Neutral Property Law and Legal Definition

Neutral property refers to property belonging to citizens of a country that is not a party to a war, provided the things are properly used and labeled. For example, harmless neutral property aboard a captured belligerent ship would not normally be subject to seizure. But the hiding of explosives in otherwise neutral property could allow the property to be seized as contraband. The words neutral property in a policy of insurance, have the effect of warranting that the property insured is neutral. That is, it belongs to the citizens or subjects of a state in amity with the belligerent powers. If the warranty of neutrality is false at the time it is made, the policy will be void ab initio.