The Answer in 60 Seconds

The Institute Cargo Clauses (ICC) A, B, and C are the standard coverage forms used in marine cargo insurance globally. ICC (A) is the broadest: an "all risks" basis covering all risks of loss of or damage to the cargo except as excluded. ICC (B) is moderate - covers a defined list of major perils (fire, sinking, stranding, collision, jettison, washing overboard, entry of sea, lake or river water, total loss of a package lost overboard or dropped during loading or unloading, etc.). ICC (C) is the narrowest - covers only catastrophic perils (fire, sinking, stranding, collision, general average sacrifice, jettison). ICC (B) and (C) are restricted covers bought for a lower premium than ICC (A); the coverage difference is substantial. For Singapore SMEs procuring marine cargo cover, the choice depends on commodity value, transit risk profile, and commercial sophistication. A member of the ICC's Incoterms 2020 drafting group describes ICC (A) as more appropriate for manufactured goods and ICC (C) as more appropriate to bulk goods and commodities. The clauses operate within the Marine Insurance Act 1906 framework.

The Sourced Detail

The Institute Cargo Clauses are foundational to global marine cargo insurance. Understanding the three primary forms helps Singapore SMEs in trading, logistics, e-commerce, and any cross-border physical operations make informed coverage decisions.

The historical and architectural framework

The Institute Cargo Clauses originated with the London market institutes - the Institute of London Underwriters and the Lloyd's Underwriters Association. The current standard forms, the 2009 clauses, were produced by the Lloyd's Market Association and the International Underwriting Association through the Joint Cargo Committee; they are revisions of the earlier 1982 versions, which continued in use alongside them; they took effect on 1 January 2009 and are used as the basis for marine cargo cover globally.

The clauses operate within the framework of the Marine Insurance Act 1906 - the statute governing marine insurance contracts in Singapore. The MIA framework provides the architecture; the ICC provide the specific coverage forms.

A cargo policy that names an ICC clause set can carry further clauses that extend, reduce or clarify the cover, so the whole policy is read, not just the clause set named on it.

ICC (A) - All Risks

Coverage scope. Covers all risks of loss of or damage to the insured cargo, except as excluded by Clauses 4 to 7. "All risks" means loss or damage that is fortuitous (by accident or chance), not loss that is inevitable.

The "all risks" architecture. This is the broadest basis. Coverage is defined negatively - covered unless excluded. The burden is on the insurer to establish that an exclusion applies; the insured need only show that the loss or damage was fortuitous, not exactly how it happened.

Standard exclusions. Even ICC (A) has exclusions:

  • Wilful misconduct of the assured
  • Ordinary leakage, ordinary loss in weight or volume
  • Ordinary wear and tear
  • Insufficient or unsuitable packing or preparation, where the packing was done by the assured or their employees or before the insurance attached
  • Inherent vice or nature of subject matter
  • Delay (even if proximate cause is insured peril)
  • Insolvency or financial default of the vessel's owners, managers, charterers or operators, where the assured knew or should have known at loading that it could prevent the voyage
  • Specific war, strikes, terrorism (handled by separate clauses)
  • Specific nuclear / radioactive

Common application. A member of the ICC's Incoterms 2020 drafting group describes ICC (A) as more appropriate for manufactured goods, and Incoterms 2020 makes ICC (A) the default cover a CIP seller must arrange. Theft, pilferage and non-delivery fall within ICC (A) without an added clause.

Premium implication. ICC (A) is the highest-cost option, reflecting the broadest coverage; ICC (B) and (C) are restricted covers bought for a cheaper premium.

ICC (B) - Named Perils (broader)

Coverage scope. Covers loss / damage from a defined list of named perils. The list is reasonably broad but specific:

  • 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 port of distress
  • Earthquake, volcanic eruption, or lightning
  • General average sacrifice
  • Jettison
  • Washing overboard
  • Entry of sea, lake, or river water into vessel, craft, hold, conveyance, container, or place of storage
  • Total loss of any package lost overboard or dropped during loading or unloading

Standard exclusions. The ICC (A) exclusions, plus deliberate damage or destruction by the wrongful act of any person, and no cover for any peril not specifically listed.

Common application. ICC (B) is a restricted cover: an assured who wants cover against serious events only can take it for a lower premium than ICC (A), but must show that a named peril brought about any loss.

