Basic Structure of ICC2009 Exclusion Clauses

What Are the ICC2009 Exclusion Clauses?

The ICC2009 Exclusion Clauses specify the types of damage and costs that are not covered by marine cargo insurance under the 2009 Institute Cargo Clauses.

While ICC(A) provides broad coverage, it does not unconditionally cover all losses. If an incident falls under the exclusions specified in Articles 4 through 7, the cause of loss may be external or accidental, but payment of indemnity could still be denied.

Under ICC(B) and ICC(C), coverage first requires that the cause of damage is listed among the covered perils, followed by confirmation that no exclusions apply. Therefore, under ICC(B) and ICC(C), both that the peril is covered and that no exclusion applies must be confirmed.

In cargo incidents, exclusion must not be determined solely by visual inspection of the damage. It is necessary to organize chronologically the cause of the incident, timing of loss, the parties responsible for packing and vanning, the condition of the container, facts known by the insured, and any applicable special clauses.

Scope Covered in This Article

This article organizes Articles 4 through 7 of ICC2009 as a unified framework for assessing exclusions. It only indicates the points of intersection with covered perils, period of insurance, forwarding charges, and liability under the B/L, while detailed explanations are deferred to related articles.

Item	Content Covered in This Article	Content Covered in Other Articles in Detail
Article 4 General Exclusions	Exclusions for wilful misconduct, ordinary wear and tear, insufficient packing, inherent vice or nature of the cargo, delay, insolvency, nuclear weapons, etc.	Basic Structure of the ICC2009 Coverage Clause, cause analysis of individual accidents
Insufficient Packing	Person responsible for packing, preparation, and vanning; timing; conformity with normal requirements of carriage	Packing hierarchy, packing lists, practical packing of heavy goods, dangerous goods, temperature-controlled cargo
Inherent Vice or Nature of the Cargo	Criteria distinguishing damages caused by the cargo’s own nature from external accidents	Individual damage analyses for temperature deviations, condensation, mold, spoilage, spontaneous combustion, etc.
Insolvency of Shipping Lines, etc.	Knowledge or Constructive Knowledge at Loading, impact on voyage continuation, exceptions regarding bona fide transferees	Basic Structure of the ICC2009 Claims Clause, forwarding charges, termination of contracts of carriage
Article 5 Unseaworthiness and Unsuitability	Exclusion conditions distinguishing between vessels or lighters and containers or other conveyances	Container damage, reefer accidents, management liability of carriers and NVOCCs
Article 6 War Exclusion	Positioning of war, civil strife, hostile acts, capture/seizure, abandoned weapons, and piracy risks	Institute War Clauses, war risk zones, additional premiums, period of insurance
Article 7 Strikes and Terrorism Exclusion	Strikes, labor disputes, riots, terrorism, acts motivated by political, ideological, or religious reasons	Institute Strikes Clauses, termination of carriage, detention costs, Demurrage & Detention
Cargo Insurance and Liability under the Contract of Carriage	Criteria distinguishing exclusions under marine cargo insurance from liability of carriers, NVOCCs, freight forwarders, and other service providers	B/L terms and conditions, NVOCC liability, liability limitation, notice deadlines and time bars

Purpose and Background of Exclusion Clauses

Marine cargo insurance does not cover all economic losses that may occur during carriage. By excluding normally unavoidable shrinkage, damage inherent to the cargo itself, issues related to the insured’s packaging or preparation, as well as economic losses due to delay, it distinguishes between accidental carriage-related damage and commercial or managerial risks and risks inherent in the cargo.

Articles 4 through 7 allocate exclusion causes by their nature. Article 4 addresses general exclusions related to cargo, contracts, and causes; Article 5 covers the safety and suitability of vessels and conveyances; Article 6 pertains to war risks; and Article 7 deals with social and political risks such as strikes, riots, and terrorism.

Assessing exclusions is not simply a matter of applying the “name” of the exclusion clause to an incident by the insurer. It involves a comprehensive evaluation of the causal relationship between the damage and the exclusion cause, the insured’s awareness, the party responsible for packaging and stowage, the applicable conditions and endorsements, and the incident documentation.

Cross Matrix of the Four Exclusion Clauses

Articles 4 through 7 each address different types of risks. Since multiple exclusion candidates may overlap in a single incident, the cause of exclusion should not be fixed initially but rather compared across the board.

Article / Category	Main Grounds for Exclusion	Key Judgment Criteria	Matters Not Decided by This Article Alone	Main Reference Documents
Article 4 General Exclusion	Intentional acts, ordinary leakage, ordinary loss in weight or volume, ordinary wear and tear, packing, inherent vice or nature of the cargo, delay, insolvency, nuclear weapons, etc.	Causal relationship to damage, responsible party, packaging timing, foreseeability	Whether the loss falls within a covered peril, carrier liability, specific damage amount	Survey reports, packaging documentation, temperature and humidity records, contracts of carriage, credit information
Article 5 Unseaworthiness and Unsuitability	Unseaworthiness of ship or lighter, unsuitability of container or other conveyance	Condition at loading or vanning, the insured’s knowledge, and the responsible party	Liability of the shipping line or other carrier and the timing of container handover	Container check reports, EIR, photos, stowage records, vessel information
Article 6 War Exclusion	War, civil war, hostilities, capture and seizure, abandoned weapons	Nature of the act causing damage, presence of Institute War Clauses	Overlap with general carriage accidents, continuation of the period of insurance	Accident alerts, routing, vessel movements, Institute War Clauses, insurer notifications
Article 7 Strikes and Terrorism Exclusion	Strikes, labor disputes, riots, disturbances, terrorism, acts motivated by specific intentions	Perpetrator, motive, direct damage or delay damage, presence of special clauses	Ordinary port congestion, general deterioration in security, delay exclusion	Local news reports, port notices, police records, Institute Strikes Clauses, carriage records
Cross-Article Liability Assessment	Cases where insurance exclusion leaves third-party liability	Obligations under B/L and service contracts, negligence, notice deadlines and time bars	Determining carrier liability based solely on insurance exclusion	B/L, House B/L, standard trading terms, Claim Letters, operation records

Main Situations Where Exclusion Clauses Become an Issue

Exclusion clauses may become an issue even in cases where no obvious accident has occurred. In situations such as internal damage without external abnormalities, mold discovered after prolonged carriage, temperature changes, shipping line bankruptcy, or port strikes, it is necessary to reconstruct from available evidence whether the cause was an external accident or a reason for exclusion.

