Covered Risks and Insurance Conditions in Marine Cargo Insurance

Overview

Covered risks and insurance conditions determine which causes of physical loss of or damage to cargo are insured during international transportation.

It is not sufficient merely to confirm that cargo insurance exists. The applicable ICC(A), ICC(B), ICC(C), ICC(Air), Institute War Clauses, Institute Strikes Clauses, and individual extensions or endorsements must be identified.

The same apparent wet damage, fire, theft, or non-delivery may fall under different wordings depending on its cause. Wet damage may result from seawater entry, rain, condensation, leaking pipes, firefighting water, temperature change, or insufficient packing. These causes are not treated as one insured peril.

ICC(A) is commonly described as all-risks cover, but it does not insure every economic loss without limitation. Insufficient packing, inherent vice, ordinary leakage or wear, delay, war, and strikes, riots, and terrorism remain subject to exclusions and separate wordings.

This article uses a cause-of-loss analysis to identify the applicable wording. Detailed comparison of ICC(A), ICC(B), and ICC(C), duration of cover, and the historical development of ICC(2009) are delegated to the relevant specialist articles.

Scope of This Article

Item	Matters Covered in This Article	Matters Covered in Other Articles
Overall covered-risk structure	The functions of ordinary marine, War, Strikes, and additional cover	Institute Cargo Clauses 2009 addresses the complete clause system
ICC(A), ICC(B), and ICC(C)	Basic differences required to classify a casualty	The article comparing ICC(A), ICC(B), and ICC(C) addresses the listed perils in detail
Revision to ICC(2009)	Only the changes necessary to understand current covered risks	Main Changes in Institute Cargo Clauses 2009 addresses the revision from ICC(1982)
Duration	Only the fact that basic ICC, War, and Strikes duration may differ	Duration of Marine Cargo Insurance addresses attachment and termination in detail
General exclusions	Principal exclusions relevant to the covered-risk analysis	Specialist exclusion articles address each exclusion
War risks	Basic classification of war, civil war, hostile acts, and derelict weapons	The Institute War Clauses article addresses duration, cancellation, and route underwriting
Strikes risks	Physical loss caused by strikers, riots, civil commotions, and terrorism	The Institute Strikes Clauses article addresses individual requirements and duration
Additional cover	Situations requiring TPND, Malicious Damage, Piracy, or other extensions	Individual articles address each extension in detail
Letters of credit and sales contracts	Comparison of specified and actually issued insurance conditions	The insurance-document discrepancy article addresses bank examination
Casualty handling	Initial identification of the wording responding to the cause of loss	The marine cargo claims article addresses notification, proof, and claim procedure
Carrier liability	The distinction between cargo-policy cover and carrier liability	The cargo claim against carriers article addresses liability and limitation

Situations Where This Analysis Applies

Situation	Purpose of Review	Main Conditions to Review	Practical Caution
Insurance arranged for an individual shipment	Select covered risks appropriate to the cargo, route, and transport	ICC(A), ICC(B), ICC(C), War, Strikes, and extensions	Review excluded causes rather than comparing premium alone
Declaration under an open cover	Confirm whether the cargo and route fall within the agreed conditions	Open-cover terms, excluded cargo, and individual-approval requirements	Special cargo or routes may not qualify for the ordinary rate and terms
Seller-arranged insurance under CIF or CIP	Satisfy the insurance requirements of the sales contract	Required ICC condition, War, Strikes, sum insured, and transit	Distinguish the seller's minimum obligation from the buyer's actual insurance needs
Buyer-arranged insurance under FOB or FCA	Insure cargo after the contractual transfer of risk	Attachment, inland transit, theft, and handling extensions	Avoid a gap before vessel loading or after delivery to the first carrier
Issuing an insurance document under a letter of credit	Align the policy with the credit requirements	ICC, War, Strikes, extensions, currency, and sum insured	Commercially adequate cover may still create a documentary discrepancy
Selecting ICC(B) or ICC(C)	Identify frequent casualty causes omitted from the named perils	TPND, RFWD, Breakage, Contamination, and Piracy	Review the actual transport stage where damage is likely to occur
Adding War or Strikes cover	Restore risks excluded by the basic ICC	Institute War Clauses and Institute Strikes Clauses	Area, duration, premium, and cancellation may differ from basic ICC
Considering a claim after a casualty	Classify the cause under an insured peril or exclusion	Basic ICC, War, Strikes, extensions, and exclusions	Identify the actual cause rather than the apparent damage
Renewing or restructuring insurance conditions	Compare historical causes of loss with gaps in the present cover	Cause-specific Loss Record, current clauses, and deductible	Distinguish lower pricing from reduced cover
A freight forwarder communicates shipment information	Provide the facts required for underwriting	Cargo, packing, conveyance, route, transshipment, and storage	Distinguish factual communication from product recommendation or placement

