The Answer in 60 Seconds

Institute Cargo Clauses (C) 1/1/2009 is the most restrictive of the three Institute Cargo Clauses (A, B, C) - it covers a defined list of named perils only, not "all risks." Per the published ICC C 1/1/2009 wording (Lloyd's Market Association and International Underwriting Association), the perils covered are limited to fire/explosion, vessel grounded/stranded/sunk/capsized, overturning or derailment of land conveyance, collision or contact of vessel, craft or conveyance with any external object other than water, discharge at port of distress, general average sacrifice, and jettison. To file a claim under ICC C, you must show that one of these named perils brought about the loss. For most of them the loss need only be "reasonably attributable to" the peril, which can be a looser link than proximate cause; for general average sacrifice and jettison it must be "caused by" the peril. Theft, washing overboard, water entry, and earthquake/lightning are not covered under ICC C (they are covered under ICC A and partially under ICC B).

The Step-by-Step

ICC C is the narrowest of the three Institute Cargo Clauses; like ICC B, it is a restricted cover bought for a lower premium than ICC A. A member of the International Chamber of Commerce's Incoterms 2020 drafting group describes it as more appropriate to bulk goods and commodities, and under Incoterms 2020 it is the minimum cover a CIF seller must arrange. The claim mechanics are similar to ICC A - but the coverage threshold is higher because you must prove a named peril caused the loss.

What ICC C 1/1/2009 actually covers

Per the Institute Cargo Clauses (C) 1/1/2009, published by the Lloyd's Market Association and the International Underwriting Association, Clause 1.1:

This insurance covers, except as excluded by the provisions of Clauses 4, 5, 6 and 7 below, loss of or damage to the subject-matter insured reasonably attributable to:

  • 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 a port of distress

Clause 1.2 covers loss of or damage to the subject-matter insured caused by:

  • General average sacrifice
  • Jettison

That's the entire list. Notably absent (compared to ICC A and B):

  • Earthquake, volcanic eruption, lightning
  • Washing overboard
  • Entry of sea, lake, or river water into the vessel/craft/hold/container
  • Total loss of any package lost overboard or dropped during loading/unloading
  • Theft (covered under ICC A only - even ICC B does not include theft as standard)
  • Malicious damage (covered under ICC A only)
  • Hooks/sling damage during loading

Step 1 - Confirm the wording is ICC C

Pull the marine cargo certificate or the open-cover declaration. The certificate should specify the wording: ICC A, ICC B, or ICC C (with the date - 1/1/2009 is the current standard; older certificates may reference 1/1/1982 wordings, which differ in some details).

If the certificate references ICC A or ICC B, this article is the wrong reference: the broader cover applies. Under ICC A the insured need only show that the loss was fortuitous; under ICC B, as under ICC C, the insured must still show that a named peril brought about the loss.

Step 2: Identify the cause of the loss

ICC C requires you 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, which, the Lloyd's cargo claims manual says, can be a far looser link than proximate cause; for general average sacrifice and jettison (Clause 1.2) it must be "caused by" the peril. For the default rule, which applies unless the policy otherwise provides, the Marine Insurance Act 1906 (UK, but applied in Singapore via the Marine Insurance Act 1906 (Singapore)) section 55 states: "Subject to the provisions of this Act, and unless the policy otherwise provides, the insurer is liable for any loss proximately caused by a peril insured against, but, subject as aforesaid, he is not liable for any loss which is not proximately caused by a peril insured against."

Proximate cause is the dominant or most effective cause, not necessarily the first or last in the chain.

Examples:

  • Vessel stranded on reef, water enters, cargo damaged. Proximate cause = stranding (covered). Claim valid under ICC C.
  • Cargo wet on arrival, no record of vessel incident, container seal intact. Proximate cause likely = condensation, leak, or pre-shipment moisture. Not a named peril. Claim likely fails under ICC C. Under ICC A it succeeds only if the damage was fortuitous and not excluded: ICC A excludes, for example, inherent vice and insufficient packing by the assured, and does not cover damage done before the insurance attached.
  • Container falls overboard during heavy weather. Proximate cause = washing overboard (not covered under ICC C; covered under ICC B).
  • Cargo damaged by fire on board. Proximate cause = fire (covered). Claim valid under ICC C.

Step 3 - Notify the insurer immediately

Same notification discipline as any marine cargo claim - same day discovery, ideally. Provide certificate number, shipment reference, arrival details, nature of damage.

