Institute Cargo Clauses 1963

Overview

The Institute Cargo Clauses 1963 were standard cargo clauses used before the 1982 restructuring into ICC(A), ICC(B), and ICC(C).

The 1963 system divided cover into Institute Cargo Clauses (All Risks), Institute Cargo Clauses (W.A.), and Institute Cargo Clauses (F.P.A.).

ICC 1963 was not merely an older version of the present A, B, and C clauses. Each of the three clauses was expressly stated to be for use only with the S.G. Policy Form. The policy body, Memorandum, marginal and italic clauses, cargo clauses, War clauses, Strikes Riots and Civil Commotions clauses, and individual endorsements had to be read together.

All Risks should therefore not be mechanically treated as ICC(A), W.A. as ICC(B), or F.P.A. as ICC(C). The actual policy, percentage franchise, Particular Average provisions, specified casualties, General Average, Salvage Charges, and additional perils must be reviewed.

This article explains the structure of ICC 1963, the differences among All Risks, W.A., and F.P.A., their connection with the S.G. Policy Form, and the practical method for reviewing an old policy.

Specific Scope of This Article

Item	Matters Covered in This Article	Matters Covered in Other Articles
Position of ICC 1963	Old clause system used with the S.G. Policy Form	The overall insurance system is addressed in Ocean Marine Cargo Insurance
All Risks	Clause 5 all-risks grant and absence of percentage franchise	Current ICC(A) is addressed in the A, B, and C comparison article
W.A.	Percentage franchise and Particular Average cover	Current ICC(B) is addressed separately
F.P.A.	Free from Particular Average and stated exceptions	Current ICC(C) is addressed separately
Memorandum and franchise	Historical percentage structure	Modern deductibles and claim calculations are addressed separately
Specified casualties	Stranding, sinking, burning, fire, explosion, and collision	Detailed causation is addressed in covered-risk articles
Duration	Clauses 1, 2, and 4 of the 1963 wording	Modern duration is addressed in Duration of Marine Cargo Insurance
General Average and salvage	Clause 7 and expenses relevant even under F.P.A.	Expense categories are addressed in Costs and Expenses in Ocean Cargo Insurance
Exclusions	Delay, inherent vice, War, Strikes, and other old-wording issues	Current exclusions are addressed in Excluded Losses under Cargo Marine Insurance
ICC 1982 and ICC 2009	Outline of the historical transition	The current wording and changes are addressed in specialist articles
MIA 1906	Basic connection with Section 55 and related principles	Detailed legal causation is addressed separately
Freight forwarder practice	Review of old policies, evidence, and authority limits	Carrier liability and insurance regulation are addressed separately

Situations in Which ICC 1963 May Still Be Relevant

Situation	Reason for Reviewing ICC 1963	Main Documents	Caution
Review of an old casualty	The policy in force incorporated the 1963 clauses	Original policy, clauses, and casualty evidence	Do not apply current ICC retrospectively
Long-term or archived agreements	An old base contract may remain unamended	Open Policy and endorsements	Identify the edition actually incorporated
Foreign insurance certificate	All Risks, W.A., or F.P.A. terminology may remain	Certificate and policy	Do not decide cover from the label alone
Old documentary-credit wording	A credit may require W.A. or F.P.A.	Credit and sales contract	Separate documentary compliance from actual cover
Historical litigation or recovery	The former wording and governing law may be disputed	Policy, B/L, and litigation file	Review the law applicable at the relevant time
Internal manuals using old terminology	Historic labels may remain in current forms	Manuals and quotations	Do not assert direct equivalence with modern clauses
Historical study of cargo insurance	The system explains Particular Average and percentage franchises	S.G. Policy Form and ICC 1963	Distinguish historical explanation from current practice

Relationship with the S.G. Policy Form

The original All Risks, W.A., and F.P.A. wordings each state that they are for use only with the S.G. Policy Form.

The clauses therefore did not operate as a complete stand-alone wording. The policy body and the attached provisions had to be read as a combined contractual package.

Document	Main Function	Practical Review	Risk of Omission
S.G. Policy Form	Basic insured perils and policy framework	Policy body, marginal terms, and deletions	The basic grant of cover may be misunderstood
Memorandum	Cargo-specific average restrictions and percentages	Cargo category and percentage	A small W.A. claim may be wrongly assessed
Institute Cargo Clauses	Transit, cargo condition, General Average, and related matters	All Risks, W.A., or F.P.A.	The three conditions cannot be distinguished
War provisions	Exclusion or reinstatement of War risks	Deletion of Clause 12 and attached War Clauses	War cover may be incorrectly assumed
Strikes provisions	Exclusion or reinstatement of Strikes and riot risks	Deletion of Clause 13 and separate clauses	Riot fire may be treated as ordinary fire
Extensions	Theft, rainwater, breakage, and other additional perils	TPND, RFWD, Breakage, and similar clauses	W.A. or F.P.A. may be overstated

Common Clauses in All Risks, W.A., and F.P.A.