Applicable Situation	Main Applicable Article	Initial Facts to Confirm	Key Judgment Criteria	Additional Areas to Verify
Decrease in weight or volume after carriage	Article 4.2	Expected ordinary loss rate and external packaging condition	Whether it is ordinary loss or external accident like leakage or bag breakage	Cargo specifications, measurement methods, carrier liability
Internal cargo damage without external packaging abnormalities	Article 4.3	Packer, packing time, securing and cushioning methods	Whether the packaging was sufficient to withstand ordinary carriage	Handling accidents, container impact, packer liability
Mold, decay, condensation, self-heating occurred	Article 4.4	Cargo nature and actual carriage environment	Whether it is intrinsic cargo property or caused by external abnormality	Temperature and humidity management, ventilation, container damage
Loss of sales opportunities or product value due to delay	Article 4.5	Whether claimed damages are physical or economic loss	Whether delay is the direct cause or another insured event occurred	Sales contracts, liquidated damages, carrier delay liability
Cargo stops at an intermediate port due to shipping line bankruptcy	Article 4.6	Insured’s awareness at time of vessel loading	Whether the insured knew or should have known about the disruption of the normal prosecution of the voyage	Forwarding charges, period of insurance, B/L terms and NVOCC liability
Wet damage caused by container holes or lack of water-tightness	Article 5.1.2	Container condition and the party responsible at the time of vanning	Whether vanning occurred before the period of insurance began or the unsuitability was known	Container provider and carrier liability
Carriage terminated due to war or strikes	Articles 6 and 7	Cause of damage and relevant supplementary clauses	Whether exclusion applies under standard ICC, or coverage under additional clauses	Period of insurance, change of destination, additional charges

Cross-Matrix of Exclusion Requirements and Limiting Factors

Even if a fact resembling a ground for exclusion exists, that fact alone does not confirm exclusion. The causation with the accident, the responsible party, the timing, awareness, and any exception clauses should be verified.

Issue	Requirements Supporting Exclusion	Insufficient Fact Alone	Circumstances Limiting or Negating Exclusion	Practical Response
Ordinary Loss	Loss normally occurring due to the cargo’s inherent nature and the ordinary course of carriage	Quantity discrepancy at arrival only	External abnormalities such as bag breakage, leakage, water ingress, or cargo handling accidents	Compare ordinary loss rates with accident evidence
Inadequate Packing	Packing unable to withstand ordinary carriage, fulfilling prescribed party and timing conditions	Damage inside the box only	Abnormal shocks, tipping, falling, container accidents, etc.	Investigate packing specifications separately from external forces encountered during carriage
Inherent Vice or Nature of the Cargo	Damage caused by the cargo’s natural characteristics without external accidents	Occurrence of mold, rot, or deterioration only	Abnormal temperature, water ingress, ventilation issues, cooling device failure	Record both cargo characteristics and carriage environment
Insolvency	Knew or should have known at loading time that the voyage continuation would be hindered	Carrier bankruptcy occurring later only	Insurance policy assigned under a bona fide binding sales contract	Preserve credit information and awareness at loading time
Container Unsuitability	Vanning before the period of insurance began, or vanning by the insured with knowledge of the unsuitability	Container defect occurrence only	Selection or provision by the carrier where the shipper was unaware of the unsuitability	Check the EIR, vanning photos, and selection and handover records
War, Strikes, etc.	Damage or costs caused by reasons listed in Article 6 and Article 7	Accident occurring in war zones or during strikes only	Cases where separate Institute War Clauses or Institute Strikes Clauses apply	Verify direct cause of damage against applicable additional clauses

Structural Comparison of ICC1963, ICC1982, and ICC2009

When comparing with earlier versions, avoid mechanically matching article numbers. The 1963 version is based on the S.G. Policy Form and has a different structure, such as war and strikes exclusions specified as Warranties, unlike the current format.

Comparison Axis	Example from ICC1963	ICC1982	ICC2009	Practical Implication
Overall Exclusion Structure	No unified block like current Articles 4 to 7; dispersed across individual clauses and Warranties	Systematized general, unseaworthiness, war, and strikes exclusions into Articles 4 to 7	Maintains 1982 system, reorganizing subjects, awareness, and terminology	1963 version should be read together with the entire contract and S.G. Policy Form
Inadequate Packing	Not identical in detailed structure to current Article 4.3	Excludes packing, preparation, and certain vanning	Clarifies suitability for carriage, the insured and their employees, packing completed before the period of insurance began, and independent contractors	Greater importance is placed on who performed the packing and when
Insolvency	No current-style Article with a knowledge requirement	Broad exclusion for insolvency of shipowners etc.	Adds exceptions concerning knowledge or constructive knowledge at the time of loading and bona fide transferees	Check not only insolvency but also awareness at the time of loading
Unseaworthiness / Unsuitability	Includes structure recognizing unseaworthiness in relation to insurer	Addresses vessels and containers within a single Article 5	Separates vessels or lighters from containers or other conveyances and clarifies the application requirements	Consider Articles 5.1.1 and 5.1.2 separately
Terrorism	Focuses on strikes and riots; the current definition structure is absent	Acts by terrorists or politically motivated persons	Specifies terrorism related to organizations and explicitly political, ideological, and religious motives	Confirm not only the actor but also connections with an organization and motives

Exclusion Assessment Flow

Exclusion clauses are not selected immediately by looking at damage photos. First, confirm the coverage analysis, then sequentially organize the causes of exclusion, exceptions, and liabilities under other contracts.

