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Difference Between Institute Cargo Clauses A, B and C

  • Author :
  • TATA AIG Team
  • Published on :
  • 07/02/2024
  • 2 min read

Institute cargo clauses form a vital part of marine insurance. These clauses specify the scope of coverage for damage or loss that might be incurred during shipment. The coverage can include anything from the cargo, the container or the mode of transport used in shipping the items.

There are mainly three institute cargo clauses in marine insurance: A, B and C. Each clause specifies the extent of coverage. The higher the premium you pay, the higher coverage you can get. While institute cargo clause A provides the maximum coverage, clause C is the most limited.

Understanding Institute Cargo Clauses in Marine Insurance

Institute Cargo Clause A

Institute cargo clause A provides the most extensive coverage among all three. It is also called “All Risks” cargo insurance since it offers protection against almost all potential risks except those that are explicitly excluded.

Its coverage can include container, cargo as well as transport modes used for shipping the items. ICC A marine insurance is also the most expensive among the three clauses.

Institute Cargo Clause B

Institute cargo clause B provides limited coverage as compared to clause A. It covers a specific list of perils such as loss or damage caused by fire/explosion, lightning, volcanic eruption, earthquake, collision, sea water entering the ship, container, place of storage, lift van, etc. This clause allows you to avail coverage for valuable items in the cargo or partial cargo at a moderate premium.

Institute Cargo Clause C

Institute cargo clause C provides the most limited coverage against risks among the three clauses and therefore comes at a low premium. In addition to this, most of the risks covered should occur during carriage. ICC C cover in marine insurance can include fire/explosion, collision, stranding, sinking, grounding, etc.

Difference Between Institute Cargo Clauses A, B and C

Here are the main points of difference between institute cargo clauses A, B and C:

Parameter Clause A Clause B Clause C
Extent of Coverage Most extensive coverage among all three clauses Medium coverage Minimum coverage 
Premium Highest among the three clauses  Moderate premium  Lowest premium 
What is Covered?  It covers almost all potential risks except those that are explicitly excluded It covers fire/explosion, collision, lightning, volcanic eruption, earthquake, sea water entering the ship, craft, container, etc.  It covers limited risks such as fire/explosion, collision, stranding, sinking, jettison, etc. 

Wrapping Up

Institute cargo clauses play an essential role in marine insurance. First introduced in 1982, these clauses have been modified keeping in mind the changing global business landscape and risks.

Every company must know about these clauses to make an informed decision regarding its coverage needs. Another option to consider here is a marine open policy, which covers cargo across several shipments over one year.

Tata AIG’s marine insurance policies provide flexible coverage options at affordable premiums.


What is marine open policy?

A marine open policy is a marine insurance policy that covers cargo across several shipments over one year. It is a cost-effective tool for entities involved in making multiple shipments through seas.

What is ITC B cover in marine insurance?

Inland transit clauses cover the transits in India only. ITC B or inland transit clause B in marine insurance policy offers coverage for accidental damages only.

Who drafted the Institute Cargo Clauses?

The institute clauses in marine insurance were originally drafted by the Institute of London Underwriters (ILU). These clauses are widely used by insurance providers around the world including India.

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Disclaimer / TnC

Your policy is subjected to terms and conditions & inclusions and exclusions mentioned in your policy wording. Please go through the documents carefully.

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