Institute Cargo Clauses A, B and C explained

The Institute Cargo Clauses (ICC) are standard marine cargo insurance wordings published in London by the Lloyd's Market Association and the International Underwriting Association. The current set is dated 1 January 2009 ("1/1/09"). They come in three levels: (A), the broadest, (B) and (C), the narrowest. Incoterms CIF and CIP refer to them: CIF requires at least ICC (C)-level cover, CIP (since Incoterms 2020) ICC (A)-level cover, unless the parties agree otherwise. Incoterms text is ICC-copyright; verify against your copy

ICC (A): "all risks", except as excluded

Clause 1 of ICC (A) says: "This insurance covers all risks of loss of or damage to the subject-matter insured except as excluded by the provisions of Clauses 4, 5, 6 and 7 below." That reverses the burden: you show a loss happened during the insured transit; the insurer must show an exclusion applies. Theft, pilferage, non-delivery, rough handling and malicious damage are covered unless an exclusion applies.

ICC (B) and (C): named perils

ICC (B) and (C) only cover the specific perils listed in Clause 1. You must prove that one of them caused the loss.

Notice the wording in (B) and (C): perils in clause 1.1 cover loss "reasonably attributable to" the event; perils in clause 1.2 cover loss "caused by" it.

All three: general average, salvage and collision liability

• Clause 2: covers general average and salvage charges adjusted under the contract of carriage and/or governing law and practice, incurred to avoid loss from any cause except the excluded ones. Your insurer will normally issue the general average guarantee. See general average.
• Clause 3: indemnifies you for liability under a "Both to Blame Collision Clause" in the contract of carriage.

The exclusions (Clauses 4 to 7)

All three sets share the same general exclusions (with the extra (B)/(C) exclusion for deliberate damage noted above):

• 4.1 wilful misconduct of the assured;
• 4.2 ordinary leakage, ordinary loss in weight or volume, ordinary wear and tear;
• 4.3 insufficient or unsuitable packing or preparation, where done by the assured or their employees or before the insurance attaches; "packing" includes stowage in a container;
• 4.4 inherent vice or nature of the goods;
• 4.5 delay, even if caused by an insured risk (except general average expenses);
• 4.6 insolvency or financial default of the vessel's owners, managers, charterers or operators, where the assured knew or should have known at loading that it could prevent the normal prosecution of the voyage (this does not apply against a good-faith buyer to whom the policy has been assigned);
• 4.7 in (A) / 4.8 in (B) and (C) nuclear weapons and radioactive force;
• Clause 5 unseaworthiness of the vessel or unfitness of the container or conveyance, where the assured were privy to it at loading;
• Clause 6 war, capture, seizure, mines and torpedoes (cover is available separately under the Institute War Clauses (Cargo));
• Clause 7 strikes, riots, civil commotions and terrorism (available separately under the Institute Strikes Clauses (Cargo)).

When cover starts and ends: the Transit Clause

Under Clause 8 the insurance attaches when the goods are first moved in the warehouse or place of storage named in the policy for immediate loading, continues during the ordinary course of transit, and ends at the first of:

• completion of unloading at the final warehouse at the named destination;
• completion of unloading at any other warehouse the assured choose to use for storage outside the ordinary course of transit, or for allocation or distribution;
• when the assured choose to use a vehicle or container for storage outside the ordinary course of transit; or
• 60 days after completion of discharge overside from the ocean vessel at the final port of discharge.

Cover continues during delay beyond the assured's control, deviation, forced discharge and transhipment (Clause 8.3). If the contract of carriage is terminated short of destination, cover ends unless prompt notice is given and cover continuation requested (Clause 9).

Claims conditions

• Insurable interest (11): you must have an insurable interest in the goods at the time of the loss.
• Forwarding charges (12): reasonable extra costs of unloading, storing and forwarding goods to destination after an insured peril ends the transit early.
• Constructive total loss (13): recoverable only if the goods are reasonably abandoned because actual total loss appears unavoidable or recovery costs would exceed their value on arrival.
• Not for the carrier (15.2): the insurance "shall not extend to or otherwise benefit the carrier or other bailee".
• Duty of assured (16): take reasonable measures to avert or minimise loss, and "ensure that all rights against carriers, bailees or other third parties are properly preserved and exercised"; the insurer reimburses the reasonable cost of doing so.
• Reasonable despatch (18): act with reasonable despatch in all circumstances within your control.
• Law (19): English law and practice.

Which one should I buy?

For manufactured goods, electronics, consumer products and most containerised cargo, ICC (A) is the usual choice: theft and handling damage are among the most frequent causes of loss, and only (A) covers them. (B) and (C) are sometimes used for bulk commodities or low-value goods where the main concern is a major casualty. Your broker can also add war and strikes cover and adjust the transit and valuation terms.

Whatever you choose, the insurance sits alongside the carrier's liability. The insurer pays you, then pursues the carrier up to the convention limit. Use the calculator to see that limit and the uninsured gap.