What are the Institute Cargo Clauses
The Institute Cargo Clauses are a set of standard policy wordings drafted by the Institute of London Underwriters and currently maintained by the Lloyd's Market Association (LMA) together with the International Underwriting Association of London (IUA). They are the global reference for marine cargo insurance and are referenced by virtually every insurer operating in Latin America, Europe, Asia and North America, even when the policy itself is issued in Spanish, Portuguese or local language.
The most widely used version today is the 2009 revision (clauses CL382, CL383 and CL384, with effective date 1 January 2009), which replaced the 1982 wording in response to concerns about ambiguous terminology, the treatment of terrorism, and modern container logistics. The 2009 revision modernised the "transit clause" (now coverage attaches when the cargo is first moved within the warehouse for loading) and clarified several exclusions. There are three levels of cover, lettered (A), (B) and (C), each one with a progressively narrower scope of insured perils. The same letter system also applies to specialised wordings such as the Institute Frozen Food Clauses, the Institute Coal Clauses and the Institute Bulk Oil Clauses, but for general dry cargo the A/B/C trio is the standard.
ICC (A): All Risks coverage
ICC (A) is the broadest standard cover available in the marine cargo market and is colloquially referred to as the "All Risks" clause, although the modern wording carefully avoids that phrase. Instead of listing what is covered, it covers any physical loss or damage to the insured cargo except for a closed list of exclusions (war, strikes, wilful misconduct, ordinary wear and tear, insufficient packing, inherent vice, delay and unseaworthiness, among others).
In practical terms, ICC (A) responds to events such as theft, pilferage, partial non-delivery, breakage, scratching, denting, contamination, rainwater damage, fresh-water damage, oil contamination from neighbouring cargo, and a long list of "concealed" perils that ICC (B) and (C) simply do not contemplate. It is the standard recommendation for any cargo with a unit value above a few thousand dollars, for any consolidated (LCL) shipment, and for any high-handling route. The premium difference compared to ICC (B) rarely exceeds 0.10-0.20 percentage points of the insured value, which is almost always a worthwhile trade.
ICC (B): Named perils, intermediate
ICC (B) is a named-perils wording: the insurer only pays if the cause of the loss is one of the events listed in clause 1. The covered perils include fire or explosion, vessel or craft being stranded, grounded, sunk or capsized, overturning or derailment of land conveyance, collision or contact of the vessel with any external object (other than water), discharge of cargo at a port of distress, earthquake, volcanic eruption or lightning, general average sacrifice, jettison and washing overboard, and entry of sea, lake or river water into the vessel, container or place of storage.
The key practical limitation of ICC (B) is that theft, pilferage and partial non-delivery are not covered, and "ordinary" damage from poor stowage, handling or condensation is also outside its scope. ICC (B) makes sense for medium-value bulk cargo, commodities transported in big bags, or shipments where the operational risk profile is dominated by catastrophic vessel events rather than handling, and where the buyer is willing to accept the higher deductible structure typical of named-perils policies in exchange for a marginally lower premium.
ICC (C): Named perils, basic
ICC (C) is the most restrictive of the three clauses and the cheapest. It is essentially a catastrophic-only wording: it covers fire or explosion, the vessel or craft being stranded, grounded, sunk or capsized, overturning or derailment of land conveyance, collision of the vessel with an external object, discharge of cargo at a port of distress, general average sacrifice and jettison. Notably it excludes earthquake, volcanic eruption, lightning, washing overboard and water entry into the container or hold, all of which are covered by ICC (B).
In reality, ICC (C) is used almost exclusively for low-value bulk commodities (coal, scrap metal, grains, fertilisers, certain minerals) where the cargo is essentially uninsurable for handling-type losses and where the only meaningful risk worth transferring is the catastrophic loss of the vessel itself. For containerised general cargo, ICC (C) is almost never the right choice — even modest claims for theft, water ingress or partial loss will be rejected, and the premium saving versus ICC (B) is typically negligible.
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Get a quote →Side-by-side comparison: A vs B vs C
The following table summarises the practical scope of each clause based on the 2009 revision. Use it as a quick reference when negotiating a quote with your broker or freight forwarder:
| Variable | ICC (A) | ICC (B) | ICC (C) |
|---|---|---|---|
| Coverage scope | All risks (except exclusions) | Named perils, intermediate | Named perils, basic |
| Particular average | Covered without franchise | Covered for listed perils | Covered for listed perils |
| Theft and pilferage | Covered | Not covered | Not covered |
| Rain / fresh-water damage | Covered | Not covered | Not covered |
| Sea water / container wetting | Covered | Covered | Not covered |
| Jettison (cargo thrown overboard) | Covered | Covered | Covered |
| Fire and explosion | Covered | Covered | Covered |
| Vessel sinking / stranding | Covered | Covered | Covered |
| Relative cost (premium index) | 100 (reference) | 70-85 | 55-75 |
| Recommended for | High-value, LCL, general cargo | Medium-value bulk, big bags | Low-value bulk commodities only |
How to choose by cargo type
The decision is rarely about price alone: it is about matching the clause to the dominant risk profile of your cargo and your route. The following matrix reflects the consensus recommendation from underwriters operating on the Asia → Latin America, US → Latin America and Europe → Latin America lanes:
| Cargo type | Recommended ICC | Reason |
|---|---|---|
| Electronics, mobile phones, IT equipment | ICC (A) | High theft and handling exposure; concealed damage common |
| Perishables (frozen, chilled, fresh produce) | ICC (A) + Institute Frozen Food Clauses | Temperature deviation and contamination need broad cover |
| Industrial machinery and capital equipment | ICC (A) | High unit value; scratching, denting and rust frequent on long voyages |
| Commodities in bulk (coal, grain, fertilisers, scrap) | ICC (C), sometimes (B) | Catastrophic-only risk profile; handling damage already priced into cargo value |
| Project cargo, oversized, breakbulk | ICC (A) + War & Strikes | Multiple modes, extra handling, frequent transhipments |
| Used vehicles, second-hand machinery | ICC (B) typically; (A) with restrictions | Many insurers refuse ICC (A) on used goods due to pre-existing damage |
"If your cargo is containerised general merchandise above USD 5,000 in value, the default answer is always ICC (A). You only step down to (B) or (C) when the cargo nature genuinely justifies a named-perils approach — bulk commodities, scrap, or low-value uniform product where handling losses are economically immaterial."
