Basic Structure of ICC2009 Risk Coverage Clauses

What Are the RISKS COVERED in ICC2009?

The RISKS COVERED in ICC2009 designate which perils, costs, or liabilities under the contract of carriage are insured under marine cargo insurance.

The RISKS COVERED consist of Article 1 covering insured perils, Article 2 on general average and salvage charges, and Article 3 addressing the Both to Blame Collision Clause.

Article 1 defines the perils insured against for loss or damage to cargo under ICC(A), ICC(B), and ICC(C). ICC(A) broadly covers loss or damage to cargo except for exclusions. ICC(B) and ICC(C) provide coverage only for perils explicitly listed in the clauses.

Articles 2 and 3 do not deal solely with physical damage to the cargo itself. Article 2 covers amounts payable as general average contributions and salvage charges, while Article 3 applies to liabilities the insured incurs under the Both to Blame Collision Clause in the contract of carriage.

Therefore, when confirming RISKS COVERED, it is necessary to distinguish not only whether the cargo was damaged but also the cause of the incident, the applicable ICC terms, exclusions, insurance period, general average, salvage charges, and claims arising from the contract of carriage.

Scope Covered in This Article

This article organizes ICC2009 Articles 1 through 3 according to the decision-making sequence following a cargo accident. Exclusions, insurance period, claim procedures, and carrier liability are only briefly indicated as connecting points; details are referred to sibling articles.

Item	Contents Covered in This Article	Contents Covered in Other Articles
Article 1 Risks Covered	Basic structure of covered risks under ICC(A), ICC(B), and ICC(C)	Individual cargo endorsements, deductibles, sum insured, loss valuation
ICC(A)	Broad coverage of cargo loss and damage except exclusions	Basic Structure of ICC2009 Exclusion Clauses; proof of the cause of loss in individual cases
ICC(B) and ICC(C)	Applicability to listed perils and differences in coverage scope between the two conditions	Coverage extensions by specific endorsements and insurer-specific special clauses
Damage of Unknown Cause	Investigation approach for wet damage, breakage, and shortage of unknown cause	Liability Assessment When the Accident Segment Is Unclear, surveys, and evidence evaluation
Article 2 General Average and Salvage Charges	General average contributions, salvage charges, and security arrangements for cargo release	General average adjustment, General Average Bonds, and General Average Guarantees
Article 3 Both to Blame Collision Clause	Notification to the insurer and basic response when a claim arises under the contract of carriage	Collision liability, governing law, and the allocation of responsibility between the carrier and cargo interests under the B/L
Exclusions and Insurance Period	Sequence for checking exclusions and the insurance period after identifying a covered peril	Basic Structure of ICC2009 Exclusion Clauses; Basic Structure of the ICC2009 Insurance Period Clause
Articles 11 through 14 Claims	Connection between covered perils and claimant status, forwarding charges, constructive total loss, and increased value insurance	Basic Structure of ICC2009 Claims Clauses
Article 15 Benefit of Insurance	Boundary between insurance coverage for the assured and any benefit claimed by a carrier or other bailee	What the ICC2009 Benefit of Insurance Clause Means
Carrier and NVOCC Liability	Criteria separating insurance coverage from contractual liability under contracts of carriage	B/L terms and conditions, NVOCC liability, liability limits, notice deadlines, and time bars

Purpose and Background of RISKS COVERED

When a cargo incident occurs, the first step is not to calculate the amount of damage or immediately examine exclusions. The first step is to identify which perils are covered under the insurance contract.

ICC(A), ICC(B), and ICC(C) are all Institute Cargo Clauses, but their Article 1 structures differ. ICC(A) covers a broad range of perils and then requires consideration of applicable exclusions. ICC(B) and ICC(C) first require the cause of loss or damage to correspond to a listed peril, after which the exclusions must also be checked.

This distinction becomes particularly important in cases involving wet damage, breakage, shortage, mold, or internal damage where the cause is unclear, rather than in incidents with an obvious cause such as fire or grounding.

Articles 2 and 3 also connect liabilities other than direct physical cargo damage to the insurance. These include general average contributions and salvage charges arising from a marine casualty and liability under the Both to Blame Collision Clause in the contract of carriage.

Three Articles Constituting RISKS COVERED

Articles 1 through 3 define the scope of coverage from different perspectives. A single marine casualty may simultaneously involve cargo damage, general average, salvage charges, and the Both to Blame Collision Clause.

Article / Category	Primary Subject	Main Conditions for Coverage	Issues Not Determined by This Article Alone	Main Reference Documents
Article 1 Risks	Loss of or damage to the insured cargo	Broad coverage under ICC(A); listed perils under ICC(B) and ICC(C)	Exclusions, insurance period, amount of loss, and insurable interest	Insurance policy, applicable wording, incident report, photographs, and survey report
Article 2 General Average	General average contributions and salvage charges	Amounts adjusted or determined in accordance with the contract of carriage, governing law, and applicable practice	Security procedures, final adjustment amount, and carrier liability	General average declaration, adjuster’s notice, B/L, insurance policy, and cargo valuation documents
Article 3 Both to Blame Collision Clause	The assured’s liability under the corresponding provision in the contract of carriage	Liability relating to a peril covered by the cargo insurance	Allocation of fault between vessels and the validity of the carrier’s underlying claim	B/L, contract of carriage, carrier’s demand, and collision notice
Cross-Cutting Claims Management	Insurance claims, cargo release, and preservation of rights against third parties	Prompt notification, preservation of evidence, and verification of related contracts	Final liability of the carrier, NVOCC, warehouse operator, or other party	Claim Letter, Master B/L, House B/L, and delivery records

Main Situations Where RISKS COVERED Becomes an Issue

RISKS COVERED is relevant not only when cargo suffers physical damage but also when general average is declared, salvage charges are demanded, or a carrier asserts a contractual claim.