Stage	Key Question	Reference Documents	Warning Signs to Halt Decision	Next Action
1 Confirm Damage	Is there physical loss, damage, or claimed costs?	Photos, inspection records, quantity/weight records, invoices	The damage details do not match the breakdown of claim amounts	Separate physical damage and economic loss
2 Hypothesize Cause	Is the cause an external accident, inherent vice or nature of the cargo, inadequate packing, delay, or another factor?	Survey reports, temperature/humidity records, the condition of the container, accident reports	No document can definitively identify a single cause	Maintain multiple possible causes simultaneously and conduct further investigation
3 Confirm Period of Insurance	Did the cause occur within the period of insurance?	Gate-out, vanning, vessel-loading, and delivery records	Only the discovery date is known; the timing of occurrence is unclear	Identify the last point when the cargo was confirmed intact
4 Confirm Covered Risks	Does it fall under the coverage structure of ICC(A), ICC(B), or ICC(C)?	Policy, applicable clauses, accident cause materials	Covered perils cannot be specified under ICC(B) or ICC(C)	Confirm applicability to covered perils before exclusion assessment
5 Confirm Potential Exclusions	Which causes from Articles 4 to 7 are involved?	Packaging, product specifications, credit information, security/port information	Exclusion is decided based only on article names	Separate causal relationship, responsible party, timing, and awareness
6 Confirm Exceptions and Special Provisions	Are there exceptions regarding bona fide transferees or special clauses?	Policy transfer documents, Institute War Clauses, Institute Strikes Clauses, and the Institute Malicious Damage Clause	A conclusion is drawn from the basic Institute Cargo Clauses alone	Check all clauses incorporated into the policy
7 Confirm Third-Party Liability	Does carriage, storage, or packing liability remain despite insurance exclusion?	B/L, service contracts, standard trading terms, accident notifications	Insurance exclusion and carrier non-liability are treated as the same	Separate liabilities according to each contractual relationship
8 Preserve Rights	Can the notice deadlines and time bars be met?	Claim Letter, B/L clauses, delivery records	Notification is delayed waiting on insurer’s decision	Proceed with insurance claim and third-party notification in parallel

Basic Structure of Article 4: General Exclusions

Article 4 defines general grounds for exclusion related to cargo, insured’s conduct, preparation for carriage, passage of time, and the credit status of contract parties.

In ICC(A), this covers Articles 4.1 through 4.7. In ICC(B) and ICC(C), an exclusion concerning intentional damage or destruction is added, so Article 4 runs through Article 4.8.

Exclusion Item	Primary Cause	Conditions to Confirm	Common Misjudgments	Main References
Article 4.1 Wilful Misconduct	Damage or costs caused intentionally by the insured	Perpetrator, intent, causal connection to damage	Equating gross negligence with intent	Internal instructions, communication records, incident investigations
Article 4.2 Ordinary Leakage, Ordinary Loss in Weight or Volume, and Ordinary Wear and Tear	Ordinary leakage, ordinary loss in weight or volume, ordinary wear and tear	Within expected range for similar cargo	Treating all quantity differences as normal wear and tear	Loading/unloading weight measurements, allowable tolerance, packaging records
Article 4.3 Packing and Preparation	Packing or preparation unable to withstand ordinary carriage	Packer, timing, stowage, compliance with conditions of carriage	Assuming internal damage always indicates inadequate packing	Packing specifications, photos, lashing records
Article 4.4 Inherent Vice or Nature	Natural or intrinsic characteristics of the cargo itself	Presence or absence of external accidents, possibility of damage under normal conditions	Immediately attributing rot or mold to inherent nature	SDS, product specifications, temperature/humidity/ventilation logs
Article 4.5 Delay	Damage or costs resulting from delay	Whether the delay caused the damage	Treating all damage occurring during delay as delay damage	Transport schedules, incident causes, quality change records
Article 4.6 Insolvency	Insolvency or monetary default of shipowners, etc.	Knowledge or facts that should have been known at the time of loading	Assuming exclusion based solely on insolvency facts	Credit information, shipping decisions, contract assignment documents
Article 4.7 or Article 4.8	Weapons or devices using nuclear fission or atomic energy	Use of weapons/devices and causal relationship to damage	Handling all general radioactive contamination under this provision	Incident causes, official agency documents, special exclusion clauses
Article 4.7 of ICC(B) and ICC(C)	Intentional damage or destruction by the wrongful act of any person	Intentional acts, illegality, causal connection to damage/destruction	Equating theft and intentional damage	Police records, surveillance footage, incident investigations

Ordinary Leakage, Ordinary Loss in Weight or Volume, and Ordinary Wear and Tear

For liquids, powders, agricultural products, timber, chemicals, and similar cargoes, some evaporation, drying, loss in volume, sedimentation, or adhesion may occur during carriage. Such normally expected decreases may fall under Article 4.2.

However, it is necessary to distinguish ordinary leakage, ordinary loss in weight or volume, and ordinary wear and tear from abnormal loss. If there is external damage such as container breakage, valve malfunction, burst bags, water ingress, overturning, or cargo handling accidents, part or all of the decrease may not be considered normal wear and tear.