Situations Where This Analysis Does Not Apply Without Modification

Situation	Reason the General Analysis Does Not Apply Directly	Contract or Condition to Review First	Required Response
Domestic transit insurance	Domestic wording rather than international ICC applies	Domestic transit policy and endorsements	Do not substitute ICC(A), ICC(B), or ICC(C) mechanically
Insurer-specific English or Japanese wording	Standard ICC may have been replaced or materially amended	Policy, proprietary wording, and endorsements	Compare each clause with the standard ICC
ICC(1982) or former wording	Covered risks, exclusions, and terminology differ from ICC(2009)	Clause title, edition date, and MAR or S.G. form	Do not apply the current ICC(2009) explanation unchanged
Refrigerated or frozen cargo	Temperature change, machinery stoppage, and delay may be governed by commodity wording	Frozen Food Clauses, Temperature Clause, and machinery-breakdown condition	Review temperature and stoppage requirements individually
Used goods or used machinery	Pre-existing damage, rust, wear, and repair limitations may be specially addressed	Used Machinery Clause, Survey Warranty, and Replacement Clause	Preserve pre-shipment condition and survey evidence
Bulk liquid or chemical cargo	Contamination, previous cargo, tank cleaning, and natural loss require specialist terms	Bulk Oil Clauses, contamination conditions, and tank certificates	Review tank history and previous cargo
Project cargo or heavy lifts	Deck carriage, towage, heavy-lift operations, and Marine Warranty Survey may be conditions	Project Cargo Endorsement, MWS Warranty, and On-Deck conditions	Do not determine cover solely from standard ICC
Air cargo	ICC(Air) and air-specific duration and handling apply	Institute Cargo Clauses (Air), AWB, and handling records	Do not apply the sea-cargo ICC(B) and ICC(C) comparison directly
Postal or courier cargo	The insured transit and proof of custody may differ from ordinary cargo insurance	Postal wording, courier contract, and individual insurance terms	Confirm the transport party, receipt evidence, and applicable compensation system
Inventory or warehouse storage after transit	Property or warehouse insurance rather than the Transit Clause applies	Warehouse and property policies	Do not rely solely on an extension to transit insurance
Carrier liability insurance	Cargo insurance and the carrier's legal or contractual liability are separate systems	Contract of carriage, B/L conditions, and liability policy	Do not transfer cargo-policy covered-risk analysis directly to carrier liability
Sanctions, trade restrictions, or administrative restraint without physical loss	The issue may concern trading ability or delay rather than an insured cargo peril	Sanction Clause, trade law, and administrative order	Distinguish physical loss from delay, cost, or inability to trade

Why the Peril Groups Are Separated

Marine cargo insurance does not place ordinary transport casualties, war and armed conflict, and strikes, riots, and terrorism into a single undifferentiated wording.

Ordinary transport risks may be assessed by reference to cargo, packing, mode of transport, route, handling, and storage. War, riots, and terrorism may concentrate losses within a specific area, change rapidly, and require revised underwriting, additional premium, cancellation, or geographical restrictions.

The basic ICC therefore excludes War and Strikes risks, which may be added through Institute War Clauses or Institute Strikes Clauses where required.

The separation affects more than the title of the wording. Cause of loss, duration, additional premium, cancellation, notice, and geographical availability may differ.

Basic Structure of Covered Risks

Risk Group	Main Wording	Principal Subject	Treatment under Basic ICC	Practical Caution
Ordinary cargo risks	ICC(A), ICC(B), or ICC(C)	Fire, collision, water damage, breakage, and other transit losses	Depends on the selected ICC condition	A, B, and C use different coverage structures
Air-cargo risks	ICC(Air)	Loss or damage during air and related transit	Uses air-cargo all-risks wording	Its structure differs from sea-cargo B and C conditions
War risks	Institute War Clauses	War, civil war, hostile acts, specified seizure, and derelict weapons	Excluded under basic ICC	Duration differs materially from basic ICC
Strikes risks	Institute Strikes Clauses	Acts of strikers, riots, civil commotions, terrorism, and motivated persons	Excluded under basic ICC	Labour shortage and delay remain separate issues
Additional insured risks	TPND, Malicious Damage, Piracy, and other extensions	Specified risks insufficiently covered under the basic condition	Not necessarily included automatically	Confirm the actual wording and endorsement
Commodity conditions	Frozen-food, used-goods, machinery, and bulk clauses	Commodity-specific perils, valuation, repair, and replacement	May amend the standard ICC	Individual wording may prevail over the basic condition