Applicable Situation	Main Article / Conditions	First Facts to Confirm	Key Decision Criteria	Additional Areas to Check
Cargo damaged by fire or explosion	Article 1 / ICC(A), ICC(B), and ICC(C)	Causal relationship between the fire or explosion and the cargo damage	Whether the peril is covered and whether an exclusion applies	Cause of fire, general average, and carrier liability
Breakage or wet damage of unknown cause	Article 1 / Applicable ICC Conditions	Last confirmed intact condition and first discovery of damage	Whether ICC(A) or the listed-peril structure of ICC(B) or ICC(C) applies	Exclusions, insurance period, and transport segment
Seawater or other specified water enters a container	ICC(B) Article 1.2.3	Type of water, point of ingress, and container condition	Whether ingress of seawater, lake water, or river water can be demonstrated	Condensation, insufficient packing, and container unsuitability
General average declared following vessel fire or grounding	Article 2	General average declaration and cargo-release requirements	Required security, cargo value, and existence of insurance	General average adjustment, salvage charges, and insurance period
Contractual claim received from a carrier after a collision	Article 3	B/L provision relied upon for the claim	Whether the claim arises under the Both to Blame Collision Clause	Governing law, collision liability, and response deadline
Total loss of one package during loading or unloading	ICC(B) Article 1.3	Whether the package was lost during loading onto or unloading from a vessel or craft	Whether one complete package was totally lost rather than partially damaged	Stevedore liability, work records, and insurance period
Special provisions attached to ICC(C)	Article 1 and Individual Endorsements	Wording incorporated into the final policy	Whether the contract extends coverage beyond standard ICC(C)	Insurer-specific automatically attached endorsements

Application Requirements and Exclusion Cross-Matrix

The type of damage alone does not determine whether Articles 1 through 3 apply. The facts supporting coverage, facts that are insufficient by themselves, and circumstances pointing toward exclusion or denial must be examined separately.

Issue	Requirements Supporting Coverage	Facts Insufficient by Themselves	Exclusion or Denial Factors	Practical Response
ICC(A) Cargo Damage	Loss of or damage to insured cargo occurring during the insurance period	A reduction in cargo value without physical loss or damage	Ordinary wear and tear, inherent vice or nature, inadequate packing, delay, or another exclusion	Organize the physical damage, time of occurrence, and potential exclusions
ICC(B) Listed Perils	The loss or damage corresponds to Articles 1.1 through 1.3	The mere existence of wet damage, breakage, or shortage	Inability to establish a causal relationship with a listed peril	Match the incident evidence against each listed peril
ICC(C) Listed Perils	The loss or damage corresponds to a major transport casualty, general average sacrifice, jettison, or another listed peril	The fact that damage occurred during transport	Earthquake, washing overboard, water ingress, or another peril not included in standard ICC(C)	Check whether any endorsement extends standard ICC(C)
General Average and Salvage Charges	The contribution or charge was adjusted or determined under the contract of carriage, governing law, and applicable practice	The shipping line merely describes a charge as general average	The contribution or charge relates to a cause excluded under Articles 4 through 7	Confirm the adjuster’s notice and obtain instructions from the insurer
Both to Blame Collision Clause	The assured incurs liability under the relevant provision in the contract of carriage	The mere occurrence of a vessel collision	General costs or claims unrelated to the Both to Blame Collision Clause	Notify the insurer before admitting or settling the claim
Rights Against Third Parties	Contractual or legal liability exists in relation to carriage, handling, storage, packing, or another service	The fact that cargo insurance indemnified the loss	Liability limits, contractual exclusions, or expiration of notice or litigation deadlines	Proceed with the insurance claim and preservation of rights in parallel

Comparison of the Structure of ICC1963, ICC1982, and ICC2009

The present ICC(A), ICC(B), and ICC(C) should not be mapped directly onto the 1963 clauses. The 1963 framework used All Risks, W.A., and F.P.A., while the 1982 revision introduced the A, B, and C structure that continues in the 2009 clauses.

Comparison Axis	ICC1963	ICC1982	ICC2009	Practical Implication
Classification of Basic Conditions	All Risks, W.A., and F.P.A.	ICC(A), ICC(B), and ICC(C)	Maintains ICC(A), ICC(B), and ICC(C)	Do not match the 1963 and current versions by name alone
Structure of Risks Covered	Traditional wording based on the S.G. Policy Form	RISKS COVERED organized in Articles 1 through 3	Maintains the 1982 structure with updated wording	Confirm the applicable edition and final insurance policy
Broad Coverage Condition	All Risks	ICC(A)	ICC(A)	Similar labels do not mean identical exclusions or insurance-period wording
Listed-Peril Conditions	Separate W.A. and F.P.A. structures	Reorganized as ICC(B) and ICC(C)	Maintains ICC(B) and ICC(C)	Do not equate W.A. directly with ICC(B) or F.P.A. directly with ICC(C)
General Average and Salvage Charges	Addressed through the older clauses and S.G. Policy Form	Systematized in Article 2	Maintains the basic Article 2 structure	Treat these as expense liabilities distinct from direct cargo damage
Both to Blame Collision Clause	Appeared as a separate provision in the later part of the relevant wording	Placed in Article 3	Maintains the basic Article 3 structure	Review it when a claim is made under the contract of carriage

Decision Flow for RISKS COVERED

When handling a cargo incident, the order of review should remain consistent: applicable insurance wording, facts of damage, cause, Article 1 coverage, insurance period, exclusions and endorsements, Articles 2 and 3, and preservation of rights.