Verification Axis	Indications of Normal Wear and Tear	Indications of External Accident	Reference Materials	Practical Response
Loss Rate	Within usual range for the same cargo and shipping route	Significantly exceeds past records	Loading/unloading weight measurements, past data	Standardize measurement methods and tolerances
Exterior and Container	No damage or leakage traces	Bags torn, holes, valve malfunctions, wet marks present	Photos, handover records, EIR	Record exterior abnormalities upon arrival
Carriage Environment	Ordinary temperature, humidity, and duration	Abnormal high temperature, prolonged delay, water ingress	Temperature/humidity logs, carriage schedules, incident reports	Quantify differences from normal conditions
Cargo Characteristics	Naturally prone to drying or evaporation	Loss unlikely without external impact	Product specs, SDS, expert opinions	Confirm both cargo characteristics and signs of accidents
Stage of Carriage	Presumed gradual loss over the voyage	Sudden loss in a specific operation or stage	Weight measurement sequences, cargo handling records	Identify last confirmed normal point

Inherent Vice or Nature of the Cargo

Inherent vice or nature means characteristics inherent in the cargo that may cause damage even under ordinary conditions of carriage. Typical examples include moisture absorption, drying, decay, fermentation, spontaneous heat generation, oxidation, and chemical reactions.

The mere fact of cargo deterioration does not automatically justify the application of Article 4.4. It is necessary to verify whether normal temperature, humidity, and ventilation conditions prevailed, whether container damage or refrigeration failure occurred, and whether packing and desiccants were appropriate.

Verification Axis	Indications of Inherent Vice or Nature of the Cargo	Indications of External Accident	Main References	Practical Significance
Inherent Vice or Nature	Moisture absorption, decay, spontaneous heat, usually expected	Usually stable, external anomaly required	SDS, product specs, storage conditions	Confirm possibility of natural occurrence
Temperature & Humidity	Damage can happen within normal range	Deviations, refrigeration stoppage, abnormal condensation	Data loggers, reefer logs	Indicate whether normal or abnormal conditions numerically
Moisture & Water Ingress	Cargo’s own moisture migration and respiration	Traces of rainwater, seawater, pipe leaks	Water quality tests, salt reactions, container photos	Differentiates origin of moisture
Packing & Ventilation	Deterioration unavoidable despite suitable packing	Insufficient moisture protection, ventilation, or desiccants	Packing specs, ventilation plans, photos	Check overlap with Article 4.3
Tendency in Similar Cargo	Repeated similar damage under same conditions	Anomaly only in the subject carriage	Past claims, quality data	Compare usual tendencies with individual incidents

Article 4.3: Inadequate Packing or Preparation

Article 4.3 addresses cases where the insured cargo’s packing or preparation cannot withstand typical handling, vibration, shocks, transshipment handling, pressure, or temperature/humidity changes occurring during the insured carriage.

The 2009 version emphasizes the responsible party and timing: whether packing or preparation was performed by the insured or their employees, or completed before the period of insurance began. Packing includes stowage inside containers, but employees do not include independent contractors.

The involvement of an independent packing contractor does not immediately negate the exclusion. If packing was completed before the period of insurance began, exclusion requirements apply regardless of the responsible party. Therefore, verifications distinguish between the packer and the timing of packing.

Verification Axis	Fact to Confirm	Circumstances Supporting Exclusion	Circumstances Indicating Other Causes	Main References
Packer	Whether the insured, their employees, or independent contractors	Packer was the insured or employee	Repacking or stowage by carrier during carriage	Purchase orders, work reports, invoices
Packing Timing	Before or after insurance inception	Inadequate packing completed before the period of insurance began	Damage arising from third-party work after the period of insurance began	Work timestamps, gate-out records, the commencement of the period of insurance
Packing Strength	Compatibility with weight, center of gravity, vibration, pressure	Structure damaged even by normal handling	Falls or overturns exceeding usual expectations	Design drawings, strength calculations, shock records
Moisture Protection	Measures suitable for cargo characteristics and route	Missing necessary moisture barriers or desiccants	Water ingress into container	Packing specs, photos, water quality tests
Container Stowage	Lashing, dunnage, weight distribution	Insufficient securing, load concentration	Container overturn or collision itself	Vanning photos, stowage diagrams, EIR

Article 4.5: Delay

Article 4.5 excludes liability for damage or costs arising from delay. Even if the insured peril triggered the delay, damages caused solely by the delay itself are generally assessed separately.

Loss of sales opportunity, penalties, line stoppages, price drops, or late delivery dates are distinct from physical cargo damage. When spoilage or quality deterioration occurs, it should be assessed whether delay, inherent vice or nature of the cargo, or temperature management failures caused the damage.

If the cargo suffers direct physical damage such as fire or flooding, followed by a delay in arrival, claims should separate the direct physical loss from consequential economic losses due to delay.

Article 4.6: Insolvency of Shipowners and Other Operators

Article 4.6 deals with damage or costs arising from insolvency or monetary default by shipowners, managers, charterers, or operators.

The 2009 version requires more than just insolvency facts. It is necessary to verify whether at the time of loading onto the vessel, the insured was aware or should have been aware in the ordinary course of business that insolvency or similar events would disrupt the normal prosecution of the voyage.

There is an exception where the insurance contract has been transferred to a claimant who has purchased or agreed to purchase the cargo in good faith under a binding contract; in such cases, the exclusion may not apply.

Verification Axis	Circumstances Supporting Exclusion	Circumstances Limiting or Negating Exclusion	Main References	Practical Response
Judgment Timing	Major credit concerns evident at time of vessel loading	Sudden change after loading due to unforeseeable circumstances	Loading date, bankruptcy filing date, credit information	Avoid judging solely by bankruptcy date after the fact
Insured’s Awareness	Received information about nonpayment, suspension of operation, etc.	Information was difficult to obtain even with due diligence	Emails, internal reviews, agent communications	Clarify who had what information
Impact on Voyage	Insolvency obstructed normal voyage continuation	No causal connection between insolvency and cargo damage	Notices of termination of carriage, port records	Demonstrate causality between insolvency and cost occurrence
Claimant Status	Party aware of credit risk from the start	Bona fide transferee under binding sales contract	Sales contracts, insurance policy assignment documents, settlement documents	Differentiate insured and final claimant
Additional Charges	Cost arises directly from insolvency	Carriage terminated due to other covered perils	Cost details, incident causes, subcontract agreements	Assess separately from forwarding charges under Article 12

Basic Structure of Article 5: Unseaworthiness and Unsuitability

Article 5 separates unseaworthiness or unsuitability for safe carriage of the vessel or lighter from the unsuitability of containers or other conveyances.

