or insufficient photos when the damage was discovered, it becomes difficult to explain that the damage was caused by an external accident.
If exemption is claimed on the grounds of inherent defects, simply stating "damage occurred during transportation" is insufficient.
It is necessary to present materials showing that the cargo was in normal condition at shipment, that there was an external accident or abnormal environment during transport, and that the damage situation cannot be explained solely by the cargo’s natural inherent deterioration.
Organizing Documentation to Counter Claims of Inherent Defects
To counter exemption claims based on inherent defects, materials indicating the existence of an external accident, normal condition at shipment, proper packaging, and abnormal transportation environment are important.
| Type of Damage | Main Supporting Materials | Contents to Explain | Points of Caution |
|---|---|---|---|
| Rust / Corrosion | Pre-shipment photos, rust prevention treatment records, packaging photos, salt reaction tests, container exterior photos | That the cargo was normal at shipment and that external water or salt exposure may have occurred during transportation | Document the extent, depth, and location of rust with photos |
| Decay / Quality Deterioration | Pre-shipment inspection, quality certificates, temperature records, data loggers, inspection at arrival | That there were no issues with quality at shipment and that temperature deviations or abnormal delays during transport may have affected quality | Cross-check temperature conditions against actual temperature records |
| Deterioration / Separation of Components | SDS, manufacturer’s opinions, temperature conditions, transport records, survey reports | That this damage is unlikely under normal transport and was possibly caused by abnormal environments | Explain both cargo characteristics and transport conditions |
| Liquid Leakage | Photos of containers, packaging conditions, impact records, handling logs, photos at unpacking | That the container itself did not deteriorate but was damaged by external force during transportation | Confirm the damage locations on containers and traces of external force |
| Mold | Pre-shipment photos, condition of packing materials, moisture protection measures, temperature and humidity records, photos of water stains | That the mold was not present before shipment but may have been caused by water exposure or abnormal condensation during transport | Correlate the mold extent with the water stain areas |
| Spontaneous Heating / Spontaneous Combustion | SDS, stowage conditions, temperature records, ventilation conditions, accident reports, expert opinions | That not only the cargo’s natural propensity for heating but also transport environment or management deficiencies may have contributed | Confirm the transmission status of dangerous goods information and handling instructions |
| Crystallization / Solidification | Temperature conditions, data loggers, manufacturer’s reports, transport duration, storage records | That solidification may have occurred due to deviation from specified temperatures or abnormal delays | Distinguish between normal natural changes and abnormal environmental effects |
Rust Damage and Inherent Defects
Rust damage is a type of damage where separating inherent defects from external accidents is especially challenging.
Metal products tend to rust when exposed to moisture or salt, so insurance companies or carriers may point to “cargo’s inherent nature,” “poor packaging,” or “inadequate rust prevention treatment.”
However, if it can be confirmed that seawater entered during transport, the container had holes, there was rain exposure, or abnormal condensation occurred inside the container, this indicates an external cause rather than simply inherent defects.
For rust damage, the extent and depth of rust, moisture on packaging, water stains inside the container, salt reaction tests, pre-shipment photos, whether rust prevention treatment was applied, and condition during devanning are all important.
You cannot immediately determine whether rust is due to inherent defects or transport accidents just from the presence of rust.
Decay, Deterioration, and Quality Degradation
Decay, deterioration, component separation, solidification, sedimentation, discoloration, and changes in odor can be issues for food, chemicals, pharmaceuticals, cosmetics, liquid cargo, and powder cargo.
These may be due to the cargo’s inherent nature or caused by temperature control errors or abnormal transport conditions.
From the perspective of insurance companies and carriers, when cargo naturally tends to deteriorate, they tend to claim exemption by citing inherent defects or the cargo’s inherent nature as the cause of damage.
Especially if necessary temperature conditions or handling requirements for transport were not clearly communicated, the shipper’s information provision or packaging design may be questioned.
For such cargo, confirmation of pre-shipment quality inspection, lot information, expiration or best-before dates, SDS, temperature conditions, data loggers, temperature records during transport, and inspection results upon arrival is necessary.
When quality deterioration occurs, it is necessary to distinguish with documentation whether it is the cargo’s natural inherent change or caused by abnormal environments during transportation.
Stepwise Flow When Exemption Is Claimed Due to Inherent Defects
If exemption is claimed citing inherent defects, check the type of damage, pre-shipment condition, packaging, transport environment, and presence or absence of external accidents in that order.
