Institute Cargo Clauses Explained (A, B, C): What’s Covered, What’s Not, and Which You Need?

Introduction: Why Institute Cargo Clauses matter

• What Institute Cargo Clauses are
• The difference between ICC (A), ICC (B), and ICC (C)
• What each clause typically covers and excludes
• Which option is best for different types of cargo and journeys
• Common mistakes businesses make when arranging cargo cover

What are Institute Cargo Clauses?

• Fire and explosion
• Vessel or vehicle accidents
• Theft (depending on clause)
• Water damage
• General average and salvage charges (depending on clause)

• Provide a recognised baseline for cover
• Make it easier to compare policies
• Reduce confusion around what is and isn’t insured

• Institute Cargo Clauses (A) – broadest cover (“all risks” style)
• Institute Cargo Clauses (B) – mid-level cover (named perils)
• Institute Cargo Clauses (C) – basic cover (limited named perils)

Quick overview: ICC (A) vs ICC (B) vs ICC (C)

• ICC (A): Covers most accidental loss/damage unless specifically excluded
• ICC (B): Covers a defined list of risks (more than C, less than A)
• ICC (C): Covers a smaller list of major risks only (most limited)

Institute Cargo Clauses (A): “All risks” style cover

What ICC (A) is designed for

• The goods are high value
• The goods are fragile or damage-prone
• The route involves multiple handling points
• The business wants broad protection and fewer grey areas at claim time

What ICC (A) usually covers

• Theft (including pilferage, depending on policy structure)
• Accidental damage during handling/loading/unloading
• Water damage (rain, seawater ingress, flooding)
• Fire, explosion
• Collision/overturning of vehicle
• Vessel grounding/sinking/capsizing
• Damage caused by heavy weather (subject to exclusions and conditions)
• General average and salvage charges (often included)

Common examples (ICC A)

• A pallet of goods is dropped during unloading and damaged
• Water enters a container and damages packaging and stock
• A lorry overturns en route and goods are destroyed
• A container is stolen from a secure depot (subject to conditions)

What ICC (A) does NOT cover (key exclusions)

• Wilful misconduct by the insured
• Ordinary leakage, ordinary loss in weight/volume, ordinary wear and tear
• Inherent vice (e.g., goods that naturally deteriorate)
• Inadequate packing or preparation (a major claim issue)
• Delay (even if the delay is caused by an insured peril)
• Insolvency or financial default of carriers/owners (depending on wording)
• Unseaworthiness/unfitness of vessel/vehicle if you knew (or should have known)
• War risks, strikes, riots and civil commotions (usually need separate clauses)

Practical takeaway: ICC (A) is broad, but it’s not a substitute for good packaging, correct storage, and proper transit procedures.

Institute Cargo Clauses (B): Wider named perils cover

What ICC (B) is designed for

• The goods are moderately robust
• The business wants a balance between cost and protection
• The risk profile is lower than high-value fragile goods

What ICC (B) usually covers

• Fire or explosion
• Vessel/boat stranded, grounded, sunk or capsized
• Overturning or derailment of land conveyance
• Collision or contact of vessel/vehicle with external object (not water)
• Discharge of cargo at a port of distress
• Earthquake, volcanic eruption, lightning
• General average and salvage charges
• Entry of sea, lake or river water into vessel, craft, hold, conveyance, container or place of storage
• Total loss of any package lost overboard or dropped while loading/unloading
• Jettison (cargo thrown overboard to save the voyage)

Common examples (ICC B)

• A container is damaged due to a vehicle collision
• A storm causes seawater to enter a container and damage goods
• A package is dropped into the sea during loading and is a total loss

What ICC (B) often won’t cover

• Theft/pilferage (unless added)
• Accidental handling damage (unless it falls under a listed peril)
• Non-total loss from dropping during handling (often only total loss is covered)
• Many “mystery damage” scenarios where the cause can’t be tied to a listed peril

Practical takeaway: ICC (B) can be suitable, but claims can become harder if you can’t prove the damage was caused by an insured peril.

Institute Cargo Clauses (C): Basic named perils cover

What ICC (C) is designed for

• The cargo is low value or very robust
• The business is mainly concerned with catastrophic events
• The route is short and simple (fewer handling points)
• Budget is a major factor

What ICC (C) usually covers

• Fire or explosion
• Vessel/boat stranded, grounded, sunk or capsized
• Overturning or derailment of land conveyance
• Collision/contact of vessel/vehicle with external object (not water)
• Discharge of cargo at a port of distress
• General average and salvage charges
• Jettison

Common examples (ICC C)

• A lorry carrying goods overturns and the cargo is destroyed
• A ship catches fire and cargo is damaged
• Cargo is jettisoned to save the vessel

What ICC (C) often won’t cover

• Theft
• Water damage (unless caused by a major insured event)
• Accidental damage during handling
• Partial losses unless tied to a covered peril
• Many common day-to-day transit losses

Practical takeaway: ICC (C) is often too narrow for businesses shipping higher-value stock, fragile goods, or goods that are frequently handled.

Side-by-side comparison (simple)

ICC (A)

• Broad cover (“all risks” style)
• Best for high value, fragile, or frequently handled goods
• Fewer disputes about cause (but exclusions still apply)

ICC (B)

• Mid-level named perils
• Covers water entry and some handling-related total losses
• Often cheaper than A, but more claim friction

ICC (C)

• Basic named perils
• Focused on major accidents/catastrophes
• Cheapest, but most gaps

What about theft, war, and strikes?

• Institute War Clauses (Cargo)
• Institute Strikes Clauses (Cargo)

• Whether theft is included
• Whether war/strikes extensions are required
• Whether there are security conditions (e.g., locked vehicle warranties, tracking requirements)

Key policy features that matter as much as the clause

1) The basis of valuation

• Invoice value
• Plus freight
• Plus a percentage uplift (often 10%) for anticipated profit

2) Excess (deductible)

3) Packing and preparation

• The goods
• The method of transport
• The route
• The season/weather exposure

4) Storage and transit definition

• Extended storage cover
• Stock cover under a property policy

5) Single transit vs annual open cover

Which Institute Cargo Clause should you choose?

Choose ICC (A) if:

• You ship high-value goods
• Your goods are fragile, perishable, or easily damaged
• You have multiple stops, transhipments, or frequent handling
• You want broad cover and smoother claims

Choose ICC (B) if:

• Your goods are moderately robust
• You want a balance between cost and protection
• You can tolerate some gaps (e.g., theft may need adding)

Choose ICC (C) if:

• Your goods are low value and robust
• You mainly want protection against major accidents
• You understand and accept the gaps

Common mistakes businesses make with cargo cover

• Assuming the carrier will pay the full value of lost goods
• Choosing ICC (C) to save cost, then discovering theft/water damage isn’t covered
• Not declaring accurate values or shipment details
• Not checking exclusions for packing, delay, or inherent vice
• Not adding war/strikes where relevant
• Not understanding security conditions (especially for theft-prone cargo)

FAQs: Institute Cargo Clauses (A, B, C)

Are Institute Cargo Clauses legally required?

Does ICC (A) cover theft?

Does ICC (A) cover damage caused by poor packaging?

Does ICC (B) cover water damage?

Does ICC (C) cover water damage?

Are war and strikes covered under ICC (A/B/C)?

Is “all risks” the same as ICC (A)?

Final thoughts: match the clause to the real-world risk

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