Basic Difference between ICC(A), ICC(B), and ICC(C)

Condition	Coverage Structure	Main Characteristic	Principal Casualty Review	Typical Caution
ICC(A)	All risks except excluded risks	Broad cover for physical loss of or damage to cargo	Loss, duration, exclusion, and causation	All risks does not mean every type of loss
ICC(B)	Named-perils cover	Includes major casualties, earthquake, volcanic eruption, lightning, washing overboard, and water entry	Whether the loss is reasonably attributable to a listed peril	Theft, ordinary breakage, and rain damage are not necessarily included
ICC(C)	Narrower named-perils cover	Focuses on fire, grounding, sinking, overturning, collision, general average sacrifice, and jettison	Whether the loss falls within its limited list	Ordinary handling damage, wet damage, and theft may be insufficiently covered
ICC(Air)	Air-cargo all-risks cover	Broad physical-loss cover subject to exclusions	Air transit, related stages, exclusions, and duration	Separate conditions may apply to postal sendings

Under ICC(A), the analysis generally focuses on whether physical loss or damage occurred during the insured period and whether an exclusion applies.

Under ICC(B) and ICC(C), it is also necessary to show that the loss is reasonably attributable to a peril listed in the wording.

A dent caused by a vehicle collision may fall within ICC(B) or ICC(C). A similar dent caused by ordinary handling or vibration without a listed casualty may not.

Difference between the Named Perils under ICC(B) and ICC(C)

Peril	ICC(B)	ICC(C)	Practical Meaning
Fire or explosion	Covered	Covered	The cause must not be an excluded peril
Stranding, sinking, or capsizing	Covered	Covered	The damage must be reasonably attributable to the casualty
Overturning or derailment of land conveyance	Covered	Covered	Distinguish overturning from vibration or sudden braking
Collision or contact with an external object	Covered	Covered	Contact with water is excluded from this listed peril
Discharge at a port of distress	Covered	Covered	Causation by the emergency discharge remains relevant
Earthquake, volcanic eruption, or lightning	Covered	Not listed	ICC(C) may be insufficient unless another listed peril applies
General average sacrifice	Covered	Covered	Distinguish it from general average contribution
Jettison	Covered	Covered	Coverage does not depend solely on formal general average
Washing overboard	Covered	Not listed	Review deck-stowage conditions and declarations
Entry of sea, lake, or river water	Covered	Not listed	Distinguish rain, condensation, and pipe leakage
Total loss of a package lost overboard or dropped during loading or unloading	Covered	Not listed	The wording requires total loss of the relevant package

The water-entry peril under ICC(B) does not mean that every type of wet damage is insured. Sea, lake, or river water must be distinguished from rain, condensation, leaking pipes, firefighting water, and moisture generated by temperature change.

Principal Exclusions Requiring Review Even under All-Risks Cover

Exclusion	Basic Effect	Example	Facts to Review
Wilful misconduct of the Assured	Excludes deliberate loss caused by the Assured	Intentional destruction of cargo	Actor, instruction, motive, and authority
Ordinary leakage, loss in weight, or wear	Excludes normal reduction or deterioration	Natural evaporation or ordinary wear	Abnormal casualty or ordinary process
Insufficient or unsuitable packing	Excludes specified packing-related loss	Machine overturning because of inadequate securing	Party, timing, and suitability for ordinary transit
Inherent vice or nature	Excludes loss arising from the cargo's own nature	Self-heating, natural decay, or spontaneous deterioration	External event, cargo properties, and temperature records
Delay	Excludes delay loss even where delay follows an insured peril	Late delivery, market fall, or penalty	Physical damage or pure time loss
Insolvency or financial default	May exclude specified loss where relevant knowledge existed	Interrupted voyage or retention of cargo	Knowledge, assignee status, and effect on prosecution of voyage
Unseaworthiness or unfitness	May exclude specified loss where the Assured was privy to the condition	Wet damage from an unsuitable container	Loading party, knowledge, and good-faith assignee
War	Excludes war, civil war, hostile acts, and related risks	Armed attack or derelict mine	War wording and duration
Strikes, riots, and terrorism	Excludes loss caused by specified actors or motives	Warehouse fire set by rioters	Strikes wording and cause of loss
Nuclear and radioactive risks	Excludes specified nuclear weapons or devices	Contamination caused by a nuclear weapon	Additional radioactive and CBRN exclusions

A loss apparently falling within ICC(A) may remain excluded if its cause falls within an exclusion.

