Institute cargo clauses come embedded in a marine insurance policy
which covers cargo in-transit. These clauses are there to specify what
kind of items in the cargo is covered in case of any loss or damage to
the shipment. It is interesting to note; institute cargo clause can
cover anything from the cargo to the container that holds its value
along with the transport mode which is used to ship the items.
Mainly,
there are three basic sets of institute cargo clauses; A, B, C. Your
coverage is directly related to your insurance premium. It means, the
higher the marine insurance premium you pay; the more would be coverage
you get.
Here you can find different between A, B and C cargo clauses in one table:
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RISKS
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Institute Cargo Clauses
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(Proximate Cause)
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A
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B
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C
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Stranding, Grounding, Sinking or Capsizing
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Yes
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Yes*
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Yes*
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Overturning or Derailment of Land Conveyance
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Yes
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Yes*
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Yes*
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Collision of Ship or Craft with another Ship or Craft
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Yes
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Yes*
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Yes*
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Contact of Ship, Craft or Conveyance with anything other than Ship or Craft (excludes Water but not Ice)
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Yes
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Yes*
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Yes*
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Discharge of Cargo at Port of Distress
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Yes
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Yes*
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Yes*
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Fire or Explosion
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Yes
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Yes*
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Yes*
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Earthquake, Volcanic Eruption or Lightning
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Yes
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Yes*
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No
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Malicious Damage
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Yes
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No**
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No**
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Theft/Pilferage
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Yes
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No
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No
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General Average Sacrifice
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Yes
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Yes
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Yes
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Jettison
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Yes
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Yes
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Yes
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Washing Overboard (deck cargo)
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Yes
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Yes
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No
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War Risks (except Piracy)
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No
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No
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No
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Takings at Sea (except War Risks)
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Yes
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No
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No
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Seawater entering Ship, Craft, Hold, Conveyance Container Lift Van or Place of Storage
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Yes
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Yes
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No
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River or Lake Water entering same
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Yes
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Yes
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No
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Loss overboard during Loading/Discharge (total loss only)
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n/a
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Yes
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No
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Any risks of physical loss or damage not specified
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Yes
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No
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No
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RISKS
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Institute Cargo Clauses
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(Proximate Cause)
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A
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B
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C
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* Common Clause 1.1 of the B and C Clauses requires the loss or damage to be reasonably attributable to the cause of damage
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** Can be bought back
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Clauses A are sometimes referred to as "Full Cover," Clauses B are sometimes referred to as "With Particular Average," and Clauses C as "Free of Particular Average." For a definition of "Particular Average"
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