Article 5.1.1 deals with cases where the insured was aware of the vessel or lighter being unseaworthy or unsuitable for safe carriage at the time of loading. Article 5.1.2 covers cases where the cargo was vanned into the container or other conveyance before the period of insurance began, or where the insured or their employees performed the vanning and knew of the unsuitability at that time.

The exception concerning bona fide purchasers in Article 5.2 applies to the exclusion relating to vessels and lighters under Article 5.1.1. It should not be automatically extended to the container and other conveyance provisions in Article 5.1.2.

Article	Subject	Key Requirement	Exceptions / Related Provisions	Practical Confirmation
Article 5.1.1	Unseaworthiness or unsuitability of vessel or lighter	Insured knew of unseaworthiness/unsuitability at loading	Exception for bona fide purchasers under Article 5.2	Confirm vessel information, timing of recognition, and loading date
Article 5.1.2 first part	Unsuitability of container or other conveyance	Vanning occurred before the period of insurance began	Not determined solely by whether the person performing the vanning knew of the unsuitability	Compare the commencement of insurance with completion of vanning
Article 5.1.2 second part	Unsuitability of container or other conveyance	Vanning performed by the insured or an employee who knew of the unsuitability	Responsibility for carrier-provided container evaluated separately	Check the party performing the vanning, the party selecting the container, and the inspection records
Article 5.2	Exception to the application of Article 5.1.1	Assignment of the insurance contract to a bona fide purchaser under a binding contract	Does not directly apply to Article 5.1.2	Verify sales contract and insurance policy transfer
Article 5.3	Implied warranty regarding unseaworthiness and carriage suitability	The insurer waives a breach of the implied warranty	Separate from explicit exclusion in Article 5.1	Do not confuse warranty breach with exclusion requirements

Points to Confirm Regarding Unsuitability of Containers and Other Conveyances

If defects such as holes, corrosion, door seal failure, floor damage, odors, contamination, rainwater intrusion, or reefer unit malfunctions are confirmed, it is necessary to verify not only the existence of defects but also who selected the container, who performed the vanning, when inspections were performed, and who was able to recognize the unsuitability.

Verification Aspect	Verification Content	Circumstances Indicating Insured Party Involvement	Circumstances Indicating Carrier or Others' Involvement	Main Documents
Selection	Whether the type and performance suit the cargo	The shipper specified or selected the equipment	Shipping line or NVOCC provided container unilaterally	Booking, equipment specification, arrangement records
Vanning	Who performed the vanning	Vanning by the insured or employees	Vanning by the carrier, warehouse, or independent contractor	Work reports, photos, invoices
Visual Inspection	Holes, rust, floor, doors, odors, etc.	Used with awareness of obvious abnormalities	Hidden defects preventing visual confirmation	Checklists, EIR, photos
Reefer Performance	Settings, operation, power supply, alarms	Incorrect settings or inadequate instructions	Mechanical failure or power loss	PTI, reefer logs, instruction sheets
Damage Cause	Whether the defect caused the damage	Direct correlation between unsuitability and damage	Other causes such as collision, flooding, or cargo handling accidents	Survey, water quality test, incident report

Basic Structure of Article 6: War Exclusion

Article 6 excludes damage and expenses caused by war, civil war, revolution, rebellion, riotous disturbances, hostile acts by belligerent states, capture, seizure, arrest, detention, imprisonment, as well as by abandoned mines, torpedoes, bombs, and other weapons.

Ordinary ICC(A), ICC(B), and ICC(C) clauses generally do not cover these war risks. If coverage is required, confirm the incorporation of the Institute War Clauses, the period of insurance, routing, war risk areas, and any additional premium applicable.

Treatment of Piracy Risks

Under ICC(A) Article 6.2, the exclusion for capture and seizure does not apply to piracy. Therefore, property damage caused by piracy may be covered under the broader protection of ICC(A) unless excluded by other exclusions.

In ICC(B) and ICC(C), covered perils are specifically enumerated. Simply relying on war exclusion wording does not imply coverage for piracy risks. It is necessary to verify the listed covered perils, exclusions for wilful damage, and the presence of special provisions.

Points for Confirmation	ICC(A)	ICC(B) / ICC(C)	Additional Conditions to Confirm	Practical Considerations
War Risks	Excluded under Article 6	Excluded under Article 6	Institute War Clauses	Separate the base Institute Cargo Clauses from the Institute War Clauses
Capture and Seizure	Generally excluded	Generally excluded	Confirm causal connection to war risks	Distinguish from administrative measures and customs detention
Piracy Acts	Not excluded under Article 6.2	Not automatically covered as enumerated risks	Special endorsements, specific cause of damage	Avoid conclusions based solely on the term “piracy”
Change of Voyage	Check period of insurance and notice of change	Same as left	Change of Voyage, war risk area	Promptly notify insurer
Interruption at Intermediate Ports	Verify period of insurance and forwarding charges	Same as left	Articles 9, 12; Institute War Clauses	Separate physical damage and additional charges

Basic Structure of Article 7: Strikes and Terrorism Exclusions

Article 7 excludes liability for damage caused by participants in strikes, locked-out workers, participants in labor disputes, riots, and civil commotions, as well as damage arising from strikes, etc., terrorist acts, and acts motivated by political, ideological, or religious reasons.

The 2009 edition distinguishes between terrorist acts carried out by organizations attempting to overthrow or influence the government through violence or related individuals acting on behalf of those organizations, and acts carried out by individuals motivated by political, ideological, or religious reasons.

Where cover for damage caused by strikes or terrorism is required, it is necessary to verify the applicable Institute Strikes Clauses or similar supplementary clauses. However, even if such supplementary clauses exist, not all losses such as mere delays, storage charges, demurrage, detention, or loss of sales are necessarily covered.