Step	Key Question	Documents to Check	Warning Signs Requiring Further Review	Next Action
1 Identify the Insurance Contract	Is the cargo insured under ICC(A), ICC(B), or ICC(C)?	Insurance policy, certificate, and endorsement schedule	Quotation terms differ from the final policy	Confirm the wording and endorsements ultimately incorporated
2 Confirm the Facts of Damage	What was damaged, to what extent, and when?	Photographs, inspection records, quantity and weight records, and survey report	Physical damage and economic loss are combined in one claim	Separate each claim item by the type of loss
3 Formulate Possible Causes	Was the cause fire, collision, water ingress, handling damage, or another event?	Incident reports, container records, vessel information, and transport records	The cause is inferred only from the appearance of damage	Keep multiple possible causes open and obtain further evidence
4 Cross-Reference Article 1	Does the incident fall within the applicable coverage structure?	Applicable wording, cause documentation, and damage records	No listed peril can be identified under ICC(B) or ICC(C)	Obtain additional objective evidence of causation
5 Confirm the Insurance Period	Did the operative cause occur during the insurance period?	Gate-out, gate-in, loading, unloading, delivery, and receipt records	Only the date of discovery is known	Identify the last confirmed intact point and first abnormal point
6 Check Exclusions and Endorsements	Do Articles 4 through 7 or any special endorsements apply?	Exclusion provisions, Institute War Clauses, Institute Strikes Clauses, and malicious-damage endorsements	Coverage is assumed solely because a listed peril is identified	Cross-check each proposed cause against exclusions and endorsements
7 Confirm Articles 2 and 3	Are general average, salvage charges, or a Both to Blame Collision Clause claim involved?	General average declaration, B/L, adjuster’s notice, and carrier demand	Physical damage and contractual expense liabilities are combined	Separate the claims and notify the insurer under each relevant Article
8 Preserve Rights Against Third Parties	Can carrier and service-provider notice deadlines be met?	Claim Letter, B/L terms, delivery records, and service contracts	Notification is delayed while awaiting the insurer’s decision	Proceed with the insurance claim and reservation of rights simultaneously

Basic Structure of Article 1: Risks Covered

Article 1 defines which perils causing loss of or damage to the insured cargo are covered by the insurance.

The approach differs between ICC(A) and ICC(B) or ICC(C). ICC(A) broadly covers loss of or damage to the cargo, subject to the exclusions in Articles 4 through 7.

ICC(B) and ICC(C), by contrast, require the loss or damage to correspond to a peril or damage type expressly listed in Article 1. The mere fact that damage was discovered during transport does not establish Article 1 coverage.

Risks Covered under ICC(A)

ICC(A) provides broad coverage for loss of or damage to insured cargo, subject to the exclusions set out in Articles 4 through 7.

Although ICC(A) is commonly described as an all-risks condition, this does not mean that every loss is unconditionally recoverable. Physical loss or damage, the insurance period, exclusions, insurable interest, and the amount of loss must still be established.

Where the precise cause cannot be identified, coverage may still be considered if the evidence demonstrates that physical loss or damage occurred during the insurance period. The absence of a fully identified cause does not itself guarantee coverage.

Potential exclusions such as ordinary wear and tear, inherent vice or nature of the cargo, inadequate packing, delay, unsuitable containers, war, strikes, or terrorism must be checked against Articles 4 through 7.

Verification Axis	Circumstances Supporting Coverage	Circumstances Requiring Careful Review	Main Documentation	Practical Response
Physical Damage	Breakage, wet damage, loss, or another physical change is established	Only price decline, delayed delivery, lost profit, or another economic loss is claimed	Photographs, inspection reports, and survey reports	Separate physical loss or damage from consequential economic loss
Time of Occurrence	The cargo changed from an intact condition to a damaged condition during the insurance period	The damage was first discovered only after delivery or subsequent storage	In-gate records, delivery records, receipts, and inspection records	Identify the last point at which the cargo was confirmed intact
Cause of Damage	Evidence shows an external event affecting the cargo	The cause may arise from the cargo itself, packing, or ordinary wear and tear	Incident reports, container records, and temperature and humidity data	Compare each potential cause against the exclusion provisions
Packing and Cargo Characteristics	Suitable packing and normal storage conditions are established	Insufficient securing, inadequate moisture protection, or natural deterioration is possible	Packing specifications, SDS, and product specifications	Review Articles 4.3 and 4.4 separately
Transport Segment	The evidence points to a specific insured transport segment	Multiple segments are involved and the time of occurrence remains unclear	EIR, CFS records, warehouse records, and delivery documents	Assess the insurance period and potential recovery target separately

Risks Covered under ICC(B)

ICC(B) covers the perils listed in Article 1. Article 1.1 applies where loss or damage is reasonably attributable to a listed event. Article 1.2 applies where loss or damage is caused by one of the specified perils.

The principal perils and damage types are as follows.