Clause	Main Subject	Practical Meaning	Main Evidence
Clause 1	Transit Clause incorporating Warehouse to Warehouse	Attachment and termination of transit cover	Warehouse and delivery records
Clause 2	Termination of Adventure	Continuation following premature termination	Termination and notice records
Clause 3	Craft, raft, and lighter transit	Port and vessel-transfer transit	Port records
Clause 4	Change of Voyage	Held covered subject to an arranged premium	Notice and premium agreement
Clause 5	All Risks, W.A., or F.P.A. condition	Main difference in partial-loss cover	Policy and cause of loss
Clause 6	Constructive Total Loss	Abandonment and economic-total-loss test	Recovery and forwarding costs
Clause 7	General Average and Salvage Charges	Contribution and maritime salvage	Average Adjustment and salvage documents
Clause 8	Seaworthiness Admitted	Seaworthiness is admitted between the Assured and Underwriters	Knowledge and involvement of the Assured
Clause 9	Loss minimisation and preservation of recovery rights	Reasonable measures and third-party notices	Claim Notice and work records
Clause 10	Not to Inure	No benefit for a carrier or bailee	B/L and liability contract
Clause 11	Both to Blame Collision	Connection with certain shipowner claims	B/L and collision claim
Clause 12	War exclusions	Separate War cover must be reviewed	Policy and War Clauses
Clause 13	Strikes, riots, and civil commotions	Separate Strikes cover must be reviewed	Policy and casualty reports
Clause 14	Reasonable Despatch	The Assured must act with reasonable despatch	Delay and response records

All Risks

The 1963 All Risks Clause covered all risks of loss of or damage to the subject matter insured, but did not cover loss, damage, or expense proximately caused by delay or by inherent vice or nature of the cargo.

Claims recoverable under the clause were payable irrespective of percentage. The percentage franchise relevant to W.A. therefore did not apply to an otherwise recoverable All Risks claim.

War and Strikes risks remained excluded by Clauses 12 and 13 unless the required separate clauses were incorporated.

The 1963 All Risks Clause did not contain an express packing exclusion in the later ICC Clause 4.3 form. A packing dispute must therefore be analysed by reference to the complete policy, fortuity, proximate cause, inherent vice or nature, and the evidence.

Review Item	Basic Position under All Risks	Caution	Main Documents
Coverage method	Broad all-risks grant	The Assured must establish a fortuitous loss	Casualty report and survey
Percentage franchise	Recoverable claims are payable irrespective of percentage	Any separate deductible or endorsement must still be reviewed	Policy and endorsements
Delay	Loss or expense proximately caused by delay is not covered	A separate physical casualty during delay must be analysed separately	Transit schedule and casualty evidence
Inherent vice or nature	Loss generated by the cargo's own nature is not covered	Review whether an external accidental event occurred	Quality, temperature, and pre-shipment records
Packing	No express later Clause 4.3-style exclusion appears in Clause 5	Review fortuity, proximate cause, inherent vice, and the full policy	Packing design and impact evidence
War and Strikes	Excluded by Clauses 12 and 13	Review deletions and separate clauses	Complete policy documents

W.A.

W.A. means With Average and is commonly described as cover for Particular Average.

Clause 5 was free from average below the percentage stated in the policy, unless the loss was General Average or the vessel or craft had stranded, sunk, or burnt.

Notwithstanding the percentage warranty, the clause covered:

• The insured value of any package totally lost during loading, transshipment, or discharge
• Loss or damage reasonably attributable to fire or explosion
• Loss or damage reasonably attributable to collision or contact of vessel, craft, or conveyance with an external substance other than water
• Loss or damage reasonably attributable to discharge at a port of distress
• General Average and Salvage Charges

The stated percentage generally operated as a franchise rather than a deductible. Where the recoverable loss reached the franchise, the recoverable Particular Average was not limited to the amount above the percentage.