Occurrence	Relation to Article 7	Direct Cause to Confirm	Other Items to Confirm	Practical Response
Cargo damage caused by strike participants	May fall under Article 7.1	Causal relationship between actor and physical damage	Institute Strikes Clauses	Obtain reports from police, port authorities, and warehouses
Port operations halted due to strike	Check Article 7.2 and delay exclusions	Physical damage or costs of detention	Period of insurance, additional charges, contract of carriage	Separate by type of cost
Organized terrorist act	May fall under Article 7.3	Relationship to organization and violent intent against government	Institute Strikes Clauses, sanction regulations	Verify certification and facts from official authorities
Destruction motivated by ideological or religious reasons	May fall under Article 7.4	Perpetrator’s motive and relation to damage	Intentional damage and malicious damage endorsements	Avoid conclusions based solely on presumed motives
Port congestion or manpower shortage	Does not automatically fall within the strikes exclusion	Existence of formal dispute actions	Delay exclusion, ordinary delay in carriage	Confirm port notifications and actual causes

Differences in the Exclusion Structures of ICC(A), ICC(B), and ICC(C)

Articles 4 to 7 share many common parts, but ICC(A) and ICC(B)/ICC(C) are not the same. In particular, they differentiate the coverage trigger, intentional damage, and piracy risks.

Comparison Axis	ICC(A)	ICC(B)	ICC(C)	Practical Implication
Coverage Trigger	Covers broad perils except for exclusions	Covers enumerated perils	More restricted enumerated perils than ICC(B)	B and C require confirmation that the peril falls under the enumerated perils before an exclusion applies
General Exclusion	Articles 4.1 to 4.7	Articles 4.1 to 4.8	Articles 4.1 to 4.8	In B and C, intentional damage is added in Article 4.7
Intentional Damage or Destruction	No additional exclusions equivalent to B and C in Article 4	Excluded under Article 4.7	Excluded under Article 4.7	Refer to Institute Malicious Damage Clause and others as needed
Piracy	Not excluded under Article 6.2 and may be covered	Not necessarily covered as an enumerated peril	Not necessarily covered as an enumerated peril	Check specific damage causes and endorsements related to piracy
War and Strikes	Generally excluded under basic clauses	Generally excluded under basic clauses	Generally excluded under basic clauses	Check the Institute War Clauses and Institute Strikes Clauses separately

Division of Roles with Adjacent Articles and Contracts

The exclusion clauses alone do not determine whether indemnity is payable or the ultimate responsible party. The boundaries with covered perils, period of insurance, forwarding charges, and carrier liability need to be confirmed.

Issue	Matters Confirmed by Exclusion Clauses	Matters Confirmed by Adjacent Clauses or Contracts	Decisive Distinction	Delegation to Related Articles
Article 1 and Articles 4 to 7	Causes excluded from coverage	Whether the loss falls within a covered peril in the first place	Entry to coverage and exclusion are separate stages	Basic Structure of the ICC2009 Coverage Clause
Articles 4.6 and 12	Exclusion of damages and costs due to insolvency	Forwarding charges after termination of carriage caused by a covered peril	Differentiates insolvency from the direct cause of cost occurrence	Basic Structure of the ICC2009 Claims Clause
Articles 6, 7 and Articles 8 to 10	Exclusions for causes such as war and strikes	The period of insurance and changes of destination after termination of carriage	Exclusion of risks and continuation of the period of insurance are separate issues	Basic Structure of the ICC2009 Insurance Period Clause
Packing Exclusion and Packer Liability	Coverage under the insurance contract	Duty of care and limitation of liability under the packing contract	Packer liability may remain even if excluded by insurance	Packing Hierarchy, Standard Trading Conditions
Container Unsuitability and Carrier Liability	Subject, timing, and knowledge under Article 5.1.2	Obligations regarding container provision, selection, and maintenance	Insurance exclusions and carrier liability are judged separately	NVOCC Liability, B/L Terms and Conditions

Cases Prone to Issues in Practice

In exclusion assessments, even when the damage appearance is the same, the causes and parties involved differ. In the following cases, both coverage under the policy and third-party liability should be checked simultaneously.

Case	Points Prone to Issues	Documents to Confirm	Practical Notes
Shortage in the quantity of liquid cargo on arrival	Whether the shortage arose from ordinary evaporation or adhesion, or from leakage from the container	Loading-port weighing, tank/container records, photos	Do not judge ordinary loss based on quantity difference alone
Mechanical parts packed by the shipper damaged inside the box	Whether the fixing and cushioning resisted ordinary vibration	Packing specifications, photos, weight/center of gravity, impact records	Also confirm presence or absence of abnormal shocks or drops
Mold or condensation occurred on food and paper products	Competition between inherent characteristics of the cargo, packaging, moisture protection, and external water ingress	Temperature and humidity, SDS/specifications, desiccants, salt reaction	Do not apply Article 4.4 solely based on the fact of quality deterioration
Frozen cargo deteriorated during port storage	Whether the cause was delay, an abnormal temperature, or a power outage	Reefer logs, carriage schedule, alarm records	Do not apply the delay exclusion merely because deterioration occurred during a delay
Cargo stopped at an intermediate port due to shipping line bankruptcy	Knowledge at loading and the status of the bona fide transferee	Credit information, loading date, sales contracts, transfer of documents	Do not determine the exclusion solely from the bankruptcy date
Rainwater entered through holes in the container	Who selected the container, performed the vanning, inspected it, and knew of the unsuitability	EIR, check sheets, vanning photos	Separate the insurance coverage assessment from the container provider’s liability
Cargo damaged or stolen due to piracy	Difference in coverage structures between ICC(A), ICC(B), and ICC(C)	Policy terms, incident records, endorsements, routes	Do not assume that all ICC conditions treat piracy in the same way
Storage charges incurred due to port operations halted by strike	Distinction among physical damage, delay loss, and additional charges	Port notices, storage claims, applicable riders, contracts of carriage	Even if the Institute Strikes Clauses apply, not all costs are necessarily covered

Comparison Table of Freight Forwarder Involvement Scope

Even if a freight forwarder arranges insurance, carriage, container bookings, and accident notifications, they may not be in the final decision-making position regarding insurance exclusions. Support scopes are separated according to contractual roles.

