Article 347 of the Saudi Commercial Maritime Law
المادة 347 من النظام البحري التجاري · الفصل الرابع: التأمين على البضائع
The article caps the sum insured on goods at the highest of three amounts: purchase price or current price with transport and expected profit, value on arrival, or sale price plus agreed amounts.
Official text (Arabic)
This article has not been amended since the law was issued.
لا يجوز أن يزيد مبلغ التأمين على الحد الأعلى من المبالغ الآتية:
1- ثمن شراء البضاعة في زمان الشحن ومكانه, أو سعرها الجاري في هذا الزمان والمكان إذا كانت غير مشتراة، مضافاً إليه مصروفات نقل البضاعة إلى ميناء الوصول, والربح المتوقع.
2- قيمة البضاعة في زمان الوصول ومكانه, أو في التاريخ الذي كان يجب أن تصل فيه في حالة هلاكها.
3- ثمن بيع البضاعة إذا باعها المؤمن له مضافاً إليه المبالغ الأخرى التي قد يتفق عليها في عقد البيع.
This is the official Arabic wording, the only legally binding version. We do not translate the law itself; the explanation below is ours. Official source: Bureau of Experts at the Council of Ministers
Article 347 explained in plain English
This article sets a ceiling on the sum insured on goods: it may not exceed the highest of the following three amounts:
- The purchase price at the time and place of loading, or their current price at that time and place if not purchased, plus the expenses of carrying them to the port of arrival and the expected profit.
- The value of the goods at the time and place of arrival, or on the date they should have arrived if they were lost.
- The sale price of the goods if the insured sold them, plus other amounts that may be agreed in the sale contract.
The insured can choose a sum insured within the highest of these values, but may not exceed it. Note that the first item allows the expected profit and transport expenses to be included, so the insurance is not limited to the bare price of the goods.
Article 348 sets the method of estimating losses to goods by the difference between their value damaged and sound at one time and place. Article 346 requires ships carrying oil to carry a civil liability insurance certificate.
Practical example
A company in Jeddah bought goods for SAR 400,000, the cost of carrying them to the port of arrival is SAR 50,000, the expected profit is SAR 100,000, and their expected value on arrival is SAR 500,000. It can insure for an amount not exceeding the higher of SAR 550,000 (first item) and SAR 500,000 (second item), that is, SAR 550,000.
Translated from our Arabic explanation with machine assistance. For guidance only; it does not replace advice from a lawyer on your situation.
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Frequently asked questions about Article 347 of the Saudi Commercial Maritime Law
What is the maximum sum insured on marine cargo?
It may not exceed the highest of: the purchase price or current price at the time and place of loading plus transport expenses and expected profit; their value at the time and place of arrival; or their sale price plus other amounts agreed in the sale contract.
Can expected profit be included in the sum insured?
Yes, the first item adds to the purchase price or current price the expenses of carriage to the port of arrival and the expected profit.
More articles on Marine Insurance
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Ships carrying the Kingdom's nationality are not permitted to sail to areas dominated by the dangers of war, piracy or armed robbery until proof of insurance of their crew against these dangers is provided.
لا يصرح للسفن التي تحمل جنسية المملكة بالسفر إلى المناطق التي تغلب عليها أخطار الحرب, أو أعمال القرصنة أو السطو المسلح, إلا بعد تقديم مالكها أو مجهزها أو مستأجر
- Article 215
Any agreement made before the incident that exempts the carrier from liability for loss of or damage to the goods, alters the burden of proof placed on him, or assigns to him the rights arising from cargo insurance is void.
يقع باطلاً كل اتفاق يتم قبل وقوع الحادث الذي نشأ عنه الضرر, ويكون موضوعه أحد الأمور الآتية: 1- إعفاء الناقل من المسؤولية عن هلاك البضائع أو تلفها. 2- تعديل عبء
- Article 236
The carrier must hold insurance or a guarantee from a recognized body covering its liability for death and bodily injury, and the injured party may claim directly against the insurer or guarantor.
يجب أن يكون لدى الناقل تأمين أو ضمان من جهة معترف بها، لتغطية مسؤوليته عن الوفاة والإصابات البدنية. وفي هذه الحالة يجوز للمتضرر الرجوع المباشر على المؤمن أو الض
- Article 293
The article provides that the maritime insurance provisions apply to an insurance contract covering maritime risks, without prejudice to the Law on Supervision of Cooperative Insurance Companies.
دون إخلال بالأحكام الواردة في نظام مراقبة شركات التأمين التعاوني, تسري أحكام هذا الباب على عقد التأمين الذي يكون موضوعه تغطية الأخطار البحرية.
- Article 294
The article requires a maritime insurance contract and any change to it to be proved in writing, sets the particulars of the insurance policy, and makes a provisional policy binding on both parties until the final policy is issued.
1- لا يثبت عقد التأمين وكل ما يطرأ عليه إلاَّ بالكتابة. 2- يصدر بموجب عقد التأمين وثيقة تأمين تتضمن البيانات الآتية: أ- تاريخ عقد التأمين ومكانه. ب- اسم المؤمِّ
- Article 295
The article allows a maritime insurance policy to be issued in the name of the insured, to his order or to bearer, and gives its lawful holder the right to claim compensation, subject to the insurer's defenses against the insured.
1- تكون وثيقة التأمين باسم المؤمن له أو لأمره، أو لحاملها. 2- يكون لحامل الوثيقة الشرعي الحق في المطالبة بالتعويض, وللمؤمِّن أن يحتج في مواجهته بالدفوع التي يجو
The texts are reproduced from the official website of the Bureau of Experts at the Council of Ministers for reference; where they differ, the officially published Arabic text prevails. This content is not legal advice.