Category	Potentially Covered Peril or Damage	Causal Relationship to Confirm	Key Documentation	Practical Notes
Article 1.1.1	Fire or explosion	Whether the loss or damage is reasonably attributable to fire or explosion	Fire reports, photographs, firefighting records, and vessel records	Separate heat, smoke, and extinguishing-water damage by cause
Article 1.1.2	Stranding, grounding, sinking, or capsizing of a vessel or craft	Relationship between the marine casualty and cargo damage	Marine casualty reports, vessel movement records, and general average notices	Do not presume that every cargo loss resulted from the casualty
Article 1.1.3	Overturning or derailment of land conveyance	Whether the damage resulted from the overturning or derailment	Accident certificate, vehicle records, and police report	Distinguish the event from normal vibration or sudden braking
Article 1.1.4	Collision or contact of a vessel, craft, or conveyance with an external object other than water	Whether the collision or contact caused the cargo damage	Collision records and vessel or vehicle reports	Contact with water alone does not fall within this provision
Article 1.1.5	Discharge of cargo at a port of distress	Whether the damage is reasonably attributable to the discharge at the port of distress	Discharge instructions, port records, and casualty reports	Distinguish the operation from ordinary transshipment
Article 1.1.6	Earthquake, volcanic eruption, or lightning	Relationship between the natural event and the damage	Official records and port or warehouse reports	Distinguish these events from ordinary adverse weather
Article 1.2.1	General average sacrifice	Whether the sacrifice was intentionally and reasonably made for the common safety	General average declaration and adjustment documents	Distinguish the sacrifice from a general average contribution under Article 2
Article 1.2.2	Jettison or washing overboard	Whether jettison or washing overboard directly caused the loss	Vessel reports, sea-condition records, and stowage records	Distinguish these events from unexplained shortage or ordinary loss
Article 1.2.3	Ingress of seawater, lake water, or river water into a vessel, craft, hold, conveyance, container, or place of storage	Whether the specified water entered the relevant place and caused the cargo damage	Water testing, salinity testing, container photographs, and survey reports	Distinguish ingress from condensation or moisture originating within the cargo
Article 1.3	Total loss of one package dropped overboard or dropped while loading onto or unloading from a vessel or craft	Whether the incident occurred during the specified operation and caused total loss of one package	Loading and unloading records, tally reports, and photographs	Distinguish total loss from partial damage and from land-side handling incidents

Risks Covered under ICC(C)

ICC(C) is also a listed-peril condition, but the standard ICC(C) wording provides narrower coverage than ICC(B).

The principal perils under standard ICC(C) are fire or explosion; stranding, grounding, sinking, or capsizing of a vessel or craft; overturning or derailment of land conveyance; collision or contact of a vessel, craft, or conveyance with an external object other than water; discharge at a port of distress; general average sacrifice; and jettison.

Earthquake, volcanic eruption, lightning, washing overboard, ingress of seawater, lake water, or river water, and total loss of one package during loading or unloading are not included in Article 1 of standard ICC(C).

Actual policies may nevertheless contain insurer-specific endorsements adding perils not included in standard ICC(C). The final insurance policy and incorporated endorsements must therefore be checked rather than relying on the ICC(C) label alone.

Comparison of Coverage Scope: ICC(A), ICC(B), and ICC(C)

The following table compares the standard Article 1 coverage under ICC2009. Individual endorsements may modify the result.

Peril or Damage Example	ICC(A)	ICC(B)	Standard ICC(C)	Practical Point
Fire or explosion	Potentially covered	Listed peril	Listed peril	Confirm the causal relationship with the fire or explosion
Stranding, grounding, sinking, or capsizing	Potentially covered	Listed peril	Listed peril	Confirm the connection between the marine casualty and cargo damage
Overturning or derailment of land conveyance	Potentially covered	Listed peril	Listed peril	Distinguish the event from normal vibration or sudden braking
Collision or contact with an external object	Potentially covered	Listed peril	Listed peril	Contact with water is not included under this item
Discharge at a port of distress	Potentially covered	Listed peril	Listed peril	Distinguish it from ordinary transshipment operations
Earthquake, volcanic eruption, or lightning	Potentially covered	Listed peril	Not included in standard ICC(C)	Check whether an endorsement adds the peril
General average sacrifice	Potentially covered	Listed peril	Listed peril	Distinguish it from the general average contribution under Article 2
Jettison	Potentially covered	Listed peril	Listed peril	Obtain the relevant vessel records
Washing overboard	Potentially covered	Listed peril	Not included in standard ICC(C)	Distinguish it from unexplained loss
Ingress of seawater, lake water, or river water	Potentially covered	Listed peril	Not included in standard ICC(C)	Confirm the source of the water and the point of ingress
Total loss of one package during loading or unloading	Potentially covered	Listed damage type	Not included in standard ICC(C)	Confirm the place, operation, timing, and total-loss requirement
Breakage or wet damage of unknown cause	Potentially covered subject to exclusions and other conditions	Difficult unless a listed peril can be established	Difficult unless a listed peril can be established	Evidence concerning the incident segment and cause is critical

Distinguishing Standard ICC(C) from Individual Endorsements

Some insurers attach endorsements to ICC(C) that add coverage for matters such as total loss caused by washing overboard, total loss of one package during loading or unloading, or total loss resulting from water ingress.

In such contracts, actual coverage may be broader than standard ICC(C). The additional peril, any total-loss requirement, and the scope of the extension depend on the wording of the endorsement.

It is therefore incorrect to state either that water ingress is always excluded under ICC(C) or that every domestic ICC(C) policy automatically includes extended coverage. The final policy, endorsement schedule, and contract details must be reviewed.

Decision Framework for Damage of Unknown Cause

Where the cause is unknown, the physical result, possible incident segment, applicable ICC condition, and potential exclusions must be separated. Coverage or exclusion cannot be decided solely because the cause remains unidentified.

Verification Axis	Direction under ICC(A)	Direction under ICC(B) and ICC(C)	Main Reference Materials	Practical Point
Physical Damage	Determine whether physical loss or damage occurred during the insurance period	Establish both physical damage and a connection to a listed peril	Photographs, inspection records, and survey reports	Distinguish physical loss from price depreciation
Incident Segment	Determine where within the insurance period the condition changed	Identify a segment in which a listed peril could have occurred	EIR, CFS records, delivery documents, and receipts	Identify the last confirmed intact point
External Event	Check for an external event and possible exclusions	Connect the damage to fire, collision, water ingress, or another listed peril	Container records and vessel or vehicle incident information	Do not infer the cause solely from the appearance of damage
Packing and Cargo Characteristics	Check exclusions such as Articles 4.3 and 4.4	Check exclusions separately even where a listed peril is established	Packing specifications, SDS, and temperature and humidity data	Review covered perils and exclusions together
Insufficient Evidence	Supplement missing records and reconstruct when the damage occurred	Prioritize objective evidence supporting a listed peril	Incident notices, work records, and statements from involved parties	Do not allow carrier-notification deadlines to expire

Relation to Cases Where the Incident Segment Is Unclear

When the cause is unknown, the segment in which the damage occurred is often also unclear. Whether the damage occurred during ocean carriage, port handling, CFS operations, warehouse storage, bonded storage, inland delivery, or post-delivery storage affects both the insurance period and the potential recovery target.