Premium implication. ICC (B) is a restricted cover bought for a lower premium than ICC (A).

ICC (C) - Named Perils (narrowest)

Coverage scope. Covers loss / damage from a more limited list of catastrophic perils:

  • 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 port of distress
  • General average sacrifice
  • Jettison

The list is similar to ICC (B) but excludes:

  • Earthquake, volcanic eruption, lightning
  • Washing overboard
  • Water entry
  • Total loss of any package lost overboard

Standard exclusions. Same as ICC (B): the ICC (A) exclusions plus deliberate damage or destruction by the wrongful act of any person, and no cover for any peril not specifically listed.

Common application. A member of the ICC's Incoterms 2020 drafting group describes ICC (C) as dealing essentially with loss or damage from something happening to the carrying vessel, and as more appropriate to bulk goods and commodities. ICC (C) is also the minimum cover a CIF seller must arrange under Incoterms 2020, unless the contract says otherwise.

Premium implication. ICC (C) is a restricted cover bought for a lower premium than ICC (A).

How the three clauses compare in operation

At placement:

Under Incoterms 2020, a CIF seller must arrange at least ICC (C) cover and a CIP seller ICC (A) cover, unless the sale contract agrees a different level; otherwise the basis is agreed with the insurer at placement.

At claim time:

ICC (A): the insured shows that the loss or damage was fortuitous; the burden is then on the insurer to establish an exclusion.

ICC (B) and (C): the burden is on the insured to show that a named peril brought about the loss. For the perils in clause 1.1 the loss need only be "reasonably attributable to" the peril, a looser link than proximate cause; for those in clause 1.2 it must be "caused by" the peril. Claims for losses outside the named perils fail.

Specific cause-determination disputes:

Under ICC (B) and (C), the insured has to show what happened to the cargo and link it to a named peril; a package that goes missing, or arrives wet, with no known cause is not recoverable. Cargo handling damage, water damage from sources other than the entry of sea, lake or river water, theft (not specifically listed), and similar scenarios may not match ICC (B) or (C) covered perils.

Under ICC (A) the insured need not show exactly how the loss or damage occurred, only that it was fortuitous; the insurer avoids the claim only by showing an exclusion applies.

Specific common Singapore SME scenarios

Scenario A: Singapore importer of electronics from China.

Points to weigh: high-value cargo, exposure to theft and handling damage (theft is not a named peril under ICC (B) or (C)), and any cover the customer requires.

Scenario B: Singapore exporter of bulk commodities (e.g. plastics, raw materials).

Points to weigh: lower per-unit value but substantial volumes, and the cover the sale terms require (under Incoterms 2020 a CIF seller must arrange at least ICC (C)).

Scenario C: Singapore manufacturer importing components.

Points to weigh: component damage or loss directly affects production. Delay is excluded under all three clause sets (Clause 4.5), even where an insured risk caused it.

Scenario D: Singapore F&B importer of specialty foods.

Points to weigh: spoilage and contamination. Loss caused by the inherent vice or nature of the goods is excluded under all three clause sets (Clause 4.4), and trade clauses exist for goods such as frozen foods.

Scenario E: Singapore retailer importing fashion / apparel.

Points to weigh: theft and handling damage exposure. Theft is not a named peril under ICC (B) or (C); the Institute Theft, Pilferage and Non-Delivery Clause can be added to cover it.

Scenario F: Singapore exporter to specific developing markets with limited port infrastructure.

Points to weigh: war and strikes risks are excluded under all three clause sets (Clauses 6 and 7); cover for them is added through the Institute War Clauses (Cargo) and Institute Strikes Clauses (Cargo).

Specific war and strikes considerations

The standard ICC clauses (A, B, C) all exclude war and strikes risks. For these, specific separate clauses apply:

Institute War Clauses (Cargo). Cover war risks while the cargo is on an oversea vessel: cover attaches as the goods are loaded and ends on discharge at the final port, or 15 days after the vessel arrives there, whichever is first, with limited extensions such as 15 days at a port of transhipment. Land transit is outside them; an on-carriage by air falls under the Institute War Clauses (Air Cargo).

Institute Strikes Clauses (Cargo). Cover strikes, riots, and civil commotions during the entire transit.

War and strikes cover is added to the ICC core cover by attaching the Institute War Clauses (Cargo) and the Institute Strikes Clauses (Cargo).