W.A. Review Item	Question	Effect on the Claim	Required Evidence
Percentage stated in the policy	Is the franchise 3%, 5%, or another percentage?	Determines whether ordinary Particular Average reaches the threshold	Original policy and Memorandum
Percentage of loss	Which value and adjustment unit apply?	Determines whether the franchise is reached	Insured value and loss calculation
General Average	Is the claim General Average rather than Particular Average?	It is treated separately from the percentage franchise	Average Adjustment
Stranding, sinking, or burning	Did a qualifying vessel or craft casualty occur?	The percentage restriction may cease to apply	Carrier and casualty records
Causation by a stated casualty	Was the damage caused by fire, explosion, collision, or contact?	The loss may be recoverable irrespective of percentage	Survey and casualty report
Total loss of a package	Was an entire package lost during loading, transshipment, or discharge?	The package may be recoverable even where other cargo is undamaged	Tally and handling record

F.P.A.

F.P.A. means Free from Particular Average. It was based on the exclusion of Particular Average unless the vessel or craft had stranded, sunk, or burnt.

F.P.A. did not mean that only a total loss could ever be recovered. Clause 5 also addressed:

• A package totally lost during loading, transshipment, or discharge
• Loss or damage reasonably attributable to fire or explosion
• Loss or damage reasonably attributable to collision or contact with an external substance other than water
• Loss or damage caused by discharge at a port of distress
• Certain landing, warehousing, and forwarding charges at an intermediate port
• General Average and Salvage Charges
• Actual or Constructive Total Loss where the relevant requirements were met

F.P.A. Review Item	Usual Position	Exception or Additional Review	Main Evidence
Ordinary partial cargo damage	Generally free from Particular Average	Review stranding, sinking, burning, and other stated exceptions	Casualty and carrier records
Total loss of a package	May be covered during loading, transshipment, or discharge	Confirm that the entire package was totally lost	Tally and handling report
Fire or explosion damage	Partial damage may be covered where reasonably attributable	A causal relationship with fire or explosion is required	Fire and carrier reports
Collision or contact damage	May be covered where caused by contact with an external substance other than water	Distinguish ordinary weather and water damage	Voyage report and survey
Discharge at a port of distress	Damage may be covered where reasonably attributable	Distinguish ordinary destination handling	Port-of-distress records
Special charges	Certain landing, warehousing, and forwarding expenses may be covered	Determine whether the expense would have been payable under an S.G. Policy with W.A.	Invoices and insurer approval
General Average and Salvage Charges	May be covered even where the cargo is undamaged	Review contribution value and underinsurance	Average Bond and Guarantee

Comparison of All Risks, W.A., and F.P.A.

Item	All Risks	W.A.	F.P.A.	Practical Caution
Basic approach	All-risks grant	Particular Average subject to percentage	Free from Particular Average	Do not map directly to A, B, and C
Clause 5	All risks, subject to delay and inherent-vice limitations	Percentage specified in the policy	Free from Particular Average	Clause 5 is the central difference among the three conditions
Percentage franchise	Recoverable claims payable irrespective of percentage	Generally applies	Not a percentage-based Particular Average cover	Review the policy and Memorandum
Ordinary accidental partial loss	Potentially recoverable	Subject to insured peril and percentage	Generally not recoverable	Identify the cause and unit of loss
Package totally lost during handling	Potentially recoverable	Expressly addressed	Expressly addressed	The whole package must be totally lost
Fire or explosion	Potentially recoverable	Recoverable where reasonably attributable	Partial loss may be recoverable where reasonably attributable	Prove the causal connection
Collision or contact	Potentially recoverable	Recoverable where the stated conditions are met	Recoverable where the stated conditions are met	Contact with water is not the stated exception
Stranding, sinking, or burning	Ordinary coverage analysis	May remove the percentage restriction	May remove the F.P.A. restriction	Review the old wording and governing law
General Average and salvage	Covered	Covered	Covered	Physical cargo damage is not required
Delay and inherent vice	Excluded	Excluded under the common wording and law	Excluded under the common wording and law	Review MIA 1906 Section 55
War and Strikes	Excluded by Clauses 12 and 13	Excluded by Clauses 12 and 13	Excluded by Clauses 12 and 13	Review separate clauses

Franchise and Deductible

A franchise eliminates a claim below the stated percentage. Once the recoverable loss reaches the franchise, the entire recoverable loss is generally taken into account.

A deductible, by contrast, is subtracted from the loss.

Method	Below Threshold	Above Threshold	Example	Caution
3% franchise	Generally no payment	The entire recoverable loss is considered	A 3.5% recoverable loss is not limited to 0.5%	Confirm insured peril and exclusions first
3% deductible	Usually within the deductible	3% is deducted from the loss	A 3.5% loss leaves 0.5%	Review the actual modern policy wording

The historic S.G. Policy Form Memorandum provided different average treatment, including percentages such as 3% or 5%, according to the type of cargo. The actual policy wording and any contractual amendments remain controlling.

