Marine Cargo Insurance
Marine Cargo Insurance is a policy that protects goods, or cargo, against loss, damage, or theft during transit by sea, air, rail, or road. Unlike Mar...
Marine Cargo Insurance
Marine Cargo Insurance is a policy that protects goods, or cargo, against loss, damage, or theft during transit by sea, air, rail, or road. Unlike Marine Hull Insurance, which covers the vessel itself, cargo insurance is purchased by the cargo owner (exporter, importer, or business) to shield them from the significant financial risks of trade across the global supply chain, providing coverage from the moment goods leave the seller's warehouse until they reach the final destination.
Key Coverage Types (Institute Cargo Clauses)
Coverage is standardized internationally by the Institute Cargo Clauses (ICC), which are categorized by the scope of protection:
ICC (C) - Restricted Coverage
Provides the most restricted and least expensive coverage. It's a "named perils" policy covering only major catastrophes like fire, explosion, vessel stranding/sinking, collision, and general average sacrifice.
ICC (B) - Moderate Coverage
Offers moderate coverage, extending ICC (C) to include risks like earthquake, volcanic eruption, washing overboard, and the entry of sea, lake, or river water into the vessel or container.
ICC (A) - All Risks Coverage
Provides the widest and most comprehensive cover, often referred to as "All Risks" insurance. It covers all risks of loss or damage, except for those specifically excluded in the policy wording.
Common Exclusions
Even the broadest ICC (A) clause does not cover losses resulting from:
- Willful Misconduct of the insured (intentional damage).
- Inherent Vice of the cargo (e.g., natural decay of perishable goods, or an item's natural tendency to self-destruct).
- Insufficiency or Unsuitability of Packing performed by the insured.
- Ordinary Leakage, Loss in Weight or Volume, or normal wear and tear.
- Loss due to Delay or loss of market value (i.e., consequential losses).
- Insolvency or Financial Default of the vessel's owners or operators.
Your Questions,
Answered
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What is Marine Cargo Insurance?
It covers loss or damage to goods during transit.
What modes are covered?
Sea, air, road, and rail.
Who can buy it?
Importers, exporters, traders.
What risks are covered?
Theft, damage, accidents, and natural calamities.
What are Institute Cargo Clauses?
Standard coverage terms (A, B, C).
Does it cover delay?
No.
What is declared value?
Value of goods insured.
What is open policy?
Covers multiple shipments.
How is premium calculated?
Based on cargo type and transit risk.
How to claim?
Notify insurer and surveyor immediately.