Understanding the Institute Cargo Clauses and Your Marine Insurance Options

In Iran, we issue shipment policies that adhere to the same standard world-class terms and conditions used internationally, including those established in London.

Lloyd's, a globally recognized market, categorizes shipping insurance cover into one of three essential standards known as the Institute Cargo Clauses:

1. Institute Cargo Clause A (ICC A) - All Risks

This provides the widest level of coverage, protecting your cargo against virtually all risks of loss or damage. It is the preferred choice for maximum security on high-value or vulnerable goods. (View Full Clause Details)

2. Institute Cargo Clause B (ICC B) - Named Perils

A mid-range option, ICC B covers losses or damage attributable to a list of named perils, such as fire, explosion, entry of sea/lake water, and jettisoning. This provides balanced protection. (Start a Claims Process)

3. Institute Cargo Clause C (ICC C) - Minimum Cover

This is the most restrictive coverage, covering only major casualties like fire, explosion, or vessel sinking/stranding. It is suitable for low-risk cargo or when minimum cover is required. (Contact a Marine Specialist)

Institute Cargo Clause C: Minimum Coverage for Total Loss of Goods

The Institute Cargo Clause C (ICC C) provides the Minimum Cover available in marine transport insurance. This policy is specifically designed to cover the total loss of your goods, occurring all at once, due to major casualties affecting the vessel or conveyance.

This insurance is subject to the following Named Perils:

• Fire or Explosion
• Vessel or craft being stranded, grounded, sunk, or capsized.
• Land transit vehicle being overturned or deviated from its line.
• Collision or contact of vessel, craft, or conveyance with any external object other than water.
• Discharge of cargo at a port of distress (related to General Average). (Learn about General Average)
• Cargo sacrifice (a General Average loss).
• Jettison (throwing cargo overboard) in order to lighten the vessel. (Compare ICC C with ICC A & B)

For broader protection against partial damage and other risks, we recommend reviewing our comprehensive options under the Institute Cargo Clauses A and B.

Institute Cargo Clause B (ICC B): Intermediate Named Perils Coverage

The Institute Cargo Clause B (ICC B) provides an intermediate level of coverage for marine, land, and air shipments. Known as a Named Perils policy, it includes all the risks covered under ICC C, while crucially adding protection against water damage and specific natural or handling accidents.

This policy covers losses arising from all major casualties (as per ICC C), plus the following additional Named Perils:

• Entry of sea, lake, or river water into the vessel, craft, hold, conveyance, container, or place of storage.
• Washing overboard or Jettison (throwing cargo overboard) to lighten the vessel.
• Total Loss of any package lost overboard or dropped whilst loading or unloading the vessel or craft. (Read more on Loading Risks)
• Loss or damage caused by Earthquake, Volcanic Eruption, or Lightning.
• Fire or Explosion.
• Vessel or craft being stranded, grounded, sunk, or capsized.
• Collision or contact of the conveyance with any external object other than water. (Compare ICC B with ICC A & C)

ICC B is a cost-effective and balanced option for cargo that requires protection against water damage without needing the extensive coverage of "All Risks" (ICC A).

Institute Cargo Clause A (ICC A): Comprehensive All Risks Coverage

This type of Insurance is the most complete type of Transport insurance available. Often referred to as "All Risks" marine insurance, this policy is essential for susceptible and damageable goods as it covers any and all instances of theft, loss, or damage to your cargo, except for the clearly excluded risks listed below.

The insurance policy is all-encompassing and covers the following instances of theft, loss, or damage:

• Stranding, Sinking, Burning, or Collision
• Explosion, Water damage, Heavy weather, and Ships sweat or Condensation
• Fault of vessel management, Bursting of boilers, or Latent defects in the hull
• Theft or pilferage, Non-delivery, Leakage or breakage
• Improper stowage by carrier

Exclusions (Damages Which Are Not Covered)

While ICC A offers broad coverage, it will not protect against certain risks. These are the **excluded ones**:

• Deliberate negligence of insured that leads to damage or loss of the insured goods.
• Inherent defect or nature (inherent vice) of the insured goods (e.g., decay, germination, faulty packaging).
• Ordinary deterioration of the insured goods and similar risks such as ordinary weight shortage, corrosion and erosion.
• Loss, damage or expenses due to insufficiency and inappropriate packaging or preparation of the insured goods.
• Loss, damage or expenses due to inherent vice (intentional damage), natural product issues (decay, germination, faulty packaging).
• Un-seaworthiness of vessel, craft or unfitness of vessel, launch, vehicle containers or lift van for safe carriage of the subject matter of insurance. (See Vessel Hull Requirements)
• Rejecting goods entry by the policyholder or prevention of goods entry by the importer country.

