The Answer in 60 Seconds

Institute Cargo Clauses (C) 1/1/2009 is the most restrictive of the three Institute Cargo Clauses (A, B, C) — it covers a defined list of named perils only, not "all risks." Per the published ICC C 1/1/2009 wording (Lloyd's Market Association), the perils covered are limited to fire/explosion, vessel grounded/stranded/sunk/capsized, overturning or derailment of land conveyance, collision of vessel with anything other than water, discharge at port of distress, general average sacrifice, and jettison. To file a claim under ICC C, you must demonstrate that the loss was caused by one of these named perils — proximate causation matters. Theft, washing overboard, water entry, and earthquake/lightning are not covered under ICC C (they are covered under ICC A and partially under ICC B).

The Step-by-Step

ICC C is the cheapest of the three Institute Cargo Clauses and is commonly chosen by SMEs shipping bulk commodities, low-value cargo, or goods where the buyer/seller has agreed only minimum cover under the sale contract (e.g. CIF Incoterms with the seller's obligation being minimum cover under ICC C). The claim mechanics are similar to ICC A — but the coverage threshold is higher because you must prove a named peril caused the loss.

What ICC C 1/1/2009 actually covers

Per the LMA-published Institute Cargo Clauses (C) 1/1/2009, Clause 1.1:

This insurance covers, except as provided in Clauses 4, 5, 6 and 7 below, loss of or damage to the subject-matter insured reasonably attributable to:

  • Fire or explosion
  • Vessel or craft being stranded, grounded, sunk, or capsized
  • Overturning or derailment of land conveyance
  • Collision or contact of vessel, craft, or conveyance with any external object other than water
  • Discharge of cargo at a port of distress

Clause 1.2 covers loss of or damage to the subject-matter insured caused by:

  • General average sacrifice
  • Jettison

That's the entire list. Notably absent (compared to ICC A and B):

  • Earthquake, volcanic eruption, lightning
  • Washing overboard
  • Entry of sea, lake, or river water into the vessel/craft/hold/container
  • Total loss of any package lost overboard or dropped during loading/unloading
  • Theft (covered under ICC A only — even ICC B does not include theft as standard)
  • Malicious damage (covered under ICC A only)
  • Hooks/sling damage during loading

Step 1 — Confirm the wording is ICC C

Pull the marine cargo certificate or the open-cover declaration. The certificate should specify the wording: ICC A, ICC B, or ICC C (with the date — 1/1/2009 is the current standard; older certificates may reference 1/1/1982 wordings, which differ in some details).

If the certificate references ICC A or ICC B, this article is the wrong reference — the broader cover applies and the burden of proving cause is lighter.

Step 2 — Identify the proximate cause of the loss

ICC C requires you to demonstrate that the loss was caused by a named peril. The Marine Insurance Act 1906 (UK, but applied in Singapore via the Marine Insurance Act 1906 (Singapore)) section 55 states: "Subject to the provisions of this Act, and unless the policy otherwise provides, the insurer is liable for any loss proximately caused by a peril insured against, but, subject as aforesaid, he is not liable for any loss which is not proximately caused by a peril insured against."

Proximate cause is the dominant or most effective cause, not necessarily the first or last in the chain.

Examples:

  • Vessel stranded on reef, water enters, cargo damaged. Proximate cause = stranding (covered). Claim valid under ICC C.
  • Cargo wet on arrival, no record of vessel incident, container seal intact. Proximate cause likely = condensation, leak, or pre-shipment moisture. Not a named peril. Claim likely fails under ICC C; would succeed under ICC A.
  • Container falls overboard during heavy weather. Proximate cause = washing overboard (not covered under ICC C; covered under ICC B).
  • Cargo damaged by fire on board. Proximate cause = fire (covered). Claim valid under ICC C.

Step 3 — Notify the insurer immediately

Same notification discipline as any marine cargo claim — same day discovery, ideally. Provide certificate number, shipment reference, arrival details, nature of damage.

Step 4 — Preserve evidence and arrange survey

A surveyor's report becomes the central evidentiary document. For ICC C claims especially, the surveyor's findings on the cause of loss determine whether cover applies. The surveyor will examine:

  • Outer container condition (intact seal, no evidence of vessel incident vs visible damage signs)
  • Inner packing condition
  • Pattern of damage
  • Master's statement of facts (vessel logs)
  • Port of distress declarations
  • General average declarations from the carrier

Step 5 — Reserve rights against carriers

If the loss was caused by a vessel incident (stranding, fire, collision), the carrier may have a separate liability under the Hague-Visby Rules or the carriage contract. The marine cargo insurer's right of subrogation depends on you preserving the recovery rights — file written notice of claim with the carrier within the carriage time bar (typically 1 year from delivery for Hague-Visby).