The investigation should identify the last point at which the cargo was confirmed intact and the first point at which an abnormal condition was recorded.

Time or Segment	Condition to Confirm	Main Documents	Relation to RISKS COVERED	Effect on Liability Assessment
Packing and Shipment	Whether the cargo and packing were intact	Packing photographs, inspection records, and packing list	Check for pre-inception damage and the packing exclusion	Shipper or packing-contractor liability
Container In-Gate	Outer condition, seal condition, and container condition	EIR, in-gate remarks, and photographs	Separate the condition before and after commencement of ocean carriage	Terminal or carrier liability
Ocean Carriage and Transshipment	Marine casualty, heavy weather, collision, or abnormal handling	Vessel incident information and transshipment records	Check for listed perils under ICC(B) and ICC(C)	Shipping line or Actual Carrier liability
CFS and Warehouse Handling	Condition during devanning, sorting, and re-vanning	CFS records, tally records, and surveillance footage	Determine whether handling damage occurred during the insurance period	Warehouse or stevedoring-contractor liability
Inland Delivery and Handover	Outer condition, quantity, and cargo condition at delivery	Delivery note, receipt, and delivery photographs	Confirm the end of the insurance period	Inland carrier or consignee liability

Reciprocal Verification Between RISKS COVERED and Exclusion Provisions

Article 1 and Articles 4 through 7 should not be reviewed once in isolation. Each possible cause should be tested against both the coverage provisions and the exclusions.

For example, wet cargo inside a container may result from seawater ingress, rainwater ingress, condensation, moisture originating within the cargo, inadequate packing, or container unsuitability. Each hypothesis produces a different combination of Article 1 coverage and exclusion analysis.

Appearance of Damage	Potential Covered Perils	Potential Exclusions	Evidence to Confirm	Decision Point
Wet Damage	Water ingress, heavy weather, or container casualty	Inherent vice or nature, inadequate packing, or container unsuitability	Salinity testing, holes, condensation marks, temperature, and humidity	Do not determine the cause from the wet appearance alone
Internal Breakage	Collision, overturning, or dropping during handling	Inadequate packing or ordinary wear and tear	Impact records, wooden-crate condition, securing method, and outer packaging	Do not rule out an accident solely because the outer packaging appears intact
Mold or Deterioration	Cooling failure or water ingress	Inherent vice or nature, delay, or inadequate packing	Temperature and humidity records, storage conditions, and transport schedule	Allow for multiple competing causes
Quantity Shortage	Jettison, washing overboard, total loss during handling, misdelivery, or theft	Ordinary leakage or weight loss	Origin and destination weighing, seal records, outer packaging, and tally records	Distinguish measurement differences from physical loss
Quality Deterioration after Prolonged Storage	An external incident during storage	Delay or inherent vice or nature	Incident records, temperature data, and storage conditions	Do not apply the delay exclusion based solely on the passage of time

Basic Structure of Article 2: General Average and Salvage Charges

Article 2 covers general average contributions and salvage charges adjusted or determined in accordance with the contract of carriage, governing law, and applicable practice.

The coverage concerns general average and salvage charges incurred to avoid, or in connection with avoiding, loss from a covered peril, subject to the exclusions in Articles 4 through 7.

General average sacrifice and general average contribution must be distinguished. A general average sacrifice is an intentional and reasonable sacrifice of cargo or other property for the common safety and is also addressed in Article 1.2.1 of ICC(B) and ICC(C). A general average contribution, addressed principally by Article 2, is the amount allocated among the relevant interests for recognized sacrifices and expenses.

Item	Description	Is Direct Cargo Damage Required?	Main Documents	Practical Response
General Average Sacrifice	Intentional and reasonable sacrifice of cargo or other property for the common safety	Direct sacrificial damage to the cargo interest may occur	General average declaration, vessel report, and survey report	Separate the Article 1 cargo loss from the Article 2 contribution
General Average Contribution	Allocation among the relevant interests of recognized general average sacrifices and expenses	A contribution may arise even if the cargo is undamaged	Adjuster’s notice, cargo valuation documents, and adjustment statement	Notify the insurer promptly
Salvage Charges	Remuneration payable for saving a vessel, cargo, or other property from marine peril	Direct cargo damage is not essential	Salvage contract, award or agreement, and salvage-charge demand	Do not confuse salvage charges with general average expenses
Cargo-Release Security	Bond or guarantee required before the carrier releases the cargo	Required regardless of whether the cargo is physically damaged	General Average Bond and General Average Guarantee	Confirm the required form, signature, and recipient
Final Adjustment	The general average adjuster calculates the final contribution of each interest	The adjustment is separate from direct cargo-damage compensation	General average adjustment statement and valuation documents	Distinguish provisional security from the final contribution