Specific commercial context

The choice of ICC clause should consider:

Commodity value and risk profile. Higher value warrants broader cover.

Transit route and method. Specific high-risk routes / methods warrant broader cover.

Customer / supplier requirements. Specific commercial requirements may dictate specific cover.

Incoterms. Under Incoterms 2020 only CIF and CIP require the seller to insure (CIF at ICC (C) level, CIP at ICC (A) level, unless the contract agrees otherwise); under FOB the risk passes to the buyer once the goods are on board, and the rule sets no insurance obligation. The rule agreed drives who makes the choice.

Commercial conventions. Industry conventions vary.

Operational considerations. Specific commercial customers expect specific cover scopes.

Other placement matters

Other matters that come up in marine cargo placements:

  • Specific high-value cargo may have additional specific coverage
  • Specific commodity-specific provisions (food safety, pharma cold chain, electronics, etc.)
  • Specific Singapore Logistics Association Standard Trading Conditions interaction
  • Specific freight forwarder vs cargo owner cover allocation

Operational discipline

For SMEs procuring marine cargo cover:

Specific declaration discipline. Many cargo policies operate on declaration basis (Open Cover) - specific declaration of shipments is operational foundation.

Specific sum insured discipline. Specific cargo values declared accurately.

Specific documentation. Bills of lading, packing lists, commercial invoices, specific origin / destination documentation.

Specific incident reporting. Specific damage / loss reporting at receipt.

Specific subrogation cooperation. See what Castellain v Preston decided.

The 1906 Act framework

The clauses operate within the Marine Insurance Act 1906 framework:

  • Insurable interest (Sections 5-6, with Section 4 voiding contracts without it)
  • Disclosure obligations (Sections 17-19; see what the insured must tell the insurer)
  • Policy form requirements
  • Specific warranty and condition framework
  • Specific abandonment provisions
  • Specific subrogation framework

Specific 1906 Act provisions affect how ICC clauses operate in claim scenarios.

For specific Singapore case law treatment of marine cargo claims, eLitigation provides Supreme Court decisions including specific subrogation cases under the framework discussed in the Castellain v Preston analysis.

Common Mistakes / What Goes Wrong

  1. ICC (C) for standard commercial cargo. Specific coverage gaps.
  2. ICC (B) where the goods face risks it does not name. Theft, rainwater and losses with no known cause fall outside its named perils.
  3. No War / Strikes extensions. Specific exposure gaps.
  4. No commodity-specific provisions where appropriate. operational gaps.
  5. No declaration discipline on Open Cover. Specific compliance and claim risk.
  6. No sum insured discipline. Specific underinsurance.
  7. No documentation. Specific claim-time disputes.
  8. No incident reporting at receipt. Specific recovery and claim risk.
  9. No subrogation cooperation. Specific recovery prejudice.
  10. No renewal review. operational evolution.

What This Means for Your Business

For Singapore SMEs procuring marine cargo cover:

  1. ICC (A) gives the broadest cover. It covers all risks of loss or damage except as excluded, and the insured need not prove exactly how a loss happened.

  2. ICC (B) only for commercial scenarios where appropriate. Specific cost-coverage trade-off.

  3. ICC (C) is the narrowest cover. It lists only major casualties such as fire, stranding, collision, jettison and general average sacrifice.

  4. War and strikes are excluded from all three clause sets. Cover for them is added through the Institute War and Strikes Clauses (Cargo).

  5. For specific commodities, specific provisions.

  6. Specific declaration and documentation discipline. operational foundation.

  7. For high-value or specific industry, specialist broker.

  8. Annual review covering operational evolution.

The choice of ICC clause sets what a claim must prove. Under ICC (A) the insured shows a fortuitous loss and the insurer must prove an exclusion; under ICC (B) and (C) the insured must show that a named peril brought about the loss, and a loss with no known cause is not recoverable.

Questions to Ask Your Adviser

  1. For my commodity profile and routes, which ICC clause is appropriate?
  2. What specific extensions (War / Strikes) are appropriate?
  3. For my Open Cover, what declaration and documentation discipline applies?
  4. For specific commodity-specific provisions, what considerations apply?
  5. As my operations evolve, what cover evolution should I plan for?

Related Information

Published 5 May 2026. Source verified 5 May 2026.