How specie insurance really works

The international conventions that govern carriage by road, air and sea all limit a carrier’s liability, usually by weight. For ordinary freight that is reasonable. For gold it is almost meaningless: a limit calculated per kilogram might cover the value of a few grams of the metal in the box. Anyone moving bullion without separate insurance is, in practice, self-insured.

What specie cover is

Specie insurance is a specialist class of cover for high-value, portable property — bullion, coins, banknotes, precious stones. It is written mostly in the London market and typically covers all risks of physical loss or damage, in storage and in transit, up to an agreed value.

The conditions that matter

• Approved methods: cover usually applies only when metal moves by approved carriers, in approved vehicles, with the agreed number of crew.
• Limits per conveyance: policies cap the value on any single vehicle, aircraft or vault, which shapes how large consignments are split.
• Documentation: claims depend on proving what was in the consignment and when it was last verified — the chain of custody again.
• Exclusions: war, nuclear risks, sanctions breaches and certain types of fraud are commonly excluded or sub-limited.

Who is the insured, and who gets paid?

When a custodian arranges insurance, the policyholder is usually the custodian. What matters to you is whether you are named as loss payee for your bars, so that a claim is paid for your benefit rather than into the custodian’s general funds. Ask for a certificate of insurance that names you and lists what is covered.

Read the certificate, not the brochure. It tells you the insurer, the policy, the period, the limit and the deductible.

Valuation

Most specie policies settle on replacement value: the cost of buying equivalent metal on the date of loss, up to the insured value. If the gold price has risen sharply since your cover was set, your insured value may no longer be enough. Review it whenever your holdings or the price move materially.

Our standard storage agreement includes cover at full replacement value, and we issue a certificate of insurance naming each client as loss payee for their bars. Clients who prefer to arrange their own cover can do so; we ask for evidence of the policy and a waiver of subrogation.

Common exclusions

Specie policies are broad, but no policy covers everything. The exclusions are usually standard across the market and worth knowing in advance, because they shape how a shipment should be planned rather than just what happens after a loss.

• Losses arising from war, nuclear risks and certain sanctions-related events.
• Shipments that deviate from the agreed route or security arrangements without the insurer’s consent.
• Unexplained shortages discovered only at a later inventory, with no evidence of when they occurred.
• Losses caused by the insured’s own deliberate act or by inadequate packing.

The third point is another reason why inventories matter. A loss that can be tied to a specific hand-over is usually straightforward to claim; a shortage that surfaces months later with no trail can be much harder.

Limits per conveyance

Most policies cap how much may travel in a single vehicle, aircraft or vessel, and how much may sit at a single location at once. Large movements are therefore often split across flights or vehicles, not only for operational security but to stay within those limits. When we plan a shipment we check the limits first and design the movement around them, so the client never discovers an uninsured gap after the fact.

Making a claim

Claims are settled on evidence: the waybill, the seal records, the condition reports at each hand-over and the bar list. A well-documented shipment turns a claim into an administrative exercise. If you arrange your own insurance rather than relying on ours, make sure your insurer knows in advance who will be carrying the metal and how, and ask for written confirmation that our procedures meet their conditions.