Response Flow after a General Average Declaration

Step	Details to Verify	Party to Confirm With	Main Documents	Action if an Issue Arises
1 Confirm the Declaration	Vessel, voyage, incident, and appointed adjuster	Shipping line, NVOCC, and overseas agent	General average notice	Confirm that the cargo and B/L number are within the declaration
2 Notify the Insurer	Applicable insurance contract and security arrangements	Insurance company or insurance agent	Insurance policy, B/L, and invoice	For uninsured cargo, confirm whether cash security or another guarantee is required
3 Prepare Cargo-Release Documents	Bond, guarantee, and cargo valuation documents	General average adjuster and shipping line	Specified forms and cargo valuation documents	Check format, authorized signature, submission method, and deadline
4 Obtain Cargo Release	Acceptance of security and release authorization	Shipping line, terminal, and warehouse	Security receipt and cargo-release documents	Confirm storage charges and any other separate expenses
5 Complete the Final Adjustment	Contribution, cargo value, and insurance claim	General average adjuster and insurer	General average adjustment statement	Reconcile the provisional security with the final contribution

Basic Structure of Article 3: Both to Blame Collision Clause

Article 3 covers liability incurred by the assured under the Both to Blame Collision Clause in the contract of carriage.

The coverage is limited to liability relating to a peril covered by the relevant cargo insurance. The occurrence of a vessel collision alone does not automatically entitle the assured to indemnity under Article 3.

If a carrier makes a claim under the Both to Blame Collision Clause, the assured must notify the insurer. The insurer is entitled, at its own expense, to defend the assured against that claim.

The assured, NVOCC, or freight forwarder should therefore avoid admitting liability, approving the claim, agreeing to settlement, or making payment before notifying the insurer and obtaining instructions.

Verification Point	Details to Confirm	Primary Documents	Common Error	Practical Response
Basis of Claim	Whether the demand is based on the Both to Blame Collision Clause	B/L, contract of carriage, and claim demand	Treating every collision-related demand as an Article 3 claim	Confirm the contractual provision and calculation basis
Relationship to Insurance	Whether the asserted liability relates to a covered peril	Insurance policy and casualty documents	Assuming Article 3 applies even where the liability is unrelated to insured cargo risk	Check Article 1, exclusions, and the relevant policy conditions
Notification	Whether the insurer was notified promptly after receipt of the demand	Incident notice, demand letter, and email records	Contacting the insurer only after negotiations with the carrier	Issue a preliminary notification immediately
Admission of Liability	Whether the assured has approved, admitted, or settled the claim	Settlement proposal, correspondence, and payment agreement	Paying first for commercial reasons without insurer approval	Preserve the insurer’s right to defend the claim
Master B/L and House B/L Relationship	Which contract of carriage creates the claim and against which party	Master B/L, House B/L, and claim correspondence	Confusing a shipping-line claim against the NVOCC with an NVOCC claim against the cargo owner	Map each claim to the relevant contract and party

Division of Roles with Related Articles and Contracts

RISKS COVERED alone does not finally determine whether indemnity is payable or which transport party is liable. The following subjects must be reviewed separately.

Issue	Confirmed under RISKS COVERED	Confirmed under Related Articles or Contracts	Crucial Distinction	Related Article
Article 1 and Articles 4 through 7	Whether the incident falls within a covered peril	Whether the cause is excluded from coverage	The coverage entry point and an exclusion are separate stages	Basic Structure of ICC2009 Exclusion Clauses
Article 1 and Articles 8 through 10	Which perils are covered	Whether the peril operated during the insurance period	The type of peril and its temporal scope are separate issues	Basic Structure of the ICC2009 Insurance Period Clause
Article 1 and Articles 11 through 14	Whether the loss or damage falls within a covered peril	Claimant status, forwarding charges, constructive total loss, and increased value insurance	The cause of coverage and the conditions for claiming are separate matters	Basic Structure of ICC2009 Claims Clauses
Article 1 and Article 15	Whether a peril is covered under the cargo insurance	Whether the insurance may benefit a carrier or other bailee	Coverage for the assured and benefit to a carrier are separate issues	What the ICC2009 Benefit of Insurance Clause Means
Article 2 and General Average Practice	Coverage of general average contributions and salvage charges	General Average Bond, General Average Guarantee, adjustment, and cargo release	Insurance coverage and general average procedures are separate processes	Articles on General Average and General Average Guarantees
Article 3 and B/L Liability	Coverage of liability under the Both to Blame Collision Clause	The carrier’s contractual basis, governing law, and collision liability	Insurance coverage and carrier liability under the contract of carriage are separate issues	B/L Terms and Conditions, Governing Law, and Carrier Liability

Common Practical Problem Cases

Identical damage appearances may lead to different conclusions depending on the applicable ICC condition, the cause, and the transport segment. Covered perils, exclusions, the insurance period, and third-party liability should be checked in parallel.

Case	Potential Issue	Documents to Verify	Practical Note
Unexplained machinery breakage under ICC(A)	Whether the damage occurred during the insurance period or resulted from inadequate packing	Packing photographs, in-gate and delivery records, and survey report	Do not assume automatic coverage solely because the cause is unknown
Seawater damage inside a container under ICC(B)	Whether ingress under Article 1.2.3 can be demonstrated	Salinity test, container holes, door seals, and photographs	Distinguish the loss from condensation or inadequate packing
Wet damage of unknown cause under standard ICC(C)	No evidence connects the damage to a listed peril	Casualty information, container records, and endorsement schedule	Check whether any endorsement extends standard ICC(C)
Wooden crate dropped into the sea during unloading	Whether one package suffered total loss or only partial damage	Handling records, photographs, and tally report	Check the location, operation, and total-loss requirements of Article 1.3
General average declared after a vessel fire	Direct cargo damage and general average liabilities are combined	General average notice, insurance policy, and cargo valuation documents	Separate Article 1 damage from Article 2 contributions
Cargo is undamaged but general average security is required	The cargo owner assumes the matter is unrelated to insurance because there is no physical damage	General Average Bond, General Average Guarantee, and adjuster’s notice	Prioritize the cargo-release deadline
Contractual claim received from a shipping line after collision	Whether the demand falls within Article 3	B/L, demand, calculation, and collision notice	Notify the insurer before acknowledging liability
Quantity shortage of unknown cause	Distinguishing ordinary loss from mishandling, misdelivery, jettison, washing overboard, or theft	Origin and destination weighing, seal records, tally records, and casualty information	Do not decide coverage or exclusion from the quantity difference alone

Comparison Table of Freight Forwarder Involvement

A freight forwarder involved in insurance arrangements or incident handling does not necessarily have authority to determine final coverage. The scope of support and the matters that should not be conclusively decided must be separated according to the contractual role.

