What are the differences between Institute Cargo Clauses A and Institute Cargo Clauses C?

There are 3 types of marine cargo insurance policies available for international transactions.

These marine cargo insurance policy types are known as Institute Cargo Clauses (A), Institute Cargo Clauses (B) and Institute Cargo Clauses (C).

Each marine cargo policy type covers different amount of risks, whereas Institute Cargo Clauses (C) has the minimum coverage and Institute Cargo Clauses (A), also known as all risks, has the maximum coverage.



Today I would like to mention the differences between Institute Cargo Clauses (A) and Institute Cargo Clauses (C).

Institute Cargo Clauses (C):
Institute Cargo Clauses (C) covers very limited risks most of them which must be happen during the carriage in forms of accidents. Below you can find the details of the risk coverage of this type of insurance policy.

Loss of or damage to the subject-matter insured reasonably attributable to

  • 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
Loss of or damage to the subject-matter insured caused by
  • general average sacrifice 
  • jettison
DefinitionsGeneral Average Sacrifice: There is a general average act when, and only when, any extraordinary sacrifice or expenditure is intentionally and reasonably made or incurred for the common safety for the purpose of preserving from peril the property involved in a common maritime adventure.
Jettison:The intentional throwing overboard of part of the cargo or some piece of the ship in order to save the ship or its cargo.
Institute Cargo Clauses (A):

Institute Cargo Clauses (A) covers maximum risks as a result it is also known as All Risks cargo insurance policy. Below you can find the details of the risk coverage of this type of insurance policy.

Insurance Cargo Clauses (A) covers all the risks of loss of or damage to the goods except following conditions:

Risks that have been caused by following reasons will not be covered under Insurance Cargo Clauses (A)

All risks cargo insurance policy will not be covering loss or damages arising from the following reasons:

General Exclusion Clauses
  • Loss damage or expense attributable to wilful misconduct of the Assured 
  • Ordinary leakage, ordinary loss in weight or volume, or ordinary wear and tear of the subject-matter insured 
  • Loss damage or expense caused by insufficiency or unsuitability of packing or preparation of the subject matter insured to withstand the ordinary incidents of the insured transit where such packing or preparation is carried out by the Assured or their employees or prior to the attachment of this insurance (for the purpose of these Clauses "packing" shall be deemed to include stowage in a container and "employees" shall not include independent contractors) 
  • Loss damage or expense caused by inherent vice or nature of the subject-matter insured 
  • Loss, damage or expense caused by delay, even though the delay be caused by a risk insured against 
  • Loss, damage or expense caused by insolvency or financial default of the owners, managers, charterers or operators of the vessel where, at the time of loading of the subject-matter insured on board the vessel, the Assured are aware, or in the ordinary course of business should be aware, that such insolvency or financial default could prevent the normal prosecution of the voyage. This exclusion shall not apply where the contract of insurance has been assigned to the party claiming hereunder who has bought or agreed to buy the subject-matter insured in good faith under a binding contract 
  • Loss, damage or expense directly or indirectly caused by or arising from the use of any weapon or device employing atomic or nuclear fission and/or fusion or other like reaction or radioactive force or matter.
Exclusion Clauses Covering Insufficiency of the Vessel or Containers etc.
  • Loss damage or expense arising from unseaworthiness of vessel or craft or unfitness of vessel or craft for the safe carriage of the subject-matter insured, where the Assured are privy to such unseaworthiness or unfitness, at the time the subject-matter insured is loaded therein 
  • Loss damage or expense arising from unfitness of container or conveyance for the safe carriage of the subject-matter insured, where loading therein or thereon is carried out prior to attachment of this insurance or by the Assured or their employees and they are privy to such unfitness at the time of loading.
Exclusion Clauses Covering War related Risks
  • Loss damage or expense caused by war civil war revolution rebellion insurrection, or civil strife arising therefrom, or any hostile act by or against a belligerent power. 
  • Loss damage or expense caused by capture seizure arrest restraint or detainment (piracy excepted), and the consequences thereof or any attempt thereat. 
  • Loss damage or expense caused by derelict mines, torpedoes, bombs or other derelict weapons of war.
Exclusion Clauses Covering Strikes, Riots and Civil Commotions Risks
  • Loss damage or expense caused by strikers, locked-out workmen, or persons taking part in labour disturbances, riots or civil commotions. 
  • Loss damage or expense resulting from strikes, lock-outs, labour disturbances, riots or civil commotions.
Differences Between Institute Cargo Clauses (A) and Institute Cargo Clauses (C):
  • Institute Cargo Clauses (C) covers very limited risks as a result it is called as a minimum cover cargo insurance policy. 
  • Institute Cargo Clauses (A) covers wide range of risks as a result it is called as a "All Risks" cargo insurance policy. 
  • Insurance premium, which should be paid to the insurance company in order to get the insurance policy issued, would be substantially different between these two policy types. 
  • Institute Cargo Clauses (C) is the cargo insurance policy type which is requested by the Incoterms 2010 rules
  • Institute Cargo Clauses (A) is the cargo insurance policy type which is requested by the issuing banks under letter of credit transactions.

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