Exclusions and additional clauses (SRCC, War, TPND)
All three ICC wordings share a common list of exclusions in clauses 4, 5, 6 and 7: wilful misconduct of the insured, ordinary leakage, ordinary loss in weight or volume, ordinary wear and tear, insufficient or unsuitable packing, inherent vice or nature of the subject matter, delay (even if caused by an insured peril), insolvency or financial default of the carrier, unseaworthiness of the vessel where the insured had knowledge, and — critically — war, strikes, riots and civil commotions are excluded as standard from all three clauses. These last two perils are restored to the policy by purchasing two additional standard wordings:
- Institute War Clauses (Cargo): restores cover for war, civil war, revolution, rebellion, insurrection, hostile act by or against a belligerent power, derelict mines, torpedoes, bombs and other derelict weapons of war. Premium varies dynamically and is reviewed weekly by the Joint War Committee (JWC) in London for sensitive areas — currently the Red Sea, the Strait of Hormuz, the Black Sea and parts of West Africa.
- Institute Strikes Clauses (Cargo) – SRCC: restores cover for loss or damage caused by strikers, locked-out workmen, persons taking part in labour disturbances, riots or civil commotions, as well as by any terrorist or person acting from a political, ideological or religious motive. SRCC is essentially a mandatory add-on for any route touching ports with a history of social conflict.
- TPND (Theft, Pilferage and Non-Delivery): a sub-cover automatically embedded in ICC (A) but available as an extension for ICC (B) and (C) policies. When operating under named-perils wordings, explicitly adding TPND closes the most frequent claim gap for containerised consolidated cargo, especially on the LCL deconsolidation leg in Latin American hubs.
Our digital platform powered by Cargo Insure Online (CIO) automatically configures the appropriate combination of ICC (A)/(B)/(C), War, SRCC and TPND based on the route, the cargo description and the Incoterm declared at the moment of quoting, so the certificate you receive is already calibrated for the real risk profile of your shipment.
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Get a quote →Frequently asked questions
Is ICC (A) really the same as "All Risks"?
In practice yes, but the 2009 wording deliberately avoids the phrase "All Risks" because it gave rise to courtroom disputes about the literal meaning of the word "all". Technically, ICC (A) covers any loss or damage except those listed in the exclusions (clauses 4, 5, 6 and 7). The result is functionally an all-risks policy, but the burden of proof in case of a claim sits on the insurer to demonstrate that the loss falls within an exclusion — a key procedural advantage for the insured compared to ICC (B) and (C).
Can I buy ICC (B) or (C) and add theft as an extension?
Yes. Most insurers will add a TPND (Theft, Pilferage and Non-Delivery) extension to an ICC (B) or (C) policy for an additional premium of roughly 0.05-0.15% of the insured value. However, the combined cost is usually higher than simply purchasing ICC (A) outright, and the cover is still narrower because ICC (A) also includes a long list of "concealed" perils (contamination, scratching, denting from third-party cargo) that no TPND extension restores.
Does ICC (A) cover war and strikes by default?
No. War, strikes, riots and civil commotions are excluded from all three ICC wordings — (A), (B) and (C). They must be restored through the separate Institute War Clauses (Cargo) and Institute Strikes Clauses (Cargo). Most cargo policies sold in Latin America for international routes automatically include both as standard, but you should always verify in the certificate that the "War" and "SRCC" line items are present and that the route is within the geographical scope.
What is the practical difference between the 1982 and the 2009 revisions?
The 2009 revision modernised the "transit clause" (cover now attaches when the cargo is first moved within the warehouse for the immediate purpose of loading, rather than the older "leaves the warehouse" trigger), clarified the exclusion for unseaworthiness so that only the insured's actual knowledge triggers it, refined the terrorism wording, and updated the duration clause for situations where the voyage is terminated short of destination. For practical purposes, any policy you buy today should explicitly reference the 2009 wording — if your certificate still says CL252/CL253/CL254 (the 1982 codes), ask the insurer to reissue under CL382/CL383/CL384.