Specified Casualties

Casualty	Possible Effect	Causation Issue	Caution
Stranding	May affect the W.A. percentage or F.P.A. restriction	The cause of cargo damage remains a separate issue	Review the legal meaning of stranding
Sinking	May affect the same restrictions	Distinguish sinking from temporary water entry	Review official vessel records
Burning of vessel or craft	May affect the same restrictions	Distinguish the vessel casualty from a small cargo fire	Review the old wording and facts
Fire or explosion	Loss reasonably attributable may be recoverable	A causal connection is required	Different from the stranding exception
Collision or contact	Damage reasonably attributable may be recoverable	The object must be other than water	Ordinary waves are not the stated event
Discharge at a port of distress	Damage from the emergency discharge may be recoverable	The loss must relate to the distress discharge	Distinguish ordinary destination handling

The occurrence of a specified casualty does not mean that every unrelated loss is automatically recoverable. The relevant Clause 5 provision, insured peril, other exclusions, and governing law must be identified.

Comparison with ICC 1982 and ICC 2009

Item	ICC 1963	ICC 1982	ICC 2009	Practical Meaning
Conditions	All Risks, W.A., and F.P.A.	ICC(A), ICC(B), and ICC(C)	ICC(A), ICC(B), and ICC(C)	The names are not interchangeable
Policy structure	Used with the S.G. Policy Form	Reorganised A, B, and C system	Updated 1982 system	Several old documents must be read together
Broad condition	All Risks	ICC(A)	ICC(A)	The exclusion structures differ
Restricted conditions	W.A. and F.P.A.	Named-perils ICC(B) and ICC(C)	Named-perils ICC(B) and ICC(C)	The coverage design is different
Partial-loss analysis	Particular Average and franchise	Named-perils analysis under B and C	Named-perils analysis under B and C	W.A. and F.P.A. are not direct equivalents
Duration	Warehouse to Warehouse and 60 days after final discharge	Reorganised Transit Clause	Revised ordinary-course-of-transit wording	Identify the edition applicable to the casualty
Exclusions	Distributed across the policy and attached clauses	Structured in Clauses 4 to 7	Revised Clauses 4 to 7	Do not apply current clause numbers to 1963
Piracy	Included in the Clause 12 exclusion	Excepted from the ICC(A) War Exclusion	Same basic ICC(A) structure	All Risks 1963 does not automatically cover piracy
Packing	No later Clause 4.3-style express exclusion	Express exclusion	Express exclusion with detailed conditions	Use the complete old contractual analysis

Relationship with MIA 1906

ICC 1963 operated within the traditional framework of the S.G. Policy Form and English marine insurance law.

MIA 1906 Section 55 provides the basic rule that the insurer is liable for loss proximately caused by an insured peril, subject to exclusions including wilful misconduct, delay, ordinary wear and tear, ordinary leakage or breakage, and inherent vice or nature.

Basis	Main Principle	Connection with ICC 1963	Caution
MIA 1906 Section 55(1)	Loss proximately caused by an insured peril	Review All Risks or the S.G. Policy insured perils	The proximate cause is not necessarily latest in time
Section 55(2)(a)	Wilful misconduct of the Assured	Intentional non-fortuitous loss is excluded	Distinguish negligence from intent
Section 55(2)(b)	Loss proximately caused by delay	Connected with Clauses 1, 5, and 14	Delay loss may remain excluded despite an insured event
Section 55(2)(c)	Ordinary wear, ordinary leakage, and inherent vice or nature	Connected with the All Risks Clause 5 limitation	Distinguish an abnormal external accident
MIA 1906 Section 78	Sue and labour provisions	Related to Clause 9 loss-minimisation duties	Separate General Average, special charges, and ordinary expenses

A modern contract incorporating the 1963 wording may also require review under the present governing law and contractual amendments. A historical contract or casualty must be assessed under the law and wording applicable at the relevant time.

Transit and Warehouse to Warehouse

Clause 1 attached cover when the goods left the warehouse or place of storage at the named place for commencement of transit.

Cover continued during the ordinary course of transit and terminated at the earliest of:

• Delivery to the consignee's or other final warehouse at the named destination
• Delivery to another warehouse selected for storage outside the ordinary course of transit or for allocation or distribution
• Expiry of 60 days after completion of discharge overside from the overseas vessel at the final port of discharge

Where the cargo was sent from the final port of discharge to another destination, the original insurance did not continue beyond commencement of transit to that new destination.

Delay beyond the Assured's control, deviation, forced discharge, reshipment, and transshipment were subject to continuation provisions, but loss caused by delay or inherent vice was not thereby insured.

