If the schooner carrying your wine sank tonight, who would pay you for it?
Most producers answer "the ship's insurance." For a lot of sail cargo shipments, the real answer could be nobody, or a fraction of what the wine was worth. Every party in that chain would still be acting within the law.
In May 2024, the 1916 Dutch-built schooner De Gallant, run by the French operator Blue Schooner, capsized in a sudden squall north of Great Inagua in the Bahamas. Two crew members lost their lives. Her cargo of coffee, cocoa and cane sugar went down in more than 2,000 metres of water. The loss of life is the tragedy. The loss of the cargo raises a question every producer should answer before loading a single case: whose money covers it?
The answer sits in three separate insurance policies, a size line drawn at 300 gross tonnage, and a century-old liability regime that was written to protect shipowners.
Three Policies, Three Different Owners
Shipping insurance splits into three parts. Only one of them protects your goods, and no law makes anyone buy that one.
Look at the middle row closely. P&I cover pays what the shipowner owes you. It does not pay what your wine is worth. Those two numbers are often far apart, for reasons covered below.
The 300 GT Line
Compulsory shipowner insurance kicks in by size, measured in gross tonnage (GT), a volume measure of the ship.
- EU Directive 2009/20/EC requires ships of 300 GT or more, flying an EU flag or entering an EU port, to carry insurance for maritime claims up to the limits of the 1996 Limitation Convention. Ships without a certificate can be expelled from EU ports.
- The Nairobi Wreck Removal Convention (in force since 14 April 2015) makes insurance for wreck removal compulsory for ships of 300 GT and above.
- The Bunker Oil Pollution Convention requires insurance only for ships above 1,000 GT.
Below 300 GT, none of these rules applies. Many small sail cargo ships sit right there.
Being under the line does not mean a ship is uninsured. An operator can buy P&I cover voluntarily, and some will. The point is simpler: the law does not make them, and a vessel's website will rarely tell you either way. You have to ask.
A Fully Insured Ship Still Doesn't Insure Your Wine
Say the ship carries full P&I cover. Your claim against it still runs through the carrier's legal liability, and for most sea freight that means the Hague-Visby Rules. Three parts of those rules cut against you:
- Perils of the sea. The carrier is not liable for loss caused by "perils, dangers and accidents of the sea." A sudden squall that capsizes a ship can fall squarely here.
- Nautical fault. The carrier is not liable for errors by the master or crew "in the navigation or in the management of the ship." A bad sail-handling call at 3 a.m. can leave you with no claim at all.
- A cap per package. Where the carrier is liable, payment is limited to 666.67 Special Drawing Rights (SDR) per package or 2 SDR per kilo of gross weight, whichever is higher, unless you declared the value on the bill of lading. One SDR was worth about €1.19 in September 2026.
Shipments to or from US ports usually fall under the US Carriage of Goods by Sea Act instead, which caps liability at $500 per package.
What that looks like for one pallet
Take 100 cases of six bottles, about 925 kg gross on one pallet, worth €9,000 at €15 a bottle.
The gap between the "1 pallet" and "100 cases" rows is a single line of paperwork. Under Hague-Visby, the packages counted are the ones listed on the bill of lading. List the cases, not the pallet.
General Average: You Can Pay Even If Your Wine Arrives Safe
If the crew throws cargo overboard or hires salvors to save the ship, maritime law spreads that cost across every cargo owner aboard, in proportion to value. This is called general average. Your cases can arrive intact and you can still receive a bill.
Uninsured cargo owners must post a cash deposit, bank guarantee or bond before their goods are released. Insured owners hand that job to their insurer. Institute Cargo Clauses (A), the standard "all risks" policy wording, covers general average and salvage charges.
Why Small Sail Ships Struggle to Get Cover
Insurers price risk from data, and traditional sailing cargo ships give them very little. The hulls are often old or wooden, the fleet is tiny, and some vessels fall outside classification society rules written for steel motor ships.