Where insured and excluded causes compete, the causal sequence and the portion of damage attributable to each cause may require detailed analysis.

Basic War Risks

War Risk	Basic Subject	Practical Caution
War and civil war	International or domestic armed conflict	A formal declaration of war is not necessarily decisive
Revolution, rebellion, and insurrection	Organised armed action against authority	Distinguish it from an ordinary riot
Hostile act	Hostile action by or against a belligerent power	Identify the actor and relationship with the conflict
Capture, seizure, restraint, or detainment	Specified restraint arising from an insured war risk	Ordinary customs action is not automatically included
Derelict mines, torpedoes, or bombs	Loss caused by weapons remaining from armed conflict	The War exclusion may prevail over ordinary collision wording
General average and salvage	Specified charges incurred to avoid an insured War risk	The underlying cause must be insured under the War wording

War cover does not insure every cost associated with conflict. Delay, frustration, sanctions-related inability to trade, administrative restraint, and market loss must be distinguished from physical cargo loss.

Piracy is not necessarily treated as War risk. Under ICC(A), piracy is excepted from the capture and seizure exclusion. Under ICC(B) and ICC(C), the fact that piracy is not excluded as War does not itself make it a listed peril. A Piracy Clause may therefore require separate review.

Basic Strikes, Riots, and Terrorism Risks

Risk	Basic Covered Event	Likely Uninsured Consequence	Evidence
Physical damage by strikers	Strikers directly damage or burn the cargo	Mere cessation of work	Police report, video, and local report
Damage by locked-out workers	Direct physical act by the relevant workers	Handling delay caused by staff shortage	Employment and casualty records
Damage by participants in labour disturbances, riots, or civil commotions	Direct cargo damage caused by participants	Late delivery caused only by a blocked area	Official notice, media, and survey
Terrorism	Act connected with an organisation seeking violent influence over government	Ordinary crime or solely financial motive	Investigation and statements of responsibility
Political, ideological, or religious motive	Damage caused by a person acting from the specified motive	Ordinary malicious damage without proof of motive	Actor, statement, and investigation
General average and salvage	Charges incurred to avoid an insured Strikes risk	Pure delay expenses	General average adjustment and cause of casualty

Institute Strikes Clauses does not insure every loss occurring during a strike. Physical loss or damage must generally be caused by an insured actor or act.

Absence or shortage of labour, port closure, delay, loss of market, penalties, and price reduction are not automatically covered merely because a strike occurred.

Cause-of-Loss Classification

Apparent Damage	Possible Cause	First Wording to Review	Common Error
Wet damage	Entry of seawater	ICC(A) or ICC(B)	Classifying the loss only as wet damage
Wet damage	Rain or leaking pipe	ICC(A) or additional cover	Treating every water source as ICC(B) water entry
Wet damage	Condensation or sweat	ICC(A), Sweat cover, and inherent-vice exclusion	Treating internal condensation as external water entry
Theft or pilferage	Ordinary criminal act	ICC(A) or TPND	Assuming theft under ICC(B) or ICC(C)
Non-delivery	Theft or misdelivery of packages	ICC(A) or TPND	Assuming carrier confirmation establishes policy cover
Breakage or denting	Collision or overturning	ICC(A), ICC(B), or ICC(C)	Assuming that every dent requires an extension
Breakage or denting	Ordinary handling or vibration	ICC(A) or a breakage extension	Automatically treating it as collision under B or C
Fire	Ordinary accidental fire	ICC(A), ICC(B), or ICC(C)	Failing to review an excluded cause of ignition
Fire	Arson by rioters or strikers	Institute Strikes Clauses	Applying basic ICC solely because fire occurred
Explosion or destruction	Derelict mine or bomb	Institute War Clauses	Applying only ordinary fire or collision cover
Temperature damage	Accidental refrigeration breakdown	ICC(A) and temperature endorsement	Assuming unconditional temperature cover under ICC(A)
Temperature damage	Transport delay caused by strike	Delay exclusion, Strikes wording, and temperature cover	Assuming that every strike-related consequence is insured

Additional Cover Commonly Considered under ICC(B) or ICC(C)

The following titles are representative market descriptions. Wording and availability may differ among insurers and contracts.