Category	Likely Support Activities	Matters Not to Definitively Decide	Practical Approach
Contracting Carrier	House B/L, carriage route, subcontracted carrier, container arrangements, provision of accident records	Whether an exclusion applies, final indemnity amount, a conclusion that it bears no liability under the contract of carriage	Separate insurance claim support from responses regarding liability under the contract of carriage
Actual Carrier	Condition of vessel, vehicle, container; provision of loading/unloading and carriage records	Unilateral determination that inadequate packing or inherent vice caused the loss	Distinguish between observed facts and acceptance or denial of liability
Simple Intermediary	Contacting insurer and carrier, forwarding documents, assisting with survey arrangements	Guaranteeing insurance coverage or asserting that it has authority to act as an insurance claim agent	Clearly specify scope of contacts/forwarding and presence or absence of agency authority
Agent / Coordinator for Specific Operations	Coordination of inspection, quotations, repacking, storage, and onward carriage	That the costs are necessarily covered or that no exclusion applies	Record whether the insurer’s instructions or approval have been obtained
Provider of Ancillary Services (Packing, Storage, Inspection, etc.)	Provision of work specifications, photos, inspection records, temperature/humidity and quality data	Final determination of cause of damage, insurance liability, and carrier liability	Objectively record performed work and observed facts

In the cases of Simple Intermediary, Agent / Coordinator for Specific Operations, and Provider of Ancillary Services (Packing, Storage, Inspection, etc.), the scope of engagement may not be clearly defined solely by liability provisions in carriage documents. For these types of operations, it has practical value to incorporate standard trading terms in advance into quotations, master agreements, and individual order forms, clearly specifying the scope of liability, limitation of liability, exclusions, indirect damages, notice deadlines and time barss, and subcontractor protections.

However, issuing an FCR or simply including the name of standard trading terms on documents does not automatically incorporate those terms into the contract. It is necessary to confirm prior presentation and agreement, priority relationships with individual contracts, and the application of mandatory laws.

Decision Checklist

Even if there is a possibility of exclusion, do not delay accident notification or rights preservation. Collect evidence and make notifications in parallel while clearly stating any unresolved issues.

Checkpoint	Counterparty	Items to Confirm	Action if Issues Arise
Immediately after discovering the accident	Shipper, Warehouse, Carrier	Date/time and place of discovery, packaging condition, cargo condition, accident traces	Do not conclude cause; preserve the physical cargo, photos, and records
When notifying the insurer of the claim	Insurer, Insurance Agent	Applicable conditions, endorsements, accident summary, emergency measures	Send a preliminary report even if documents are incomplete; provide additional materials later
Suspected ordinary loss	Shipper, Weighing Company, Surveyor	Permissible loss rate, origin weighing, packaging abnormalities	Standardize weighing method and investigate external accidents
Suspected insufficient packing	Shipper, Packing Contractor, Warehouse	Packer identity, timing, specifications, securing methods, moisture control	Simultaneously verify external causes such as abnormal shocks
Suspected inherent characteristics of the cargo	Shipper, Manufacturer, Experts	Product characteristics, preservation conditions, carriage environment, external abnormalities	Obtain scientific data and avoid fixing on a single cause
Suspected delay damages	Shipper, Carrier, Insurer	Physical damages and economic losses, direct cause of delay	Separate causal relationships by damage category
Shipping line or related party insolvency	Insured, Contracting Carrier, Credit Management Department	Credit information at loading, awareness, assignment of the insurance policy	Consider Article 4.6 and Article 12 separately
Suspected container unsuitability	Shipping Line, NVOCC, Shipper, Warehouse	Party selecting the container, party performing the vanning, inspections, commencement of the period of insurance, and knowledge	Assess Article 5.1.2 and carrier liability separately
Occurrence of war or strikes risks	Insurer, Carrier, Local Agent	Direct cause, supplementary clauses, route changes, termination of carriage	Notify the insurer promptly and confirm continuation conditions
Rights preservation against third parties	Carrier, NVOCC, Warehouse, Packing Contractor	Notice deadlines, reservation of liability, time bars, evidence	Send a Claim Letter without waiting for the insurer’s conclusion

Common Misunderstandings

In exclusion clauses, misunderstandings often arise from drawing conclusions based solely on names such as "ICC(A)," "insufficient packing," "delay," or "shipping line bankruptcy."

Common Misunderstanding	Actual Consideration	Practical Notes
ICC(A) basically covers everything	Even ICC(A) applies exclusions from Articles 4 to 7	Confirm not only covered perils but also exclusions and special provisions
All shortages in quantity are ordinary loss	Shortages from bag breakage, leakage, water ingress, or cargo handling accidents are considered separately	Compare exterior damage conditions with ordinary loss ratios
Damage inside the box always means insufficient packing	External accidents such as abnormal impact, drops, or overturning can also be causes	Check both packing specifications and external forces during carriage
Article 4.3 does not apply if packing was done by an independent packer	If packing was done before the period of insurance began, responsibility is not decided by packer alone	Separate verification of packer and timing of packing is necessary
Mold and decay always arise from inherent vice or nature of the cargo	Abnormal temperatures, water ingress, or ventilation failure from external accidents may be causes	Cross-check carriage environment with cargo characteristics
All damage occurring during delay is excluded due to delay	It must be confirmed whether delay caused the damage or another insured event was the direct cause	Confirm causality as well as chronological order
Bankruptcy of the shipping line always results in exclusion under Article 4.6	Exceptions exist regarding foreseeability at the time of loading and bona fide transferees	Distinguish bankruptcy date and time of loading
Defective containers are always covered by marine cargo insurance	Article 5.1.2 may apply depending on the timing of vanning, the party performing it, and knowledge of the unsuitability	Separate insurance exclusions from container provider liabilities
Piracy is treated the same under all ICC clauses	Structures differ between ICC(A) and named-perils ICC(B) and ICC(C)	Check applicable conditions and specific damage causes
If insurance excludes coverage, no claims can be made against anyone	Claims against carriers, NVOCCs, warehouses, packers, etc. are separate matters	Keep insurance judgments and contractual liabilities separate to preserve rights

