Institute Cargo Clauses (ICC) — Detailed Analysis
A closer look at the Institute Cargo Clauses: how (A), (B) and (C) differ, what all three exclude, who has to prove what, the separate war and strikes clauses, and the minimum cover Incoterms 2020 requires.
What the clauses are
The Institute Cargo Clauses, shortened to ICC, are standard sets of terms drafted in the London insurance market. They define the scope of cover in marine cargo policies around the world, and Indian insurers use them widely. Because the same wording is used everywhere, a buyer, a seller and a bank in different countries can all understand what a cargo policy covers by reading one letter.
There are three main sets: ICC (A), ICC (B) and ICC (C). There is no ICC (D). The current versions date from 1 January 2009. That revision modernised the wording, clarifying exclusions, extending the transit (duration) clause and defining terrorism, while leaving the A, B, C structure as it was.
Three levels of cover
ICC (A) is all-risks cover, the broadest of the three: any loss or damage is covered unless an exclusion applies. ICC (B) and ICC (C) work the other way round. They list the perils they cover, and a loss from anything not on the list is outside the policy. ICC (B) has the broader list; ICC (C) covers basic named perils only.
Some perils show the steps clearly. Fire, sinking and general average are covered under all three. Entry of sea, lake or river water into the vessel, hold, liftvan or container is a named peril under ICC (B) and falls within the all-risks cover of ICC (A), but ICC (C) does not cover it. Washing overboard, earthquake and volcanic eruption are likewise outside ICC (C). Theft and pilferage are not named in (B) or (C), so they are covered only under ICC (A), where theft is not an exclusion.
What none of them covers
Certain losses are excluded under all three sets. Inherent vice, meaning damage from the natural characteristics of the goods themselves, is one. Ordinary leakage, ordinary loss in weight or volume and ordinary wear and tear are another group; these are normal, expected losses of transit and not accidents. Insufficient packing and delay are also excluded under all three.
War risks and strikes are excluded from the standard clauses too. Cover for them comes from separate sets, the Institute War Clauses (Cargo) and the Institute Strikes Clauses (Cargo), which are bought as add-ons to the main cargo policy.
Who has to prove what
Under ICC (A) the insured has to show that a fortuitous loss or damage occurred during the period of cover, not which peril caused it. It is then for the insurer to prove that an exclusion applies. Under ICC (B) and (C) the insured must show that the loss was caused by a named peril, which is a heavier task when goods simply arrive damaged with no known cause.
A related rule of interpretation is contra proferentem. Where a contract term remains genuinely ambiguous after ordinary interpretation, it may be read against the party that drafted it. In insurance that is usually the insurer, so a real ambiguity tends to be resolved in the insured's favour. It does not override clear words.
Minimum cover under Incoterms 2020
Under Incoterms 2020 a CIF seller must insure the goods to at least ICC (C), for 110% of the contract value. Under CIP the minimum is ICC (A). These are floors set by the trade term: buyers and banks often ask for wider cover, and a letter of credit sets out whatever it requires.
Rules at a glance
Illustration: one container, three answers
Suresh ships cotton garments in a container. During the voyage seawater enters the container and soaks the cartons. Under ICC (A) the loss is within the all-risks cover. Under ICC (B) it is covered because entry of seawater into a container is a named peril. Under ICC (C) it is not covered, because that peril is not on the (C) list, unless the water got in because of a peril that (C) does name.
Now suppose the container arrives dry and sealed, but twenty cartons are missing. Only ICC (A) responds. Theft and pilferage are not named perils under (B) or (C).
Key points
- ICC (A) is all risks; ICC (B) and ICC (C) cover only the perils they name, with (C) the most basic.
- Theft and pilferage are covered only under ICC (A).
- Entry of sea, lake or river water is covered under ICC (A) and (B) but not (C).
- Inherent vice, ordinary leakage and loss in weight, ordinary wear and tear, insufficient packing and delay are excluded under all three.
- War and strikes cover needs the separate Institute War Clauses (Cargo) and Institute Strikes Clauses (Cargo).
- Under ICC (A) the insurer must prove an exclusion; under (B) and (C) the insured must show a named peril caused the loss.
Common misunderstandings
- ICC (B) is not all risks with a few gaps: it is a named-perils cover, and theft and pilferage are not among its perils.
- War cover is not built into ICC (A): war and strikes are excluded from all the standard clauses and need the separate Institute clauses.
- The CIF minimum of ICC (C) is a floor under the trade term, not a statement of what a buyer or bank will accept.
Questions people ask
Is general average covered under ICC (C)?
Yes. General average is covered under all three sets, as are fire and sinking.
What changed in 2009?
The wording was modernised: exclusions were clarified, the transit (duration) clause was extended and terrorism was defined. The A, B, C structure stayed the same.
Goods arrive damaged and nobody knows how. Which clause helps?
Under ICC (A) the insured only has to show a fortuitous loss during the period of cover, and the insurer must prove an exclusion. Under (B) and (C) the insured must show a named peril caused the loss.
What this lesson relies on
- Institute Cargo Clauses (A), (B) and (C), 1 January 2009
- Institute War Clauses (Cargo) and Institute Strikes Clauses (Cargo)
- Incoterms 2020
- Marine Insurance Act, 1963
This lesson was reviewed independently against these sources on 8 October 2026. Rules change: check the current regulation, scheme document or policy wording before relying on any figure. This is education, not advice.