Step 6 — Submit the claim file with cause-of-loss evidence

For ICC C, the claim file must include cause-of-loss evidence:

  • Surveyor's report attributing damage to a named peril
  • Vessel master's statement of facts (if vessel incident)
  • Port of distress declaration (if applicable)
  • General average declaration (if jettison or GA sacrifice)
  • Carrier correspondence
  • Photos and videos

Without cause-of-loss evidence, the claim cannot be assessed against the named-perils list.

Step 7 — Settlement basis

Marine cargo claims are typically settled on:

  • Insured value (CIF + 10%, the standard mark-up for incidental costs and lost profits) — for total loss
  • Apportioned loss for partial damage — calculated as (depreciation %) × (insured value)

The insurer pays subject to the policy excess and any specific sub-limits.

When ICC C is — and isn't — the right choice

ICC C is typically used for:

  • Bulk commodities (raw materials, scrap metal, ore, grain) where named-perils cover is sufficient
  • Low-value general cargo where premium is the primary concern
  • CIF sales contracts where the seller's obligation is minimum cover under ICC C
  • Supplementary cover layered with the buyer's own ICC A "buyer's interest" insurance

ICC C is typically not the right choice for:

  • High-value finished goods where any damage source matters
  • Electronics, perishables, fragile items
  • Goods sensitive to moisture (theft and water damage are not named perils under C)
  • Specialist cargo (artwork, antiques, project cargo) where bespoke wordings are usual

Common Mistakes / What Goes Wrong

  1. Buying ICC C to save premium, then discovering loss isn't covered. The premium difference between ICC C and ICC A is usually 30–50%; the gap is not always worth the saving on high-value or sensitive cargo.
  2. Assuming ICC C covers theft. It does not. Even ICC B does not. Only ICC A.
  3. Not securing the proximate cause evidence. Without surveyor attribution to a named peril, the claim fails on coverage even if the damage is real.
  4. Confusing CIF Incoterms with insurance coverage. CIF requires some cover but defaults to minimum (ICC C). The buyer can require ICC A in the sale contract — this needs to be negotiated, not assumed.
  5. Mixing 1982 and 2009 wordings. The 2009 wordings refined some terms (notably the war/strikes exclusions). Make sure the certificate is on current wording.

What This Means for Your Business

For an SME running international trade, the ICC choice is a commercial decision tied to the sale contract, the cargo value, the trade route, and the carrier reliability:

  1. Map your shipments by value tier. Bulk and low-value goods may be appropriate for ICC C; finished goods and high-value cargo typically warrant ICC A.

  2. Read the sale contract Incoterms carefully. CIF puts the seller on insurance; FOB puts the buyer on insurance from port-of-loading. Understand which side you're on, and negotiate the cover level explicitly.

  3. For CIF sellers, consider whether ICC C exposes the buyer to gaps that come back to you commercially. A buyer who suffers an uncovered loss under ICC C will often request goodwill credit or future business concessions — making the premium saving illusory.

  4. For FOB buyers, take charge of the cover level. Don't accept the seller's "we'll handle insurance" without specifying the wording in the contract. ICC A on a fixed-rate open cover is the standard for serious importers.

The single most expensive mistake in marine cargo is buying the cheapest cover, then discovering at claim time that the loss type wasn't on the named-perils list. The premium gap between ICC C and ICC A is usually a small fraction of the loss exposure on a single bad shipment.

Questions to Ask Your Adviser

  1. Is my marine cargo open cover on ICC A, ICC B, or ICC C, and which wording date (1/1/1982 or 1/1/2009)?
  2. For my typical shipment values and routes, does the premium saving on ICC C justify the coverage gap?
  3. Are my CIF sales contracts with overseas buyers requiring ICC A or accepting ICC C — and what is the commercial implication if a buyer's cargo is damaged uncovered?
  4. Does my open cover include War Risks and Strikes (separate Institute clauses, not part of ICC A/B/C)?
  5. What is my excess per shipment, and is there a per-vessel aggregate limit?

Related Information

Published 4 May 2026. Source verified 4 May 2026. COVA is an introducer under MAS Notice FAA-N02. We do not recommend insurance products. We provide factual information sourced from primary regulators and route you to a licensed IFA who can match a policy to your specific situation.