Termination and Change of Voyage

Clause 2 addressed termination of the contract of affreightment or adventure before normal delivery. Continued cover depended on prompt notice and any additional premium required.

Clause 4 provided held-covered protection, at a premium to be arranged, for a change of voyage or an omission or error in the description of the interest, vessel, or voyage.

Change	Item to Confirm	Party to Notify	Action if a Problem Is Identified
Unscheduled port call	Whether the deviation is permitted under the contract of carriage	Insurer and insurance agent	Give prompt notice and confirm additional conditions
Premature termination of transit	Cargo location, sale, storage, and forwarding plan	Insurer	Confirm continuation under Clause 2
Change of destination	Time of change, new destination, and commencement of new transit	Insurer	Separate termination of the old insurance from the new transit
Additional transshipment	Whether it was contemplated and whether risk increased	Insurer and freight forwarder	Confirm any additional premium or condition
Error in cargo description	Description, value, packing, and dangerous-goods status	Insurer	Correct the error and obtain written agreement
Error in vessel description	Actual vessel, age, and route	Insurer	Confirm the requirements of held-covered protection

Constructive Total Loss, General Average, and Salvage

Clause 6 required reasonable abandonment where actual total loss appeared unavoidable or where recovery, reconditioning, and forwarding costs would exceed the cargo's value on arrival.

Clause 7 covered General Average and Salvage Charges payable in accordance with the relevant adjustment or York-Antwerp Rules where incorporated in the contract of affreightment.

General Average and Salvage Charges may arise even where the cargo itself is undamaged and even where Particular Average is restricted under F.P.A.

Item	Basic Meaning	Is Physical Cargo Damage Required?	Main Documents
Actual Total Loss	The cargo has been completely destroyed or irretrievably lost	Yes, total loss of the cargo interest is required	Survey and loss evidence
Constructive Total Loss	Recovery, reconditioning, and forwarding costs would exceed the arrival value	May arise without physical destruction of the whole cargo	Cost estimates and arrival value
General Average	Contribution to common sacrifices and expenses	No	Average Bond and Adjustment
Salvage Charges	Cargo interest's share of maritime salvage remuneration	No	Salvage Security and Award
Particular Charges	Certain expenses incurred for preservation or mitigation of the individual cargo interest	Depends on the policy and purpose of expenditure	Invoices and work records

War, Strikes, and Piracy

Clause 12 excluded capture, seizure, arrest, restraint, detainment, hostilities, warlike operations, civil war, revolution, rebellion, insurrection, civil strife, and piracy.

If Clause 12 was deleted, the relevant current Institute War Clauses were deemed to form part of the insurance.

Clause 13 excluded loss caused by strikers, locked-out workers, and persons taking part in labour disturbances, riots, or civil commotions, as well as loss resulting from such events.

If Clause 13 was deleted, the relevant Institute Strikes Riots and Civil Commotions Clauses were deemed to form part of the insurance.

The express treatment of piracy in Clause 12 differs from the later ICC(A) War Exclusion structure and must be reviewed carefully.

Situations Where This Article Applies

Situation	Old-Wording Issue to Review	Main Documents	Practical Judgment
Old policy stating All Risks	Clause 5, Clauses 12 and 13, and individual endorsements	Complete policy documents	Do not process the policy as if it were current ICC(A)
Partial-loss claim under W.A.	Policy percentage, franchise, and cause of loss	Original policy and loss calculation	Separate whether the threshold is reached from whether the cause is insured
Partial-loss claim under F.P.A.	Stranding, sinking, burning, stated casualties, and package total loss	Voyage and handling records	Do not reject the claim merely because the damage is partial
General Average declaration	Clause 7, security, and underinsurance	General Average notice and guarantee documents	Notify the insurer even where the cargo is physically undamaged
Discharge and storage at a port of refuge	Clause 2 and special charges under F.P.A.	Port-of-refuge invoices and termination notice	Separate ordinary logistics costs from recoverable special charges
Old letter of credit requiring W.A.	Documentary wording and the actual insurance protection	Letter of credit and Insurance Certificate	Do not treat documentary compliance as proof of commercially adequate cover
Piracy casualty	Clause 12 and attached War cover	Policy and official casualty reports	Do not assume that the All Risks label automatically covers piracy
Change of voyage or premature termination	Clauses 2 and 4, notice, and additional premium	Notice correspondence and transport records	Confirm every requirement of held-covered continuation