| Step | Main Action | Points to Check | Precautions |
|---|---|---|---|
| Verify Exclusion Claims | Review the claims made by the insurance company or carrier | Identify whether they are pointing to intrinsic defects, poor packaging, natural deterioration, or the cargo’s inherent nature | Do not accept claims without clear details |
| Sort Damage Types | Classify damage such as rust, spoilage, deterioration, leakage, mold, etc. | Scope of damage, discovery timing, progression status | Do not determine the cause based on results alone |
| Confirm Pre-Shipment Condition | Verify that the cargo was in normal condition at shipment | Inspection records, pre-shipment photos, quality certificates, operational checks | Difficulty in rebuttal arises without pre-shipment documentation |
| Confirm Packaging and Handling Conditions | Check that packaging and conditions were appropriate for the cargo characteristics | Packaging specifications, moisture-proofing, rust prevention, temperature conditions, SDS, handling instructions | Organize issues separating packaging defects from intrinsic defects |
| Check for External Abnormalities During Transport | Confirm if there were external accidents or abnormal environmental conditions | Sea water exposure, rain exposure, temperature deviations, delays, container damage, cargo handling incidents | Collect evidence indicating external causes |
| Review Survey and Analysis Results | Examine Survey Reports and inspection results | Proximate cause, damage generation mechanism, relation to external accidents | Obtain manufacturer or expert opinions as needed |
| Submit Opposing Evidence | Organize and submit materials showing external causes or proper pre-shipment condition | Photos, records, temperature data, salt reaction tests, receipt remarks | Clearly distinguish facts from assumptions in explanations |
| Organize Payment and Recovery Feasibility | Confirm prospects for insurance claims and claims against carriers | Insurance terms, exclusions, carrier liability, Claim Letter | Manage insurance claims and carrier recovery separately |
| Organize Recurrence Prevention | Review packaging, conditions, and documentation for future shipments | Packaging specifications, temperature control, pre-shipment inspections, insurance conditions | Prevention of intrinsic defect risks requires advance measures |
Pre-emptive Measures That Can Be Taken
To avoid disputes over intrinsic defects, preparation before shipment is essential.
Check the cargo nature, required temperature and humidity conditions, rust prevention treatments, packaging specifications, stowage conditions, transportable duration, and insurance terms in advance.
For cargo prone to rusting, consider rust prevention treatments, desiccants, barrier packaging, container selection, and condensation countermeasures.
For temperature-controlled cargo, decide in advance the set temperature, allowable temperature range, pre-cooling, data loggers, and procedures in case of temperature deviations.
For foodstuffs and chemicals, confirm shipment quality, expiration dates, SDS, and transport environment conditions.
When arranging insurance, accurately declare the cargo nature and confirm whether standard insurance terms are sufficient.
For special cargo or cargo with a high risk of quality deterioration, consult insurance companies or specialists beforehand and prepare necessary conditions and supporting documents.
Cases Commonly Causing Problems in Practice
With intrinsic defects, boundaries between rust, spoilage, deterioration, leakage, mold, temperature control, and packaging defects tend to become issues.
| Case | Issue | Points to Confirm | Practical Response |
|---|---|---|---|
| Rust Occurrence on Metal Parts | Dispute over intrinsic defect, insufficient rust prevention, or sea water exposure | Pre-shipment photos, rust prevention measures, salt reaction tests, container water traces | Separate rust causes into external water exposure and cargo characteristics |
| Food Spoilage | Dispute over shipment quality, transport delay, temperature control failure, natural deterioration | Pre-shipment inspections, expiration date, temperature records, data logger | Determine whether spoilage is natural or due to abnormal transport environment |
| Chemical Component Separation | Whether inherent cargo property or temperature deviation, vibration, or storage condition violations | SDS, manufacturer opinions, transport temperature, storage conditions | Match cargo characteristics with transport conditions |
| Liquid Cargo Leakage | Whether container deterioration or transport shock/cargo handling accident | Container damage locations, packaging condition, shock marks, photos at unpacking | Separate container intrinsic problems from external impact |
| Container Sweat Causing Mold Growth | Possibly caused by internal condensation or insufficient moisture control rather than external water intrusion | Temperature and humidity logs, moisture-proof packaging, desiccants, moisture patterns | Confirm causes of condensation and packaging specification |
| Temperature Deviation in Refrigerated Cargo | Dispute over whether deterioration is due to inherent cargo or reefer management error | Set temperature, actual temperature records, pre-cooling, power source logs, quality inspections | Organize causality between temperature deviation and quality deterioration |
| Damage to Self-Heating Cargo | Issue whether intrinsic heat generation or stowage, ventilation, or declaration failure | SDS, dangerous goods declaration, stowage conditions, temperature records | Confirm the provided cargo information and arrangements |
| Insurance Company's Claim of Intrinsic Defect Exclusion | Need to prove damage was caused by external accidents with supporting evidence | Pre-shipment condition, packaging, transport abnormalities, survey, photos | Verify basis of exclusion claim, organize, and submit opposing evidence |
Verification Checklist
When intrinsic defects are an issue, confirm separately the cargo nature, pre-shipment state, packaging, transport environment, external accidents, and insurance terms.