Category	Support That May Be Provided	Matters Not to Be Definitively Determined	Practical Response
Contracting Carrier	Providing the House B/L, transport route, information on carriers engaged as subcontractors, and accident and transshipment records	Final insurance coverage, ultimate applicability of Article 1, or absence of its own carrier liability	Separate insurance-claim support from responses concerning carrier liability
Actual Carrier	Providing vessel, vehicle, handling-incident, container-condition, and marine-casualty records	Unilaterally determining inherent vice or nature of the cargo or inadequate packing	Separate observed facts from admission or denial of liability
Simple Intermediary	Contacting the insurer and carrier, forwarding documents, and assisting with survey arrangements	Guaranteeing coverage or assuming authority to act for the assured in an insurance claim	State the scope of the engagement and the existence or absence of agency authority
Agent / Coordinator for Specific Operations	Coordinating inspections, quotations, general average documents, cargo release, and onward transport	Guaranteeing acceptance of general average security or coverage of any particular expense	Record instructions and approvals from the insurer and general average adjuster
Provider of Ancillary Services for Packing, Storage, Inspection, etc.	Providing work records, photographs, weighing data, temperature and humidity data, and inspection results	Making the final determination of cause, insurance coverage, or carrier liability	Separate observed facts from opinions and assumptions

For a Simple Intermediary, an Agent / Coordinator for Specific Operations, or a provider of ancillary packing, storage, or inspection services, the scope of engagement may not be defined adequately by transport-document liability rules alone. It is therefore useful to incorporate standard trading terms into quotations, master agreements, and individual instructions in advance, expressly addressing the scope of responsibility, liability limits, exclusions, indirect loss, notice deadlines, time bars, and protection of subcontractors.

The issuance of an FCR or a mere reference to standard trading terms does not automatically incorporate those terms into the contract. Prior presentation and agreement, priority over individual terms, and the application of mandatory law must be confirmed.

Decision Checklist

Uncertainty over coverage must not delay incident notification, general average handling, or preservation of rights against carriers and other parties.

Situation for Confirmation	Party to Confirm With	Points to Confirm	Action if an Issue Arises
Immediately after discovery	Shipper, warehouse, and carrier	Date, time, place, outer packaging, cargo condition, and quantity	Do not conclude the cause; preserve the cargo, photographs, and records
When confirming insurance terms	Insurer, insurance agent, and insurance administrator	ICC(A), ICC(B), or ICC(C), endorsements, and deductible	Check the final policy rather than relying on the quotation
When identifying a cause under ICC(B) or ICC(C)	Carrier, surveyor, and local agent	Objective facts corresponding to a listed peril	Do not force a conclusion while the cause remains unknown; obtain further evidence
When the incident segment is unclear	Carriers for each segment, warehouse, and consignee	Last confirmed intact point and first recorded abnormal point	Prepare a timeline and confirm the insurance period
When investigating wet damage	Surveyor, warehouse, and carrier	Type of water, point of ingress, condensation, and packing condition	Use salinity or other testing to identify the water source
When general average is declared	Insurer, shipping line, and general average adjuster	General Average Bond, General Average Guarantee, cargo value, and deadline	Arrange security in time to avoid delaying cargo release
When salvage charges are demanded	Insurer, adjuster, and shipping line	Salvage contract, award or agreed amount, and subject cargo	Record salvage charges separately from general average contributions
When a claim is made under the Both to Blame Collision Clause	Insurer, carrier, and legal adviser where necessary	B/L provision, basis of claim, calculation, and response deadline	Notify the insurer before any admission, payment, or settlement
When reviewing an ICC(C) endorsement	Insurer and insurance agent	Perils or damage types added beyond standard ICC(C)	Confirm all total-loss and causation requirements in the endorsement
When preserving rights against third parties	Carrier, NVOCC, warehouse operator, and stevedore	Notice deadlines, reservation of rights, time bars, and evidence	Send the Claim Letter without waiting for the insurer’s final assessment

Common Misconceptions

Coverage errors often arise when the ICC condition or the appearance of damage is treated as sufficient to decide the claim.

Common Misconception	Actual Consideration	Practical Precaution
ICC(A) covers every type of loss	ICC(A) still requires physical loss or damage, operation during the insurance period, and absence of an applicable exclusion	Do not treat all-risks coverage as unconditional insurance
Damage of unknown cause is always payable under ICC(A)	Inadequate packing, inherent vice or nature, ordinary wear and tear, or another exclusion may apply	Confirm the time of occurrence and potential exclusions
ICC(B) and ICC(C) are almost the same	They differ in relation to earthquake, water ingress, washing overboard, and total loss of one package during loading or unloading	Compare each item listed in Article 1
Any damage occurring during transport is covered under ICC(B) or ICC(C)	The loss must correspond to a listed peril or listed damage type	Establish the cause through objective evidence
Water ingress can never be covered under ICC(C)	It is not included in standard ICC(C), but an endorsement may add coverage	Check the final policy and endorsement schedule
Every wet-damage case falls within water ingress under ICC(B)	Ingress of seawater, lake water, or river water into a specified place must be established	Distinguish ingress from condensation or moisture originating within the cargo
General average matters only if the cargo is physically damaged	General average security and contributions may arise even where the cargo is undamaged	Check cargo-release requirements immediately
General average sacrifice and general average contribution are the same	The former is a sacrifice made for the common safety; the latter is an allocation among the relevant interests	Separate Article 1 from Article 2
The Both to Blame Collision Clause concerns only shipping lines	A claim under the contract of carriage may be asserted against the assured	Notify the insurer immediately upon receipt of the claim
Once cargo insurance is in place, notice to the carrier is unnecessary	Rights must be preserved for insurer subrogation and any uninsured or residual cargo claim	Proceed with the insurance claim and Claim Letter in parallel