Extension or Clause	Typical Cargo or Risk	Possible Gap in the Basic Condition	Item to Confirm
TPND	Electronics, apparel, and small high-value goods	Theft, pilferage, and non-delivery are not listed under ICC(B) or ICC(C)	Package, definition of Non-Delivery, and quantity discrepancy
RFWD	Paper, textiles, food, machinery, and rain-sensitive goods	ICC(B) water entry does not necessarily cover every rain or freshwater event	Rain, freshwater, warehouse leakage, and open handling
Breakage, Bending, or Denting	Glass, ceramics, machinery, steel, and components	Ordinary handling loss without a listed casualty may be uninsured	Packing, pre-existing damage, and deductible
Shortage or Leakage	Liquids, powders, bags, drums, and cans	Ordinary leakage and ordinary loss remain excluded	Seals, measurement, container damage, and natural loss
Contamination	Food ingredients, oils, and bulk chemicals	Contamination may occur without a listed marine casualty	Previous cargo, tank cleaning, foreign matter, and quality standards
Sweat or Heating	Metal, agricultural goods, food, and condensation-sensitive cargo	Internal condensation or natural heating may not be water entry	Ventilation, temperature difference, moisture, and inherent vice
Spontaneous Combustion	Coal, oils, powders, and self-heating cargo	The inherent-vice exclusion may apply	Cargo condition, stowage, temperature, and extension wording
Institute Malicious Damage Clause	Malicious destruction and sabotage	Wrongful deliberate damage is excluded under ICC(B) and ICC(C)	Political motive and boundary with Strikes cover
Piracy Clause	Piracy-prone sea routes and coastal transport	The ICC(B) or ICC(C) list may be insufficient	Piracy, theft, seizure, and War classification
On-Deck conditions	Heavy, project, or deck cargo	Deck stowage, washing overboard, and jettison may be restricted	B/L notation, declaration, container type, and consent
Rats and Vermin	Grain, food, feed, paper, and warehouse cargo	Vermin is not a listed peril and may involve storage or inherent conditions	Pest controls, storage, and time of damage

Distinguishing Clauses That Do Not Add a New Peril

Clause	Main Function	Difference from Additional Peril Cover
Institute Replacement Clause	Adjusts repair or replacement of machinery and components	Does not necessarily add a new cause of loss
Label Clause	Limits or defines payment where only labels are damaged	Primarily concerns the measure of loss
Duty Clause	Covers specified import-duty exposure	Insures a separate interest rather than a cargo peril
Sanction Limitation and Exclusion Clause	Restricts cover or payment where sanctions apply	May restrict payment despite an otherwise insured peril
Marine Cyber Endorsement	Defines cyber cover or exclusion	Modifies the basic ICC response
Termination of Transit Clause (Terrorism)	Modifies the duration of certain terrorism exposure	Primarily changes policy duration
Institute Classification Clause	Defines vessel criteria and possible additional premium	Addresses underwriting of the carrying vessel

The presence of a special clause does not necessarily broaden covered perils. Each clause must be classified as additional cover, exclusion, duration amendment, loss-adjustment provision, or underwriting condition.

Position of the MAR Form and the Former S.G. Form

Under the former S.G. form, descriptions such as All Risks, W.A., and F.P.A. were used, and partial loss, franchise, and marine-casualty requirements were important.

The MAR Policy Form and the Institute Cargo Clauses 1982, followed by ICC(2009), introduced the modern ICC(A), ICC(B), and ICC(C) structure.

Former W.A. and ICC(B), or former F.P.A. and ICC(C), may be mentioned together when explaining historical development. They are not identical wordings.

A current casualty must be determined from the clause title, edition date, and endorsements actually incorporated into the policy rather than from an historical label.

Relationship with Letters of Credit and Sales Contracts

Where a letter of credit or sales contract requires ICC(A), ICC(B), ICC(C), War Risks, Strikes Risks, or an extension, the issued policy or certificate must be checked against that requirement.

A change from ICC(A) to ICC(C), or removal of War or Strikes cover to reduce premium, may leave a valid insurance policy but fail the sales-contract or documentary-credit requirements.

Item	Credit or Sales Contract	Insurance Document	Possible Consequence of Difference
ICC condition	Required A, B, or C condition	Condition actually stated	Insufficient cover or documentary discrepancy
War and Strikes	Requirement for additional cover	Presence of endorsement	Breach or discrepancy
Additional cover	Requirement for TPND or another extension	Clause stated in the policy	Theft or another loss may remain uninsured
Transit	Required From and To locations	Policy locations	Uninsured stage of transport
Insurance amount	Required percentage such as 110%	Sum insured	Discrepancy or inadequate recovery
Currency	Credit or contract currency	Policy currency	Discrepancy or currency exposure

