Marine Cargo Insurance: ICC (A), (B), (C) Compared So You Don’t Lose Everything

The direct answer: most international cargo insurance contracts in the world — including policies Vietnamese insurers issue for export cargo — are built on the London market’s standard wordings: the Institute Cargo Clauses (ICC). The three tiers (A), (B) and (C) differ not only in premium but in insurance PHILOSOPHY: (A) is “all risks” — covering every loss except listed exclusions; (B) and (C) are “named perils” — covering only losses caused by the risks expressly named. Misunderstanding this difference is a classic reason cargo owners believe they are fully covered, then face a declined claim when goods arrive damaged. This article compares the three tiers in detail and guides clause selection by cargo type.

(A) “all risks” vs (B)/(C) “named perils”: the core distinction

ICC (A) — CL382 — covers “all risks of loss or damage” to the goods in transit, except exclusions stated in the wording. The key legal consequence: under (A) the burden of proof reverses — the cargo owner need only prove loss during the insured period, while the insurer must prove the loss falls within an exclusion to decline. ICC (B) — CL383 — and ICC (C) — CL384 — are the opposite: the owner must prove the loss was caused by EXACTLY one of the named perils. The (B) peril list is much wider than (C): (B) covers fire and explosion; stranding, sinking, capsizing; overturning/derailment of land conveyance; collision; discharge at a port of distress; general average; jettison; and — the decisive differentiators — earthquake, volcanic eruption, lightning; washing overboard; entry of sea, lake or river water. ICC (C) covers only the basic catastrophe set: fire, explosion; stranding, sinking, capsizing; collision; discharge at port of distress; general average; jettison — with NO earthquake, washing overboard or water ingress. All three EXCLUDE theft and pilferage (only (A) covers them) and rough-handling damage (only (A) covers it).

Common exclusions and add-ons you must buy separately

All three tiers share a common exclusion list cargo owners often skip: wilful misconduct of the insured; ordinary leakage, wear and tear; insufficient packing or unfit containers; inherent vice (rot, rust, spontaneous combustion and the like); loss caused by delay however arising; insolvency of the carrier. Two major risk groups need separate add-on clauses: war risks (Institute War Clauses) and strikes, terrorism and civil commotion (Institute Strikes Clauses) — no longer “luxury options” given Red Sea and other tense shipping lanes today. One more technical point: cover follows the “warehouse-to-warehouse” principle — attaching when goods leave the named warehouse to commence transit and ending under specific rules (usually on delivery at the destination warehouse or after a set number of storage days); cargo sitting too long at a transhipment port may fall outside cover.

How to choose: a matrix by cargo value and route

The golden rule: pick the tier by cargo VALUE and FRAGILITY, not by premium-saving habit. ICC (A): mandatory for high-value, fragile, theft-prone goods — electronics, precision machinery, branded goods, pharmaceuticals; the highest premium but the only tier covering theft, rough handling and “all other non-excluded causes”. ICC (B): suits ordinary goods and semi-finished products — raw materials, containerised textiles; a balance of premium and scope, especially valuable on long sea routes in storm seasons. ICC (C): only for robust low-value bulk — ores, coal, scrap steel; cheapest, but when waves sweep cargo overboard or water floods the hold, the owner bears it alone. Contract note: under Incoterms 2020, a CIF seller’s minimum insurance duty requires only (C) level — buyers wanting better protection should buy a top-up or negotiate (A)/(B) into the contract. On claims: under (A), document the loss and let the insurer prove an exclusion; under (B)/(C), gather evidence tying the loss to exactly a named peril (survey reports, vessel logs, loading/discharge photos).

This article has been quality-reviewed by the FLAW AI Legal Council