Institute cargo clauses

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Institute Cargo Clauses (ICC) were adopted in 1982 at the Institute of London Underwrites. Institute Cargo Clauses are three levels of insurance protection [1]:

  • Institute Cargo Clauses A,
  • Institute Cargo Clauses B,
  • Institute Cargo Clauses C.

Institute clauses are used all over the world. They standardized marine insurance contract terms for: duration, the risk derdized, exclusions, benefit of insurance, claims, avoidance of delay, minimizing losses, and law and practice [2].

Clauses were updated in 2008 by Joint Cargo Committee which includes of members the Lloyds Market Association and International Underwriting Association in 2008 and implemented from 2009 [3].

The new Institut Cargo Clauses are inaccurate replacements Historic Cargo Clauses [4]:

  • Institute Cargo Clauses A = All Risks (A.R)
  • Institute Cargo Clauses B = Witch Average (W.A)
  • Institute Cargo Clauses C = Free of Particular Average (F.P.A)

All Risk

A wide insurance coverage of cargo including coverage due extemal clauses such as collision, fire, pilferage, breakage etc., but doesn't include threats resulting from warfare [5].

Witch Average

A wide insurance coverage that provides protection against partial damage by sea perils, if the partial damage degree 3% or more of the total value of the shipment. When the vessel has sunk, stranded, in collision or been on fire, the parcentage rule is waived and the loss of maritime hazards can be recovered in its entirety [6].

Free of Particular Average

Basic insurance to cover partial losses that arise from dangers related to the sea, excluding total losses, but only in the event that the carrying vessel has sunk, been in collision, been on fire, burnt, stranded [7].

Institute Cargo Clauses A, B, C

Institute Cargo Clauses A refer of all risks of loss of damage to the subject of insurance. In the case of Institute Cargo Clauses B and C, their scope covers only those risks that are specifically identified. Institute Cargo Clauses A, B and C contain in themselves [8]:

The Institute Cargo Clauses A doesn't provide insurance coverage at the time ordinary wear and tear and willful misconduct of the insured [9].

Examples of Institute cargo clauses

  • Institute Cargo Clause (A): This is the most comprehensive form of insurance, providing coverage for all risks of physical loss or damage to the cargo, except for those that are specifically excluded in the policy. Examples of excluded risks may include war, strikes, or nuclear radiation.
  • Institute Cargo Clause (B): This clause provides a lower level of insurance than the A clause and excludes certain risks, such as war or strikes. It also excludes losses caused by general average (GA).
  • Institute Cargo Clause (C): This provides the lowest level of cover and excludes all of the risks excluded by the A and B clauses, as well as losses caused by theft of cargo, losses caused by delay, and any consequential losses.
  • Institute War Clauses (Cargo): This is an additional form of insurance that is typically taken out to cover the risks excluded from the Institute Cargo Clauses. It provides coverage for losses caused by war, strikes, and similar risks.

Advantages of Institute cargo clauses

The Institute Cargo Clauses (ICC) adopted in 1982 at the Institute of London Underwriters offer three levels of protection for goods in transit: A, B, and C. The following are some of the advantages of using these clauses:

  • The ICC provides a consistent set of rules and regulations that are accepted by all parties involved in the transportation of goods.
  • The clauses are designed to protect the interests of both the carriers and the shippers by providing coverage for certain kinds of losses or damages.
  • The clauses are written in plain language and are easily understood even without the assistance of a lawyer or insurance expert.
  • There is a wide range of coverage that can be tailored to meet the specific needs of the shipper and the carrier.
  • The clauses are updated periodically to keep up with the changing needs and demands of the industry.
  • The ICC provides an extra layer of protection for shippers, ensuring that their goods are covered in the event of an unforeseen incident.

Limitations of Institute cargo clauses

The Institute Cargo Clauses (ICC) are three levels of insurance protection adopted in 1982 by the Institute of London Underwriters. They provide coverage for losses from external causes such as fire, theft, and collision. However, there are some limitations to their coverage. Below are the main limitations of the Institute Cargo Clauses:

  • The ICC does not cover losses due to internal causes such as incorrect packing, inadequate loading and stowage, and improper handling.
  • The ICC does not cover losses due to war, civil disturbances, or nuclear incidents.
  • The ICC does not cover losses due to the condition of the goods or the vessel, or due to the negligence of the shipper.
  • The ICC does not cover losses due to Acts of God, such as hurricanes and floods.
  • The ICC does not cover losses due to strikes, riots, or civil commotion.
  • The ICC does not cover any losses incurred prior to loading or after discharge of the goods.
  • The ICC does not cover losses due to the insolvency of the carrier or the shipper.

Other approaches related to Institute cargo clauses

Institute Cargo Clauses (ICC) are a set of three levels of insurance protection adopted in 1982 by the Institute of London Underwriters. Other approaches related to ICC include:

  • Mineral Extraction Risk Insurance (MERI): MERI is a type of insurance specifically designed to cover risks associated with mineral extraction, such as environmental damage and business interruption.
  • Marine Cargo Insurance: Marine cargo insurance provides comprehensive coverage for the loss or damage of goods during the shipping process, including perils like fire, theft, and accidental loss.
  • Hull Insurance: Hull insurance is a type of policy that covers the physical structure of a vessel, including its machinery and equipment, from damage or destruction due to accidents or other perils.

In summary, ICC is just one approach to providing insurance protection for goods in transit - there are several other approaches, such as MERI, marine cargo insurance, and hull insurance, that can be used to protect against a wide range of risks.


  1. Hinkelman E.G, 2008, p.306
  2. Hinkelman E.G, 2008, p.306
  3. Lee E.S, 2012 ,p.231
  4. Hinkelman E.G, 2008, p.306
  5. Hinkelman E.G, 2008, p.306
  6. Hinkelman E.G, 2008, p.306
  7. Hinkelman E.G, 2008, p.306
  8. Kouladis N., 2006, p.248
  9. Lee E.S, 2012 ,p.231

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Author: Anna Lipowiecka-Migdał