Decision Flow for Identifying the Applicable Wording

1. Review the policy, certificate, and endorsements and identify every clause and edition date.
2. Identify whether ICC(A), ICC(B), ICC(C), or ICC(Air) is the basic condition.
3. Confirm whether Institute War Clauses and Institute Strikes Clauses are attached.
4. Confirm TPND, Malicious Damage, Piracy, temperature, RFWD, and other extensions.
5. Identify the physical loss of or damage to the cargo.
6. Identify the probable date and location of the casualty rather than only the discovery date.
7. Identify the specific cause rather than relying on a general label such as fire, water, theft, or riot.
8. Under ICC(B) or ICC(C), determine whether the cause is reasonably attributable to a listed peril.
9. For War or Strikes claims, identify the actor, motive, conflict, and causal connection with the physical damage.
10. Review packing, inherent vice, ordinary loss, delay, and other exclusions.
11. Confirm policy duration and the claimant's insurable interest.
12. Where several causes compete, analyse the damage by cause.
13. Preserve rights against carriers, warehouse operators, and other third parties.
14. Report established facts without prematurely asserting a final cause.

Cases Commonly Problematic in Practice

Case	Main Cause	Documents and Evidence	Decision Point	Initial Response
Theft under ICC(B)	TPND absent or not checked	Policy, seal record, and quantity record	Listed peril or additional cover	Notify police and carrier and review the policy
Rain damage under ICC(B)	Confusion with sea-water entry	Weather, container, warehouse, and survey	Listed water entry or RFWD extension	Preserve the source and route of water entry
Handling damage under ICC(C)	No listed marine casualty	Handling record, video, and work report	Attribution to collision, overturning, or another listed peril	Notify the handling contractor immediately
Warehouse fire during riot	Confusion between ordinary fire and Strikes exclusion	Police, fire, video, and media records	Actor and causal connection with the riot	Review basic ICC and Strikes separately
Temperature loss during strike	Delay caused by cessation of work	Temperature, operation, and strike records	Direct physical act or excluded delay	Arrange alternative transport and cooling
Mine damage to vessel and cargo	Competition between marine and War perils	Vessel report, official statement, and survey	Derelict weapon or ordinary casualty	Notify both basic and War insurers
Cargo taken by pirates	Incorrect classification as War or theft	Master's report, official record, and policy	ICC condition and Piracy Clause	Notify maritime authorities and insurer
Deliberate destruction by a third party	Uncertain political motive	Investigation, video, and statement	Malicious Damage or Strikes wording	Do not speculate about motive
Fire caused by self-heating	Competition between fire and inherent vice	Temperature, moisture, stowage, and expert report	External ignition or spontaneous heating	Separate remaining cargo and investigate
Condensation in a container	Confusion with external water entry	Ventilation, humidity, packing, and route	External ingress or internal condensation	Record water pattern and moisture distribution

Application Scenario 1: Theft from ICC(B) Cargo Exported through Yokohama without TPND

Assume that a Japanese exporter ships electronic components valued at JPY 180 million through Yokohama under ICC(B).

At a foreign transshipment port, the container seal is broken and several cartons are removed. No collision, overturning, fire, or other marine casualty occurs.

The exporter argues that the goods disappeared during insured transit and that cargo insurance should respond.

The insurer argues that ICC(B) is a named-perils condition, ordinary theft and pilferage are not listed, and TPND was not attached.

The policy, TPND endorsement, seal history, loaded quantity, terminal records, and carrier's non-delivery evidence must be reviewed.

Proof of non-delivery does not itself establish that the cause is insured under ICC(B). Claims against the carrier and terminal should proceed separately.

Application Scenario 2: Fire Damage Caused by Rioters near Kobe

Assume that machinery parts valued at JPY 95 million are imported to Kobe under ICC(A), without Institute Strikes Clauses.

During a riot near the port, participants throw an incendiary device at a truck awaiting delivery and the cargo is burned.

The importer argues that ICC(A) is all-risks cover and that the cargo suffered fire damage.

The insurer argues that the fire was caused by participants in a riot and falls within the Strikes exclusion under the basic ICC.

Fire reports, police records, video evidence, the relationship with the riot, and attachment of the Strikes wording must be reviewed.

The result may differ between an accidental electrical fire and arson directly caused by rioters even though both produce burned cargo.

Application Scenario 3: Cargo for Nagoya Damaged by a Derelict Mine

Assume that project components valued at JPY 260 million are imported to Nagoya under ICC(C) with Institute War Clauses.

During the voyage, the vessel contacts a mine remaining from a former armed conflict, causing an explosion and cargo damage.

The cargo owner argues that the vessel contacted an external object and that ICC(C) collision or contact cover applies.

The insurer argues that the specific cause was a derelict mine, excluded under basic ICC and covered, if at all, under the Institute War Clauses.