Practical Scenario 1: Damage to Shipper-Packed Cargo Due to Ordinary Vibration

Consider a case where machine parts packed by the exporter themselves were found damaged inside the wooden crate upon arrival, while the crate and container showed no obvious dents.

In this case, insufficient packing under Article 4.3 would be a primary consideration. Factors such as cargo weight, center of gravity, cushioning materials, securing devices, wooden crate strength, pallet structure, and lashing methods should be reviewed to determine whether the packing was designed to withstand vibrations and handling typical of international carriage.

However, the absence of visible external damage alone should not rule out external incidents. Records such as impact gauges, container carriage records, number of transshipments, and reports of container overturns or sudden braking should also be examined to distinguish between ordinary and abnormal external forces.

Practical Scenario 2: When Mold, Deterioration, and Inherent Vice Are Contested

When mold or deterioration is found in imported food products, lumber, paper products, etc., it is necessary to consider not only Article 4.4 regarding the inherent vice or nature of the cargo but also Article 4.3 concerning moisture-proof packaging, external water intrusion, insufficient ventilation, and duration of carriage simultaneously.

Check the SDS, product specifications, initial moisture content, moisture-proof materials, desiccants, temperature and humidity inside the container, outside air temperature, salt reaction, and the condition of the container roof and side walls.

If damage occurred solely due to normal temperature and humidity variations, the inherent characteristics of the cargo become relevant. Conversely, if there is ingress of rainwater or seawater, reefer unit failure, or abnormal ventilation problems, these are separately assessed as external accidents or issues relating to the container or other conveyance.

Practical Scenario 3: Damage from Water Ingress Due to Unsuitable Container

In cases where a container loaded with cargo has holes or defective door seals, allowing rainwater or seawater ingress during carriage, Article 5.1.2 must be considered.

It is necessary to clarify who selected the container, who performed the vanning, whether holes or corrosion were identifiable at the time of vanning, and whether the vanning occurred before or after the period of insurance began.

The evaluation for insurance and contracting carrier liability differs depending on whether the cargo owner knowingly used a manifestly unsuitable container or whether the shipping line or NVOCC provided a container with hidden defects that the cargo owner could not have detected.

Practical Scenario 4: Cargo Held at an Intermediate Port Due to Shipping Line Bankruptcy

In cases where the shipping line becomes insolvent during transit and the cargo is held at an intermediate port, incurring storage fees and alternative carriage costs, Articles 4.6 and 12 should be reviewed separately.

First, it should be confirmed whether the insured was aware at the time of loading that the shipping line was insolvent or that there was a risk of voyage interruption, or if such information should have been known under the ordinary course of business.

Subsequently, it is necessary to clarify whether the assignee of the insurance contract is a bona fide purchaser under a binding sales contract, whether the incurred costs arise from insolvency, or if they are forwarding charges following termination of carriage due to another covered peril.

Practical Scenario 5: Cargo Unloading and Gate-Out Halted Due to Strike

In cases where unloading, customs clearance, and gate-out are halted due to a strike at the destination port, causing long-term cargo detention, Article 7 must be considered together with the Institute Strikes Clauses, Article 4.5 on delay, and the period of insurance.

Direct physical damage to cargo caused by striking workers and charges such as storage fees, demurrage, detention, and delivery delays resulting from work stoppages are not considered the same type of damage.

The applicable special clauses, physical damage to the cargo, the nature of additional charges, the end of the period of insurance, and responsibility for costs under the contract of carriage should be organized separately.

Summary

The ICC2009 exclusion provisions consist of general exclusions in Article 4, unseaworthiness and unsuitability exclusions in Article 5, war risk exclusions in Article 6, and strikes and terrorism exclusions in Article 7.

Article 4 confirms exclusions for wilful misconduct of the insured, ordinary leakage, ordinary loss in weight or volume, and ordinary wear and tear, insufficient packing or preparation, inherent vice or nature of the cargo, delay, insolvency of shipowners and others, and nuclear weapons. ICC(B) and ICC(C) additionally confirm exclusions for intentional damage or destruction caused by the wrongful act of any person.

Article 5 distinguishes between unseaworthiness of the vessel or lighter and unsuitability of containers or other conveyances. It is necessary to separately verify the timing of loading or vanning, the responsible party, and the insured’s knowledge, and the scope of application under Article 5.2.

Articles 6 and 7 address war, capture and seizure, abandoned munitions, strikes, riots, civil commotion, terrorism, and acts motivated politically, ideologically, or religiously. If coverage is required, the incorporation and terms of the Institute War Clauses, Institute Strikes Clauses, and any other relevant endorsements should be checked.

When interpreting exclusion clauses, it is important to organize materials not only by the name of the damage but also by cause, responsible party, timing, awareness, packing and stowage, containers and other conveyances, endorsements, and exceptions.

Furthermore, even when exclusions apply under marine cargo insurance, this does not preclude pursuing liability against the carrier, NVOCC, freight forwarder, warehouse operator, packer, or others. The determination of insurance indemnity should be separated from liability under contracts of carriage or service contracts, and rights must be preserved by observing notice deadlines and time bars.

Marine cargo insurance for international shipments differs more by policy terms than by premium. Consult a specialist insurer or insurance agent when selecting coverage and interpreting policy terms.