Practical Scenario 1: Unexplained Wet Damage under ICC(C)

Consider imported cargo insured under standard ICC(C) where wet cartons are discovered when the container is opened.

Under standard ICC(C), wet damage by itself does not establish coverage. The evidence must be examined for a connection with fire, grounding, capsizing, collision, discharge at a port of distress, or another listed peril.

The final policy must also be checked for an endorsement extending coverage to water ingress or another relevant peril. Where an endorsement applies, the type of water, point of ingress, total-loss requirement, and other conditions must be tested against its wording.

Relevant evidence includes container photographs, holes, door-seal condition, floor condition, salinity testing, EIR, voyage-casualty information, and a survey report. The claim should identify whether it relies on standard ICC(C) or an additional endorsement.

Practical Scenario 2: Suspected Seawater Ingress under ICC(B)

If cargo insured under ICC(B) is found wet and salt residue is detected inside the container, Article 1.2.3 becomes a possible basis for coverage.

The presence of salt on the cargo alone is insufficient. It must be established that seawater, lake water, or river water entered the vessel, craft, hold, conveyance, container, or place of storage and caused the cargo damage.

The investigation should cover holes, corrosion, door seals, water marks, floor and roof condition, outer container condition, and the condition during vanning. Salt inherent in the cargo, earlier contamination, condensation, and inadequate moisture protection should not be excluded prematurely.

Practical Scenario 3: General Average Declaration

When general average is declared after vessel fire, grounding, or another marine casualty, the cargo owner may be required to provide a General Average Bond or General Average Guarantee before cargo release, even where the cargo itself is undamaged.

The freight forwarder coordinates with the shipper, insurer, shipping line, NVOCC, and general average adjuster regarding required forms, recipient, cargo value, insurance details, and submission deadline.

For insured cargo, the insurer may issue a General Average Guarantee. For uninsured cargo, the carrier or adjuster may require cash security or another form of guarantee.

The provisional security required for cargo release is separate from the final general average contribution determined later. These two stages must not be confused.

Practical Scenario 4: Claim under the Both to Blame Collision Clause

After a vessel collision, a carrier may present a demand under the Both to Blame Collision Clause in the B/L. The assured should notify the insurer before admitting the demand or agreeing to payment.

The relevant documents include the Master B/L, House B/L, carrier’s demand, calculation, collision notice, cargo-damage documents, and insurance policy.

Where an NVOCC is involved, the shipping line’s claim against the NVOCC must be separated from any NVOCC claim against the cargo owner. Each demand should be mapped to the contract of carriage and provision on which it relies.

Article 3 does not cover every cost connected with a collision. The relationship to an insured peril, the contractual liability asserted, and the insurer’s right to defend must all be confirmed.

Practical Scenario 5: Damage of Unknown Cause under ICC(A)

Consider machine parts insured under ICC(A) that are found damaged when unpacked at delivery, although no particular transport accident has been identified.

Under ICC(A), the absence of an identified cause does not require the claim to be abandoned. It also does not establish automatic coverage.

The evidence should be arranged chronologically from packing, wooden-crate and pallet condition, securing, container in-gate, ocean carriage, CFS handling, inland delivery, and condition at delivery.

Potential causes such as inadequate packing, inherent vice or nature, ordinary transport vibration, damage outside the insurance period, and post-delivery damage should be examined while collecting evidence that the cargo changed from an intact to a damaged condition during the insurance period.

Summary

The RISKS COVERED under ICC2009 consist of Article 1 Risks, Article 2 General Average and Salvage Charges, and Article 3 Both to Blame Collision Clause.

Article 1 defines the coverage structures of ICC(A), ICC(B), and ICC(C). ICC(A) broadly covers loss of or damage to cargo, subject to exclusions. ICC(B) and ICC(C) require the loss or damage to fall within a peril or damage type listed in Article 1.

ICC(B) and standard ICC(C) differ in relation to earthquake, volcanic eruption, lightning, washing overboard, water ingress, and total loss of one package during loading or unloading. Because an individual ICC(C) policy may include additional endorsements, the final policy and endorsement schedule must be checked.

For breakage, wet damage, or shortage of unknown cause, the applicable ICC condition, transport segment, last confirmed intact point, first recorded abnormal point, and potential exclusions must be organized. Under ICC(B) and ICC(C), objective evidence establishing a causal connection with a listed peril is particularly important.

Article 2 covers general average contributions and salvage charges. General average security and cargo release may become relevant even when the cargo has not suffered direct physical damage.

Article 3 addresses indemnity and notification where a carrier asserts a claim under the Both to Blame Collision Clause. The insurer must be notified before any admission of liability, payment, or settlement.

Whether cargo insurance covers the loss is separate from whether liability may be pursued against a carrier, NVOCC, freight forwarder, warehouse operator, stevedore, packing contractor, or other party. Insurance claims and preservation of rights against third parties should proceed concurrently.

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 wording.