Situations Where the General Analysis Does Not Apply Without Modification

Situation	Reason	Document to Review First	Response
ICC 1982 or ICC 2009	The clause structure and condition names differ	Edition stated in the policy	Do not apply the 1963 franchise or F.P.A. structure
Proprietary Japanese wording	ICC 1963 may have been modified or replaced	General policy conditions and endorsements	Compare the proprietary wording with the English clauses
Air-cargo-specific wording	Institute Air Cargo Clauses or other air wordings may apply	Air cargo insurance clauses	Do not apply marine-cargo Clause 5 mechanically
Domestic transit insurance	The S.G. Policy Form and ICC 1963 do not apply	Domestic transit policy	Review the domestic insured perils and exclusions
Modern policy using only an old commercial label	The term All Risks, W.A., or F.P.A. may refer to a modern proprietary condition	Wordings actually attached to the policy	Do not determine cover from the label alone
Applying current law to a historical casualty	The law and wording in force at the contract and casualty dates may control	Contract date, casualty date, and governing law	Obtain legal advice before applying later legislation
Modern English-law contract incorporating ICC 1963	The Insurance Act 2015 and contractual amendments may also be relevant	Governing-law clause and contractual amendments	Do not determine the result from the historical wording alone

Decision Flow for an Old Policy

1. Confirm the policy and casualty dates.
2. Confirm that ICC 1963 was incorporated.
3. Obtain the complete S.G. Policy Form.
4. Identify All Risks, W.A., or F.P.A.
5. For W.A., identify the percentage and Memorandum.
6. For F.P.A., separate Particular Average, total loss, General Average, and the stated exceptions.
7. Identify the cause and type of loss.
8. Check for stranding, sinking, burning, fire, explosion, collision, contact, or discharge at a port of distress.
9. Check for a package totally lost during loading, transshipment, or discharge.
10. Separate General Average, Salvage Charges, special charges, and Constructive Total Loss.
11. Confirm the insured duration under Clause 1.
12. Review Clauses 2 and 4 for termination or change of voyage.
13. Confirm deletion of Clauses 12 and 13 and any separate War or Strikes clauses.
14. Review delay, inherent vice, ordinary deterioration, and other exclusions.
15. Review all extensions and endorsements.
16. Preserve rights against carriers and other third parties.

Cases Commonly Problematic in Practice

Case	Main Issue	Evidence	Decision Point	Initial Response
2.8% wet damage under W.A.	Failure to reach a 3% franchise	Policy percentage and loss calculation	Did any stranding or stated casualty occur?	Review vessel events as well as the percentage
3.4% damage under W.A.	Franchise reached	Survey and insured value	The claim is not limited to 0.4%	Confirm the unit of adjustment
Partial wet damage under F.P.A.	Ordinary Particular Average or stated exception	Container and voyage records	Wet damage alone may be insufficient	Review extensions and vessel casualty
One package lost overboard during discharge	Total loss of a package during handling	Tally and handling report	Was the entire package totally lost?	Notify the terminal immediately
Decay under All Risks	External accident or inherent vice	Temperature, quality, and casualty records	Inherent vice remains excluded	Secure temperature data
Damage after vessel stranding	Effect of the stranding exception	Stranding and causation evidence	Review the policy and governing law	Submit a complete chronology
Warehousing at a port of refuge	Special charges under F.P.A.	Invoices and emergency records	Ordinary cost or special charge?	Seek insurer approval before expenditure
Undamaged cargo in General Average	Clause 7 contribution and security	GA notice and Average Bond	Physical damage is not required	Notify the insurer immediately
Cargo taken by pirates	Clause 12 and War cover	Policy and official reports	All Risks does not automatically respond	Identify the applicable War Clauses
Loss after change of voyage	Held covered, notice, and additional premium	Notice and insurer response	Prompt notice is essential	Notify on learning of the change

Application Scenario 1: W.A. Cargo from Yokohama to Rotterdam

Assume machinery parts valued at JPY 120 million are shipped from Yokohama to Rotterdam under ICC 1963 W.A. with a 3% franchise.

Damage on arrival is adjusted at 2.7% of the insured value.

The exporter argues that W.A. covers Particular Average. The insurer argues that the loss does not reach the stated 3% franchise.

The freight forwarder reports that the vessel may have touched a shallow area during the voyage. The exporter argues that this was a stranding that removes the franchise restriction.

The insurer argues that the event was merely minor contact and did not constitute a stranding.

The vessel log, casualty report, ability to refloat without assistance, effect on navigation, cause of cargo damage, policy wording, and applicable legal interpretation must be reviewed.

Application Scenario 2: F.P.A. Cargo from Kobe to Singapore

Assume steel products valued at JPY 85 million are shipped from Kobe to Singapore under ICC 1963 F.P.A.

Freshwater damage causes rust to part of the cargo. No stranding, sinking, or burning of the vessel occurred.