| Situation for Confirmation | Party to Confirm With | Items to Confirm | Actions if Issues Are Found |
|---|---|---|---|
| At Discovery of Accident | Shipper, Consignee, Warehouse, Delivery Destination | Date and time of damage discovery, location of discovery, cargo condition, presence of photos | Take photos before moving the actual goods to preserve condition |
| When Confirming Cargo Characteristics | Shipper, Manufacturer, Exporter | Perishability, hygroscopicity, heat generation, temperature conditions, need for rust prevention, SDS | Verify cargo-specific properties through documentation |
| When Confirming Pre-Shipment Condition | Shipper, Exporter, Inspection Company | Pre-shipment photos, inspection records, quality certificates, operation checks | Collect documentation proving cargo was in normal condition at shipment |
| When Confirming Packaging | Shipper, Packing Company, Freight Forwarder | Packing specifications, waterproofing, moisture-proofing, rust prevention, securing, presence of drying agents | Check if packing matched the cargo characteristics |
| When Confirming Transportation Environment | Freight Forwarder, Shipping Company, Warehouse, Delivery Company | Temperature, humidity, delays, storage location, stowage conditions, container condition | Organize whether any abnormal conditions beyond normal transport occurred |
| When Confirming External Accidents | Surveyor, Insurance Company, Carrier | Seawater exposure, rain damage, container damage, handling accidents, temperature deviations | Collect documentation indicating external causes |
| When Confirming Insurance Conditions | Insurance Company, Insurance Agent | ICC terms, exclusion for inherent defects, exclusion for poor packing, presence of special clauses | Check the basis for any deductible claims |
| When Confirming Claim Letter | Carrier, NVOCC, Warehouse Company, Delivery Company | Requirement for submission, submission deadline, delivery records, possible cause of liability | Consider protecting rights even if the cause is not yet determined |
| When Confirming Analysis / Survey | Surveyor, Analytical Institution, Manufacturer | Cause of damage, proximate cause, relation to external accident, possibility of natural deterioration | Obtain expert opinions as needed |
| When Responding to Deductible Claims | Insurance Company, Insurance Agent, Shipper | Reason for inherent defect classification, counter-evidence, need for additional documentation | Organize factual information and documentation, and submit supplementary explanations |
Points to Note in Freight Forwarder Practice
When freight forwarders or NVOCCs are involved in discussions about inherent defects, it is necessary to separately organize the cargo's nature, packaging, transportation conditions, and condition at the time of accident discovery.
Avoid immediately concluding at the discovery of an accident that "this is a transport accident" or "this is due to the nature of the cargo."
In particular, with rust, mold, decay, deterioration, leakage, or poor temperature control, there may be a combination of external accidents, packing defects, inherent cargo characteristics, and carrier management errors.
Freight forwarders should organize transport documents in their possession, such as B/L, AWB, receipts, loading/unloading records, temperature logs, container numbers, seal numbers, and copies of Claim Letters, cooperating with shipper and insurance company verifications.
Also, confirm whether cargo characteristics, temperature conditions, dangerous goods information, and handling precautions were shared in advance.
Example
Consider a case where metal parts were shipped in a marine container and rust was found upon unpacking at the import location.
The insurance company pointed out the possibility of inherent defect or insufficient rust-preventive packaging, since the cargo is metal and has a nature prone to rust due to moisture.
On the other hand, the shipper submitted pre-shipment photos, rust prevention treatment records, packing photos, wet marks inside the container, photos from devanning, and survey reports.
As a result, traces of external water ingress inside the container were confirmed, and rust formation could not be easily explained by normal natural deterioration alone.
In cases like this, it is important not just to have a result of “rusting,” but to demonstrate by documentation how the cargo condition was before shipment and what external causes occurred during transport.
To counter claims of inherent defect, preserving evidence not only after damage discovery but also from before shipment is highly significant.
Practical Points
Inherent defects refer to the nature or condition of the cargo itself, where damage or deterioration naturally occurs even without external accidents.
This tends to be excluded under marine cargo insurance or carrier liability, causing issues particularly with rust, decay, deterioration, spontaneous heating, leakage, or mold damage.
Practically, distinguishing whether damage is caused by inherent defect or external accident is most important.
If there are factors such as seawater exposure, rain damage, container damage, temperature deviations, handling accidents, or contamination from other cargo, the judgment may differ from a simple inherent defect.
To oppose deductible claims for inherent defects, it is necessary to demonstrate the pre-shipment condition, packaging specifications, transportation environment, and situation at damage discovery with documentation.
Understanding cargo characteristics and preparing packaging, temperature control, insurance terms, and evidence preservation in advance is the most realistic measure to address inherent defect risks.
Summary
Inherent Vice refers to the property of cargo itself—including its nature, condition, composition, structure, and tendency to deteriorate—that causes damage or alteration without external accidents.
Marine cargo insurance and carrier liability often exclude damages caused by inherent vice, making insurance claims or compensation claims against carriers less likely to be accepted.
However, simply having cargo prone to deterioration does not automatically mean all damage is excluded as inherent vice.
If the actual cause of damage is an external accident such as seawater wetting, rain exposure, container damage, temperature deviation, handling accident, or contamination from other goods, it may not be handled solely as inherent vice.
In disputes over inherent vice, documents such as pre-shipment condition, packaging specifications, cargo characteristics, transportation environment, photos at damage discovery, survey reports, temperature records, and analysis results are important.
Freight forwarders and NVOCC should avoid early definitive conclusions and separately organize cargo characteristics, packing deficiencies, container sweat, water damage, and carrier liability when investigating causes.
