Institute Cargo Clauses

The Institute Cargo Clauses (ICC) are a set of standardized clauses used in marine cargo insurance policies to define the scope of coverage and the risks insured against. They are developed and maintained by the International Underwriting Association of London (IUA), formerly known as the Institute of London Underwriters (ILU).

There are three main types of ICC clauses, each offering a different level of coverage:

1. ICC Clause A (All Risks):

• Widest Coverage: This clause provides the most comprehensive coverage, insuring against “all risks” of loss or damage to the cargo during transit, except for those specifically excluded.
• Covered Perils: Includes a wide range of perils, such as:
• Maritime perils: Storms, sinking, collision, grounding, fire, explosions.
• Extraneous perils: Theft, pilferage, non-delivery, strikes, riots, and civil commotions.
• Other perils: May also cover specific risks depending on the policy terms, such as damage due to temperature changes or delays in transit.
• Exclusions: Typical exclusions include:
• Willful misconduct of the insured
• Inherent vice of the cargo
• Improper packaging
• Delay
• War risks
• Nuclear risks

2. ICC Clause B (Named Perils):

Mid-Level Coverage: This clause provides coverage for a specified list of named perils, including:

• Fire or explosion
• Vessel or craft being stranded, grounded, sunk, or capsized
• Overturning or derailment of land conveyance
• Collision or contact of vessel, craft, or conveyance with any external object other than water
• Discharge of cargo at a port of distress
• Earthquake, volcanic eruption, or lightning
• General average sacrifice
• Jettison
• Exclusions: Excludes any perils not specifically named in the clause.

3. ICC Clause C (Basic Risks):

Most Basic Coverage: This clause provides the most basic level of coverage, insuring against a limited number of perils, including:

• Fire or explosion
• Vessel or craft being stranded, grounded, sunk, or capsized
• Overturning or derailment of land conveyance
• Collision or contact of vessel, craft, or conveyance with any external object other than water
• General average sacrifice
• Jettison
• Exclusions: Excludes many common perils, including theft, pilferage, and water damage.

Choosing the Right Clause:

The choice of ICC clause depends on the specific needs and risk tolerance of the cargo owner.

• Clause A: Suitable for high-value or fragile cargo where comprehensive protection is needed.
• Clause B: Offers a balance of coverage and affordability.
• Clause C: Provides basic protection for low-value or less susceptible cargo.

Global Perspective

The Institute Cargo Clauses are widely used in marine cargo insurance policies worldwide, providing a standardized framework for coverage and facilitating international trade. They are recognized and accepted by insurers, brokers, and traders across the globe, promoting clarity and consistency in marine cargo insurance.