The exporter argues that physical damage occurred during transit. The insurer argues that it is ordinary Particular Average and does not fall within a stated F.P.A. exception.

The exporter alleges a possible collision involving the container at a transshipment terminal, but no formal collision report exists.

Any RFWD extension, container damage, EIR, CCTV, water source, salt test, handling report, and timing of rust must be reviewed.

F.P.A. alone does not justify immediate rejection. The evidence must be tested against the stated exceptions and any additional cover.

Application Scenario 3: Riot Fire in Hamburg under All Risks

Assume electronic parts valued at JPY 200 million are awaiting shipment from Hamburg to Tokyo under ICC 1963 All Risks.

A warehouse fire destroys most of the cargo during labour unrest and riots in the port area.

The importer argues that fire damage is covered by All Risks.

The insurer argues that if the fire was caused by strikers or rioters, Clause 13 applies unless the relevant Strikes Riots and Civil Commotions clauses were incorporated.

The freight forwarder states that an electrical cause within the warehouse remains possible.

The deletion of Clause 13, separate Strikes cover, fire and police reports, CCTV, point of origin, and motive must be reviewed. The physical appearance of fire alone does not determine coverage under All Risks.

Scope of Freight Forwarder Involvement

These Standard Five Classifications are not legal classifications established by statute or universally accepted by the industry. They are an analytical framework used in this series to organize the scope of a freight forwarder's contractual and operational involvement.

Standard Five Classifications	Typical Involvement	Connection with ICC 1963	Limit to Be Confirmed	Main Evidence
1. Simple Intermediary	Connects the cargo owner, insurer, and carrier	Communicates old policy and casualty information	Does not determine payment under W.A. or F.P.A.	Instructions and policy copy
2. Cargo Transportation Service Provider	Provides collection, packing, storage, and handling	Provides handling and package-total-loss evidence	Does not confuse operational liability with insurance cover	Tally, photographs, and work records
3. NVOCC / House B/L Issuer	Issues a House B/L and acts as Contracting Carrier	May be responsible for the casualty stage	F.P.A. non-payment does not eliminate carrier liability	House B/L and conditions
4. Door-to-Door Single Contractor	Undertakes the full Door-to-Door transit	Integrates Warehouse-to-Warehouse evidence	Does not automatically have authority to decide insurance	Master and subcontract documents
5. Agent / Coordinator for Specific Operations	Coordinates local handling, storage, and survey	Collects local casualty and port evidence	Authority, reporting scope, and spending limit must be confirmed	Agency Agreement and local report

Packing, storage, inspection, stowage, vanning, devanning, drayage, lashing, survey arrangements, and other physical operations are facts used to identify the entrusted scope under the classifications. They do not replace the classifications and do not constitute a sixth classification.

The classification alone does not determine responsibility or authority. At minimum, the parties must separately confirm:

• Whether the freight forwarder is the Contracting Carrier, Actual Carrier, or only an arranger
• The extent of its authority concerning review of the old policy, explanation of conditions, notice of change of voyage, casualty notice, survey arrangements, and expenditure

A freight forwarder should not describe W.A. as ICC(B) or F.P.A. as ICC(C) without qualification. It should also avoid stating that an All Risks policy has the same exclusion structure as current ICC(A).

Common Misconceptions

Misconception	Correct Analysis	Practical Caution
All Risks is identical to current ICC(A)	The grant is similar in breadth but the policy and exclusions differ	Review the S.G. Policy Form
W.A. is identical to ICC(B)	W.A. is based on Particular Average and franchise	Do not convert it into a named-perils clause
F.P.A. is identical to ICC(C)	F.P.A. is based on freedom from Particular Average	Review the Clause 5 exceptions
F.P.A. covers only total loss	Package total loss, stated casualties, General Average, salvage, and expenses may also apply	Identify the precise exception
A 3% W.A. franchise is deducted from every claim	A franchise is not a deductible	Once reached, the whole recoverable loss is considered
W.A. pays every partial loss	Insured peril, franchise, and exclusions must be reviewed	Do not rely only on the percentage
Any stranding makes every loss payable	The old wording, insured peril, and governing law remain relevant	Establish both the casualty and the loss
All Risks 1963 contains the current packing exclusion	It does not contain the later Clause 4.3 wording	Review fortuity, causation, and the full policy
Warehouse to Warehouse provides unlimited storage cover	Cover may end on non-transit storage or after the 60-day limit	Identify the purpose of storage
A change of voyage is automatically covered	Held cover depends on notice and any additional premium	Notify Underwriters promptly
Piracy is automatically covered under All Risks	Clause 12 includes piracy in the exclusion	Review the War Clauses
Undamaged cargo has no General Average exposure	Contribution and security may still be required	Notify the insurer on receiving a General Average notice
An old policy can be understood by replacing its labels with current labels	The original policy, Memorandum, and attached clauses must be reviewed directly	Preserve the complete old wording

