What cargo insurance actually covers
Nearly all cargo cover in the world is written on one of three clause sets. They are not tiers of service — they are different structures. (A) covers everything except a list of exclusions. (B) and (C) cover only what they name, and what they leave out is what surprises people at claim time.
Written the inclusive way round: everything is covered unless an exclusion applies. You do not have to match your loss to a listed peril — the insurer has to point at an exclusion.
Most manufactured, branded, fragile or theft-attractive cargo, and anything where a buyer, bank or letter of credit expects all-risks cover.
A closed list: your loss is covered only if it matches a named peril. Damage nobody can attribute to a listed cause is not covered, however genuine it is.
Cargo that is robust and not theft-attractive but does have water exposure — packaged bulk, resin, fertilizer, some steel.
Catastrophe cover. It responds when something happens to the ship, aircraft or truck, not when something happens to your cargo.
Low-value bulk where the only loss worth insuring is the total one — and where the buyer accepts it. Rarely appropriate for containerised manufactured goods.
Peril by peril
Rows marked often assumed covered are the ones that generate declined claims.
| Peril | ICC (A) | ICC (B) | ICC (C) |
|---|---|---|---|
| Fire or explosion On board, in the terminal or on the trailer | ● | ● | ● |
| Vessel sinking, stranding or capsizing The classic major casualty | ● | ● | ● |
| Collision, overturning or derailment Of the vessel, truck or railcar carrying the goods | ● | ● | ● |
| General average contribution Your share when cargo is sacrificed to save the voyage | ● | ● | ● |
| Jettison Cargo deliberately thrown overboard | ● | ● | ● |
| Washing overboard Cargo taken by the sea rather than thrown | ● | ● | ○ |
| Sea, lake or river water entering the container Ingress into the vessel, hold or container | ● | ● | ○ |
| Earthquake, volcanic eruption or lightning Natural catastrophe at rest or in transit | ● | ● | ○ |
| Total loss of a package during loading or discharge Dropped over the side | ● | ● | ○ |
| Theft and pilferage Whole consignments and part-package losses | ● | ○ | ○ |
| Non-delivery of a whole package The container arrives, a package does not | ● | ○ | ○ |
| Ordinary handling damage and breakage Forklift damage, crushing, dropped cases | ● | ○ | ○ |
| Rainwater and freshwater damage Not vessel ingress — an open door, a leaking roof | ● | ○ | ○ |
| Mysterious disappearance Missing with no evidence of how | ◐ | ○ | ○ |
| War, seizure and political risk Excluded as standard at every level | ○ | ○ | ○ |
| Strikes, riots and civil commotion Excluded as standard at every level | ○ | ○ | ○ |
| Delay and consequential loss of market Excluded even when an insured peril caused the delay | ○ | ○ | ○ |
| Insufficient or unsuitable packing Where the packing, not the transit, caused the loss | ○ | ○ | ○ |
| Inherent vice and natural decay The goods failing because of what they are | ○ | ○ | ○ |
| Ordinary leakage, wear and loss in weight Normal transit shrinkage | ○ | ○ | ○ |
| Temperature deviation in a reefer Conditioned or excluded as standard | ◐ | ○ | ○ |
| Insolvency of the carrier Where the shipowner or operator fails | ○ | ○ | ○ |
This table summarises the clause families in plain language for comparison. It is not the wording, and insurers issue amended and market-specific versions. The certificate, policy schedule and attached clauses issued to you govern your cover and prevail over anything on this page.
The five exclusions that decide real claims
Even under (A), where everything is covered unless excluded, these are the exclusions underwriters actually reach for.
Insufficient packing
The single most argued exclusion. If a case was not fit for the transit it was booked for, the loss is treated as a packing failure rather than a transit peril — and the fact the goods were fine when they left your dock is not the test. Photograph packing before dispatch; it is the cheapest claims evidence there is.
Inherent vice
Goods failing because of their own nature: produce ripening, chemicals separating, timber staining. Underwriters draw the line at whether an outside event intervened. Fresh produce claims turn on this line more often than on anything else.
Delay
Excluded at every clause level, even where an insured peril caused the delay. If a vessel strands and your cargo arrives four weeks late but undamaged, the stranding was covered and your loss is not. Rejection and loss-of-market cover exist precisely because of this gap.
War and strikes
Both are carved out of the base clauses and sold back as separate Institute clauses. Note what the war cover does not do: it attaches while the cargo is waterborne or airborne, so inland transit before loading and after discharge is not in it.
Wilful misconduct
Deliberate acts by the insured are never covered — and misstating cargo value or condition to get a cheaper rate can be treated as a breach of the duty of fair presentation, which puts the whole policy at risk, not just the one claim.
Buying back what the clauses exclude
War & political risk
+0.035/$100The base clauses exclude war. Bought back through the Institute War Clauses, which attach while the cargo is waterborne or airborne — not during inland transit.
Strikes, riots & civil commotion
+0.025/$100Also excluded as standard. Covers damage from strikers and labour disturbance — but not the delay or lost market that a strike usually causes.
Temperature deviation
+0.180/$100Reefer breakdown and cold-chain excursion are excluded or heavily conditioned as standard. Usually requires a functioning datalogger and a stated deviation threshold.
Only meaningful on temperature-controlled cargo.
Rejection cover
+0.120/$100Pays when an authority rejects a technically sound consignment at the border. Common for food and pharma, where the cargo is the loss even though nothing broke.
The slice of every claim you carry
A deductible is deducted from each claim, so a larger one is a genuine trade: a lower rate in exchange for absorbing small losses yourself. Watch how it interacts with your loss pattern — if your claims are typically a pallet, a $2,500 deductible can mean a policy that never pays.
See it on your own cargo
The comparison is more useful with your commodity, value and route in it — the quote page prices all three clause levels and the whole deductible ladder against one shipment.
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Each of these restates a published instrument and links its source.