The master's report, official weapons assessment, casualty location, origin of the mine, War duration, and relevant limits and deductibles must be reviewed.

Although the apparent event was contact, the more specific derelict-weapons classification is central to identifying the responding wording.

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	Involvement in Covered-Risk Issues	Limit to Be Confirmed	Main Evidence
1. Simple Intermediary	Connects the cargo owner with transport and insurance parties	Communicates cargo, route, packing, and casualty information	Does not independently determine cover or recommend final conditions	Instructions, quotation, and delegated scope
2. Cargo Transportation Service Provider	Provides collection, storage, handling, and delivery	Records operations, causes, and cargo condition	Distinguishes logistics work from insurance-product explanation	Work record, photographs, and warehouse record
3. NVOCC / House B/L Issuer	Issues a House B/L and acts as Contracting Carrier	Provides information concerning its transit and casualty	Does not confuse carrier liability insurance with cargo insurance	House B/L, conditions of carriage, and casualty report
4. Door-to-Door Single Contractor	Undertakes the complete Door-to-Door movement	Organises risk information for the entire transport	Transport responsibility does not automatically confer insurance-distribution authority	Master contract, service scope, and insurance instruction
5. Agent / Coordinator for Specific Operations	Coordinates a defined operation or territory	Collects local riot, War, theft, and casualty information	Confirms agency authority, source, and effective time of information	Agency Agreement, local report, and notices

Packing, storage, inspection, stowage, vanning, devanning, drayage, lashing, and similar physical operations are facts used to identify the entrusted scope under the classifications. These operations do not replace the classifications and do not create an additional classification.

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

• Whether the freight forwarder is the Contracting Carrier, Actual Carrier, or only an arranger
• The extent of authority concerning quotations, explanation of conditions, recommendation of extensions, application handling, and casualty notification

A freight forwarder without appropriate insurance authority may organise factual information concerning cargo, route, packing, and casualty. It should not independently recommend ICC(A), ICC(B), or ICC(C) as an insurance product or state conclusively that an extension is unnecessary.

Documents to Be Reviewed after a Casualty

Document	Item to Review	Purpose	Action if Missing
Policy or insurance certificate	ICC, War, Strikes, and extensions	Identify the contractual cover	Obtain the complete contract from the insurer
Endorsements and special clauses	Additional cover, exclusions, and duration amendments	Identify modifications to standard ICC	Confirm clause number and effective date
B/L, Sea Waybill, or AWB	Transit, deck carriage, and transshipment	Confirm mode and declared transport	Obtain it from the carrier or forwarder
Packing List and packing specification	Package, method, and securing	Review TPND, package total loss, and packing exclusion	Obtain contractor work records
Survey report	Cause, damage pattern, and timing	Connect the loss with a listed peril or exclusion	Arrange a survey before repair or disposal
Temperature and humidity records	Excursion, condensation, and stoppage	Distinguish external casualty, delay, and inherent vice	Obtain equipment and carrier logs
Master's or carrier's casualty report	Marine casualty, collision, War, or handling event	Attribute the loss to an insured peril	Request a formal casualty statement
Police, fire, or official record	Theft, arson, riot, terrorism, or War	Identify actor, motive, and cause	Use a local agent or lawyer where required
Photographs and CCTV	Damage, seals, and water path	Establish pre- and post-casualty condition	Preserve recordings before deletion
Letter of credit and sales contract	Required insurance condition and extension	Compare contractual requirements with the policy	Consult the bank and trading parties

Common Misconceptions

Misconception	Correct Analysis	Practical Caution
ICC(A) covers every loss	It broadly covers physical loss or damage but remains subject to exclusions	Review delay, packing, and inherent vice
ICC(B) covers every type of wet damage	Listed water entry must be distinguished from rain and condensation	Identify the water source and route
ICC(C) covers every breakage occurring in transit	The loss must be attributable to a limited listed peril	Review the cause rather than the damage description
Theft is covered under every ICC condition	TPND or another extension may be required under ICC(B) or ICC(C)	Review the endorsements
Every fire is covered under basic ICC	War, riot, or terrorism may engage a separate exclusion and wording	Identify the cause and actor
Strikes cover insures every consequence of a port strike	Labour shortage, delay, and loss of market are not automatically covered	Identify direct physical damage
War cover insures sanctions and every administrative restraint	The loss must arise from an insured War risk	Review the legal cause and connection with conflict
Piracy is always a War risk	Treatment depends on the ICC condition and any Piracy Clause	Distinguish piracy, theft, and seizure
More special clauses always mean broader cover	Special clauses may exclude, limit duration, or adjust loss	Classify the function of each clause
Identical ICC conditions produce identical claim outcomes	Cargo, cause, duration, interest, and evidence remain case-specific	Conduct an individual factual analysis

