Marine Cargo Insurance Clauses and Institute Cargo Clauses (A), (B), (C)
Scope
This domain tests the 2009 Institute Cargo Clauses. You must distinguish ICC(A), ICC(B) and ICC(C), apply exclusions and identify who bears the burden of proof.
Coverage structure
- ICC(A) covers all risks of loss or damage except those excluded. The insured proves loss or damage; the insurer must prove an exclusion applies.
- ICC(B) and ICC(C) are named-perils covers. The insured must bring the loss within a listed peril.
- Both B and C list fire/explosion; vessel or craft stranded, grounded, sunk or capsized; overturning/derailment of land conveyance; collision/contact with an external object other than water; discharge at port of distress; earthquake, volcanic eruption or lightning.
- B adds water entering the vessel, craft or place of storage from sea, lake or river; washing overboard; and total loss of a package lost overboard or dropped during loading/unloading. C does not.
- Neither B nor C covers theft, non-delivery or general water damage unless a listed peril caused it.
Exclusions
Common exclusions include wilful misconduct; ordinary leakage, loss in weight/volume and wear and tear; insufficient packing or preparation; inherent vice; delay, even if caused by an insured peril; insolvency or financial default; unseaworthiness or container unfitness known to the insured before loading; war; strikes; nuclear weapons and radioactive contamination.
Worked example
Heavy weather cracks a hatch cover and seawater enters the hold, ruining cartons. Under ICC(A), the loss is covered unless the insurer proves an exclusion. Under ICC(B), clause 1.2.1 covers water entering from the sea. Under ICC(C), the same loss is not covered because water entry is not a listed peril. If the cartons collapsed because they were too weak for ordinary handling, the 4.3 packing exclusion may defeat all three covers.
Traps
'All risks' is not 'all losses'. Delay is excluded as a cause, but physical damage caused by a covered peril during delay can still be covered. Do not assume B covers theft; it does not.