War and Nuclear Exclusions

The following catastrophic risks are also typically excluded under the basic ICC A policy:

• Ionizing rays and radioactivity pollution caused by nuclear fuel and wastes.
• Loss, damage or expenses

   This type of Insurance is most complete type of Transport insurance and is mostly used for susceptible and damageable goods, which includes all risks but the excluded ones.

  ·         Exclusions (Damages which have not been covered)

  ·         Ionizer rays and radioactivity pollution caused by nuclear fuel and wastes.

  ·         Rejecting goods entry by the policyholder or prevention of goods entry by the importer country.

  ·         Deliberate negligence of insured that leads to damage or loss of the insured goods.

  ·         Ordinary deterioration of the insured goods and similar risks such as ordinary weight shortage, corrosion and erosion.

  ·         Loss, damage or expenses due to insufficiency and inappropriate packaging or preparation of the insured goods.

  ·         Loss, damage or expenses due to inherent defect or nature of the insured goods.

  ·         Loss, damage or expenses due to application of any type of war weapons, working with nuclear energy, spill or similar interactions of radioactive substance or power.

  ·         Un-seaworthiness of vessel, craft or unfitness of vessel, launch, vehicle containers or lift van for safe carriage of the subject matter of insurance. It should be noted that war risks, strike, chaos and terrorism are among exclusions of the insurance policy and in case an agreement is reached between the insurer and insured, these risks may be covered.

   

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Institute Cargo Clause A (ICC A): Comprehensive All Risks Coverage

This type of Insurance is the most complete type of Transport insurance available. Often referred to as "All Risks" marine insurance, this policy is essential for susceptible and damageable goods as it covers any and all instances of theft, loss, or damage to your cargo, except for the clearly excluded risks listed below.

✅ All-Encompassing Perils Covered

The insurance policy is all-encompassing and provides protection for your cargo against a wide variety of risks, including:

• Stranding, Sinking, Burning, or Collision
• Explosion, Water damage, Heavy weather, and Ships sweat or Condensation
• Fault of vessel management, Bursting of boilers, or Latent defects in the hull
• Theft or pilferage, Non-delivery, Leakage or breakage
• Improper stowage by carrier

❌ General Exclusions (Damages Not Covered)

All risk marine insurance will protect you against all the above scenarios. However, remember that it will not cover certain fundamental risks, which are excluded ones:

• Deliberate negligence of insured that leads to damage or loss of the insured goods.
• Inherent defect or nature (inherent vice) of the insured goods (e.g., decay, germination, faulty packaging).
• Ordinary deterioration of the insured goods and similar risks such as ordinary weight shortage, corrosion and erosion.
• Loss, damage or expenses due to insufficiency and inappropriate packaging or preparation of the insured goods.
• Un-seaworthiness of vessel, craft or unfitness of vessel, launch, vehicle containers or lift van for safe carriage of the subject matter of insurance. (See Vessel Hull Requirements)
• Rejecting goods entry by the policyholder or prevention of goods entry by the importer country.

⚠️ War and Nuclear Exclusions

The following catastrophic risks are also typically excluded under the basic ICC A policy:

• Ionizing rays and radioactivity pollution caused by nuclear fuel and wastes.
• Loss, damage or expenses due to application of any type of war weapons, working with nuclear energy, spill or similar interactions of radioactive substance or power.
• War risks, strike, chaos and terrorism (SRCC) are among exclusions of the insurance policy.

Note on Extended Coverage: You can ask to cover some extra perils such as War and SRCC too. In case an agreement is reached between the insurer and insured, these risks may be covered. For claim assistance, visit our Claim Settlement page.