The clearest case is Vega, the 1909 wooden schooner bought by Sailcargo Inc. to carry coffee. The ship "soon met problems with the insurance and the certificates needed to operate the vessel professionally," and never entered cargo service.
This hits your own cargo policy too. Many marine cargo policies include the Institute Classification Clause, which assumes the ship is a "mechanically self-propelled vessel of steel construction" classed with a recognised society. An engineless wooden brigantine does not fit that description. An aluminium schooner does not either. Neither does a 1920 hull, since the clause adds premiums for ships older than 15 years (25 for general cargo ships on regular routes).
Ships outside the clause need to be reported to your insurer promptly. If a loss happens before the insurer agrees terms, cover is only available if it would have been available "at a reasonable commercial market rate." A shipper who never told their insurer the wine was going by sail may find that argument turns against them.
This gap is not unique to sail. A container line's liability is capped by the same rules. The difference is that a small, unclassed sail ship adds the Classification Clause problem on top.
The CIF Trap
Many wine export deals are sold on CIF terms, where the seller buys the insurance. Under Incoterms 2020, CIF requires only the minimum cover: Institute Cargo Clauses (C), at 110% of the contract value.
Clauses (C) covers fire, sinking, collision, jettison and a few other major events. It does not cover seawater entering the ship, theft or breakage. For wine, water damage and broken bottles are the most likely losses. If you want (A) cover under CIF, write it into the contract. Under CIP terms, (A) cover is already required.
Even Grain de Sail, the most established operator on the Atlantic wine route, lists ad-valorem cargo insurance as an optional service "upon request." The default freight booking does not insure your wine at its value. You have to ask.
Five Questions Before You Load
Your wine has a story. Protect the part of that story that happens at sea.
- What is the vessel's gross tonnage, and does it carry P&I cover? Ask for the certificate of entry.
- Which liability rules apply? Hague-Visby, US COGSA, or the operator's own terms. Get it in writing.
- How will the bill of lading count packages? Ask for cases, not pallets. Consider declaring value.
- Does your cargo policy know it's a sailing ship? Give the insurer the name, hull material, age and flag before departure, and confirm the Classification Clause is dealt with.
- Is the cover Institute Cargo Clauses (A), warehouse to warehouse? If you sell CIF, name (A) in the contract.
Sail cargo operators are doing hard, honest work under rules written for steamships. Those rules put the risk on the cargo owner. Once you know that, the fix costs one email to your insurer and one line on your bill of lading.
Resources
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EU Directive 2009/20/EC on the insurance of shipowners for maritime claims (EUR-Lex)
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IMO, "The Nairobi Wreck Removal Convention enters into force"
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Skuld, Insight: Wreck Removal Convention 2007
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UK P&I, International Convention on Civil Liability for Bunker Oil Pollution Damage 2001
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Carriage of Goods by Sea Act 1971, Schedule (Hague-Visby Rules)
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IMF, SDR exchange rates
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Institute Classification Clause 01/01/2001 (If Insurance)
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Institute Cargo Clauses (A) 2009 (If Insurance)
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Sedgwick, "Marine insurance: why institute cargo clauses matter"
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ICC Academy, "CIF & CIP Incoterms 2020 explained"
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Shapiro, "General Average Explained: What Shippers Need to Know"
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Grain de Sail, Transportation services
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VesselFinder, SV Grain de Sail II (IMO 9974656)
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Fairtransport, Tres Hombres
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Westward Shipping News, "Sailing cargo vessel the Avontuur"
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Timbercoast, Ship
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Windassist, "What happened to Sail Cargo Inc?" (10 February 2026)
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The Maritime Executive, "Schooner Running Eco-Cargo Service Lost Off Bahamas with Two Missing"
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Baird Maritime, Vessel Review: Grain de Sail II
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Baird Maritime, Vessel Review: Anemos & Artemis