Decision Checklist

Situation for Confirmation	Party to Consult	Item to Confirm	Action if a Problem Is Identified
When concluding the sales contract	Seller, buyer, and legal staff	Required ICC, War, Strikes, and extensions	State cargo- and route-appropriate conditions
Before issuing a letter of credit	Bank, seller, and buyer	Conditions, currency, amount, and transit	Replace ambiguous requirements with specific wording
When requesting an insurance quotation	Insurer and insurance agent	Cargo, packing, route, transport, and loss experience	Provide missing information and obtain formal terms
When selecting ICC(B) or ICC(C)	Insurer and cargo owner	Theft, wet damage, breakage, contamination, and other gaps	Consider necessary extensions
When attaching War or Strikes cover	Insurer and insurance agent	Area, duration, rate, and cancellation	Reconfirm conditions before shipment
Before shipment	Freight forwarder, carrier, and insurer	Vessel, route, deck carriage, and transshipment	Notify the insurer of changes
When arranging special cargo	Manufacturer, packer, and insurer	Temperature, contamination, self-heating, and repairability	Arrange commodity wording or survey
Immediately after a casualty	Insurer, surveyor, and carrier	Damage, cause, time, place, and policy conditions	Preserve evidence without prematurely fixing the cause
After theft, riot, or War casualty	Police, authority, insurer, and local agent	Actor, motive, conflict, and causation	Obtain official records promptly
When submitting the claim	Insurer, insurance agent, and surveyor	Covered peril, exclusion, duration, and insurable interest	Complete evidence and third-party notices
When a freight forwarder explains conditions	Insurer, insurance agent, and compliance staff	Insurance-distribution authority and permitted explanation	Avoid unauthorised recommendation or conclusion
When a legal dispute arises	Insurer, maritime lawyer, and legal staff	Governing law, proximate cause, wording, notice, and deadlines	Reserve rights and control all time limits

When to Consult a Maritime Lawyer

Routine condition review and casualty notification should generally be handled with the insurer or insurance agent. Advice from a lawyer experienced in marine insurance and international trade should be considered where:

• The boundary between ICC(A) all-risks cover and an exclusion is disputed
• Causation under a named peril in ICC(B) or ICC(C) is disputed
• Fire, collision, or wet damage competes with War or Strikes causation
• The actor or motive behind riot, terrorism, or malicious damage is unclear
• Piracy, seizure, ordinary theft, or administrative restraint is disputed
• Packing, inherent vice, or delay exclusion is asserted
• The effective attachment of an extension is disputed
• A discrepancy between the credit and the policy causes sales-contract loss
• A freight forwarder's authority to explain or arrange cover is disputed
• A foreign insurer relies on foreign law, jurisdiction, or arbitration
• An insurance, carrier-notice, or litigation deadline is approaching

A covered-risk dispute should not be determined from a broad casualty label alone. The factual sequence, competing causes, and specific wording of each clause must be reviewed.

Discussions with the insurer must not result in failure to notify carriers, warehouse operators, handling contractors, or other third parties and preserve recovery rights.

Summary

Marine cargo insurance is generally structured through ICC(A), ICC(B), ICC(C), or ICC(Air), together with Institute War Clauses, Institute Strikes Clauses, and any necessary extensions.

ICC(A) uses an all-risks structure subject to exclusions. ICC(B) and ICC(C) use named-perils structures. ICC(B) is broader than ICC(C) because it additionally includes earthquake, volcanic eruption, lightning, washing overboard, entry of sea, lake, or river water, and total loss of a package dropped during loading or unloading.

War and Strikes risks are excluded from the basic ICC and require separate wordings. The existence of war or a strike does not automatically insure delay, labour shortage, loss of market, penalties, or frustration of the voyage.

Under ICC(B) or ICC(C), TPND, RFWD, Malicious Damage, Piracy, contamination, breakage, or other extensions may be required according to the cargo and transport.

The general analysis in this article applies to individual cargo policies, open covers, CIF, CIP, FOB, FCA, and documentary-credit transactions. It should not be applied without modification to domestic transit insurance, proprietary wording, former clauses, commodity-specific wording, long-term warehouse storage, or carrier liability insurance.

After a casualty, the actual cause rather than the apparent damage description must be identified and analysed under the basic ICC, War, Strikes, extensions, and exclusions.

The final coverage decision requires the policy, incorporated clauses, endorsements, duration, insurable interest, cause of loss, and evidence to be reviewed together.