Step 4 - Preserve evidence and arrange survey

A surveyor's report becomes the central evidentiary document. For ICC C claims especially, the surveyor's findings on the cause of loss determine whether cover applies. The surveyor will examine:

  • Outer container condition (intact seal, no evidence of vessel incident vs visible damage signs)
  • Inner packing condition
  • Pattern of damage
  • Master's statement of facts (vessel logs)
  • Port of distress declarations
  • General average declarations from the carrier

Step 5 - Reserve rights against carriers

If the loss was caused by a vessel incident (stranding, fire, collision), the carrier may have a separate liability under the Hague-Visby Rules or the carriage contract. The marine cargo insurer's right of subrogation depends on you preserving the recovery rights - give the carrier written notice of the loss or damage at delivery, or within three days if it is not apparent, and settle the claim, agree an extension of time or start proceedings within the carriage time bar (one year from delivery under the Hague-Visby Rules).

Step 6 - Submit the claim file with cause-of-loss evidence

For ICC C, the claim file must include cause-of-loss evidence:

  • Surveyor's report attributing damage to a named peril
  • Vessel master's statement of facts (if vessel incident)
  • Port of distress declaration (if applicable)
  • General average declaration (if jettison or GA sacrifice)
  • Carrier correspondence
  • Photos and videos

Without cause-of-loss evidence, the claim cannot be assessed against the named-perils list.

Step 7 - Settlement basis

Marine cargo claims are typically settled on:

  • Insured value (for example CIF + 10%; under Incoterms 2020 a CIF seller must insure at least 110% of the invoice value) - for total loss
  • Apportioned loss for partial damage - calculated as (depreciation %) × (insured value)

The insurer pays subject to the policy excess and any specific sub-limits.

When ICC C is - and isn't - the right choice

ICC C is typically used for:

  • Bulk commodities (raw materials, scrap metal, ore, grain) where named-perils cover is sufficient
  • CIF sales contracts where the seller's obligation is minimum cover under ICC C

ICC C is typically not the right choice for:

  • High-value finished goods where any damage source matters
  • Electronics, perishables, fragile items
  • Goods sensitive to moisture (theft and water damage are not named perils under C)
  • Specialist cargo (artwork, antiques, project cargo)

Common Mistakes / What Goes Wrong

  1. Buying ICC C to save premium, then discovering loss isn't covered. ICC C is bought for a lower premium than ICC A; the saving is not always worth the narrower cover on high-value or sensitive cargo.
  2. Assuming ICC C covers theft. It does not. Even ICC B does not. Only ICC A.
  3. Not securing the evidence of cause. Under ICC C the insured has to show what happened to the cargo and link it to a named peril; if nobody can show how the loss happened, the claim fails on coverage even if the damage is real.
  4. Confusing CIF Incoterms with insurance coverage. CIF requires some cover but defaults to minimum (ICC C). The buyer can require ICC A in the sale contract - this needs to be negotiated, not assumed.
  5. Mixing 1982 and 2009 wordings. The 2009 wordings changed some terms, notably the packing exclusion, the terrorism exclusion and the transit clause. Make sure the certificate is on current wording.

What This Means for Your Business

For an SME running international trade, the ICC choice is a commercial decision tied to the sale contract, the cargo value, the trade route, and the carrier reliability:

  1. Map your shipments by value tier. Bulk and low-value goods may be appropriate for ICC C; finished goods and high-value cargo typically warrant ICC A.

  2. Read the sale contract Incoterms carefully. CIF puts the seller on insurance; under FOB the risk passes to the buyer once the goods are on board at the port of loading, and the rule places no insurance obligation on either side. Understand which side you're on, and negotiate the cover level explicitly.

  3. For CIF sellers, consider whether ICC C exposes the buyer to gaps that come back to you commercially. A buyer who suffers a loss that ICC C does not cover may look to the seller for a commercial concession, which can erode the premium saving.

  4. For FOB buyers, take charge of the cover level. Don't accept the seller's "we'll handle insurance" without specifying the wording in the contract.

A costly mistake in marine cargo is buying the narrowest cover, then discovering at claim time that the loss type was not on the named-perils list.

Questions to Ask Your Adviser

  1. Is my marine cargo open cover on ICC A, ICC B, or ICC C, and which wording date (1/1/1982 or 1/1/2009)?
  2. For my typical shipment values and routes, does the premium saving on ICC C justify the coverage gap?
  3. Are my CIF sales contracts with overseas buyers requiring ICC A or accepting ICC C - and what is the commercial implication if a buyer's cargo is damaged uncovered?
  4. Does my open cover include War Risks and Strikes (separate Institute clauses, not part of ICC A/B/C)?
  5. What is my excess per shipment, and is there a per-vessel aggregate limit?

Related Information

Published 4 May 2026. Source verified 4 May 2026.