Decision Checklist

Situation	Party to Consult	Item to Confirm	Action if a Problem Is Identified
Old policy located	Cargo owner, insurer, and insurance agent	Contract date, wording, and S.G. Policy Form	Obtain the complete policy
Condition review	Insurer and insurance agent	All Risks, W.A., or F.P.A.	Do not substitute a current condition
W.A. claim	Insurer and surveyor	Franchise, loss percentage, and cause	Confirm the calculation basis in writing
F.P.A. partial loss	Insurer and carrier	Stranding, stated casualty, and package total loss	Collect voyage and handling evidence
Possible stranding	Shipping line and Actual Carrier	Nature, timing, and navigational effect	Request the vessel log and casualty report
Package lost during handling	Terminal, freight forwarder, and carrier	Stage of handling and total loss of package	Preserve tally and CCTV
General Average	Insurer and General Average adjuster	Clause 7, security, and underinsurance	Arrange the required guarantee
Port-of-refuge expenditure	Insurer and freight forwarder	Landing, warehousing, and forwarding necessity	Seek approval before expenditure
Change of voyage	Insurer and insurance agent	Time, reason, and revised route	Give prompt notice and agree the premium
War or riot casualty	Insurer and local agent	Clauses 12 and 13 and separate cover	Secure official evidence
Duration dispute	Warehouse, carrier, and consignee	Departure, discharge, delivery, and storage purpose	Identify the end of ordinary transit
Carrier recovery	Contracting Carrier and Actual Carrier	Casualty stage, liability, notice, and time bar	Issue Claim Notice without waiting for the insurance decision
Legal dispute	Insurer and maritime lawyer	Governing law, old wording, causation, and precedent	Reserve rights and obtain specialist advice

When to Consult a Maritime Lawyer

Routine review of an old policy, casualty notification, and evidence submission should normally begin with the insurer or insurance agent. Advice from a maritime lawyer experienced in English marine insurance law and international carriage should be considered where:

• The applicable All Risks, W.A., or F.P.A. condition is disputed
• The S.G. Policy Form, Memorandum, or attached clauses are missing
• The legal meaning of stranding, sinking, or burning is disputed
• The W.A. franchise unit or percentage calculation is disputed
• An F.P.A. exception is disputed
• An insured peril competes with delay or inherent vice
• Deletion of Clause 12 or 13 and the attachment of separate clauses are unclear
• Piracy, War, Strikes, riot, or civil commotion classification is disputed
• Notice of change of voyage or termination was delayed
• The applicability of current law to a historical casualty is disputed
• MIA 1906, Insurance Act 2015, or another governing law is relevant
• General Average, salvage, and cargo-loss claims overlap
• Policy non-payment and carrier or freight-forwarder liability overlap
• A notice or litigation time bar is approaching

A dispute under ICC 1963 requires the S.G. Policy Form, Memorandum, incorporated cargo clauses, War and Strikes clauses, endorsements, governing law, and casualty evidence to be reviewed as one contractual package.

Summary

Institute Cargo Clauses 1963 formed an old cargo-insurance system consisting of All Risks, W.A., and F.P.A. clauses used with the S.G. Policy Form.

All Risks provided broad cover and made recoverable claims payable irrespective of percentage, but delay, inherent vice, War, Strikes, and other policy restrictions remained relevant.

W.A. covered Particular Average subject to the percentage franchise stated in the policy, with special treatment for General Average, stranding, sinking, burning, package total loss, and stated casualties.

F.P.A. was based on freedom from Particular Average, but was not limited to total loss. Package total loss during handling, fire, explosion, collision, contact, port-of-distress discharge, certain special charges, General Average, and Salvage Charges could still be relevant.

The W.A. percentage was a franchise rather than a modern deductible. Once the threshold was reached, the whole recoverable Particular Average was generally considered.

All Risks, W.A., and F.P.A. must not be mechanically equated with ICC(A), ICC(B), and ICC(C). The 1963 system used a different contractual and partial-loss structure.

The complete policy, S.G. Policy Form, Memorandum, Clause 5, transit provisions, War and Strikes clauses, extensions, and casualty evidence must be reviewed.

Even where the cargo policy does not respond, liability may remain against a Contracting Carrier, Actual Carrier, NVOCC, freight forwarder, warehouse operator, or another third party. Notices and evidence should be preserved without waiting for the final insurance decision.