Direct AnswerMarine cargo insurance covers physical loss or damage to goods during transit by sea, air, or multimodal. The Institute Cargo Clauses define scope: Clause A is the broadest "all risks" cover, B covers named perils, and C is the narrowest. Standard policies exclude inherent vice, inadequate packaging, delay, and war/strikes unless endorsed. A successful claim needs timely notice, a survey report, and original shipping documents.
Key Takeaways
- ICC A/B/C differ sharply — A = all risks, C = named perils only.
- Covers transit perils: sinking, collision, fire, theft, jettison, general average.
- Excludes inherent vice, poor packing, delay, and war/strikes unless added.
- Insure to value +10% (e.g., CIF value × 110%) or an agreed value.
- Claims require survey, photos, original docs, and prompt notice.
- General Average can cost you even if your cargo is undamaged.
- Carrier liability is limited — cargo insurance fills the gap for valuable goods.
Institute Cargo Clauses — A vs B vs C
| Coverage aspect |
Clause A (all risks) |
Clause B (named perils) |
Clause C (basic) |
| Fire / explosion |
✅ |
✅ |
✅ |
| Vessel collision / stranding |
✅ |
✅ |
✅ |
| Sinking / capsizing |
✅ |
✅ |
✅ |
| Theft / pilferage |
✅ |
❌ |
❌ |
| Droppage / breakage (during handling) |
✅ |
❌ |
❌ |
| Fresh-water / rain damage |
✅ |
✅ |
❌ |
| General average / salvage |
✅ |
✅ |
✅ |
| All other external accidents |
✅ |
❌ |
❌ |
Clause A is recommended for machinery, electronics, and fragile goods. C is rarely enough for high-value cargo.
Decision Framework: Insure Correctly
- Value the cargo at invoice + freight + margin.
- Choose the clause — A for valuable/fragile, B/C only for low-risk bulk.
- Confirm transit scope (warehouse-to-warehouse vs port-to-port).
- Add war / SRCC endorsement if the route is risky.
- Insure to CIF +10% or an agreed value in writing.
- Document packing & pre-shipment condition with photos.
- Know the claim procedure before the shipment moves.
Common Mistakes Importers Make
- Assuming carrier liability is enough — it is strictly limited by weight or SDR.
- Buying the cheapest C clause for valuable or fragile cargo.
- Not documenting pre-shipment condition — weakens any claim.
- Late claim notification beyond the policy window.
- Missing the survey / surveyor report at the loss location.
- Underinsuring to save premium, then absorbing the gap.
- Assuming war/political risk is covered by default — it is not.
- Not understanding General Average and its joint-liability impact.
FAQ — 12 Questions Overseas Buyers Actually Ask
Does shipping insurance cover damaged cargo?
Yes, if the damage arises from a covered transit peril and is not excluded (e.g., poor packing). Clause A covers the broadest range of damage.What are Institute Cargo Clauses A/B/C?
They are standard cargo insurance wordings. A = all risks (widest), B = named perils, C = basic named perils (narrowest).Is "all risks" truly all risks?
No. Even Clause A excludes inherent vice, inadequate packaging, delay, and ordinary leakage/wear — plus war/strikes unless endorsed.What is typically excluded?
Inherent vice, insufficient packing, delay, wilful misconduct, and war/strikes (unless added). Read the policy's exclusions carefully.How much should I insure for?
Usually CIF value × 110%, or an agreed value that reflects replacement plus freight and margin.Who pays for cargo insurance?
Depends on Incoterm: CIF/CFR seller arranges (minimum), but buyer bears risk; under most other terms the buyer insures.What documents do I need for a claim?
Original policy, commercial invoice, packing list, bill of lading/air waybill, survey/report, photos, and a timely written notice.How long do I have to file a claim?
Notify the insurer/surveyor promptly — often within days of discovering loss and within the policy's time limit. Do not delay.What is General Average?
When a ship deliberately sacrifices cargo or incurs extraordinary costs for the common safety, all cargo interests share the loss proportionally — even undamaged cargo must contribute.Does cargo insurance cover delay?
Generally no. Pure delay or loss of market is excluded even under Clause A.Is war or strike damage covered?
Not under standard A/B/C unless you add a war/SRCC endorsement. Consider it for high-risk routes.Carrier liability vs cargo insurance — what's the difference?
Carrier liability is limited and fault-based; cargo insurance pays for covered physical loss regardless of carrier fault (subject to exclusions).
Sources & References
- Institute Cargo Clauses (A/B/C) — LMA/IUA standard wordings.
- Incoterms 2020 — allocation of insurance responsibility.
- York-Antwerp Rules — General Average principles.
Author: Batong Global Risk & Insurance Team — Batong Global (batongls.com) arranges ICC A/B/C marine and air cargo insurance with clear claims support for China-origin shipments. （建议替换具名专家 + 经验简介。） ---
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