700 70 500

Marine Cargo Insurance (FAQ)

While the word 'marine' inevitably conjures up images of the sea, Marine Cargo insurance is not restricted to the movement of cargo across the seas. 

1.What is Marine Cargo Insurance?

In simple terms, it is the insurance of property from any loss or damages it may incur as it moves from place to place. While the name of the policy based on the Marine Insurance Act 1906 does specifically refer to 'marine losses' and 'maritime perils', since international travel ofter requires the use of more than one type of transport to ensure the cargo reaches its destination, Marine Cargo insurance also makes provisions for aircraft, road, and rail vehicles.

2.What are 'maritime perils'?

'Maritime perils' means any dangers related to the transfer of property by sea, namely sinking, stranding or collision, or fire, war perils, capture, pirates, thieves, jettison, washing overboard and any other perils of that kind as designated by the policy. The inclusion of the latter clause (i.e. that of unspecified perils) allows insurers leeway to include other risks associated with other means of transport, such as crashing, derailment or overturning.

3.Why do I need Marine Cargo insurance?

Marine Cargo insurance is meant to limit your exposure to risk of financial loss due to the damage or loss of goods during their transit. This safeguards your revenues and ensures you have sufficient cash flow to provide replacement goods should the need arise, and this in turn will protect you from lawsuits filed by unhappy clients.

4.What does Marine Cargo insurance cover?

The scope of the policy cover is defined by the Institute Cargo Clauses (ICC).

There are three forms of cover:

a.Institute Cargo Clause (All Risks) - ICC(A)

This is the widest form of insurance and it covers all insurable risks unless explicitly excluded. Common exclusions may include ordinary leakage, unseaworthiness of the vessel and misconduct of the insured.

b.Institute Cargo Clause (Named Risks, Broad) - ICC(B)

This type of insurance covers only risks that are explicitly named. It covers loss or damage of the insured cargo if it is attributable to: Fire or explosion, collision or contact of vessels, entry of sea water, earthquake, volcanic eruption, washing overboard, discharge of cargo at port of distress, overturning/derailment of land conveyance, total loss of package overboard during loading/unloading, general average etc.

c.Institute Cargo Clause (Named Risks, Narrow) - ICC©

This is the least form of coverage on a named risks basis and only covers loss or damage of the insured cargo attributable to: fire or explosion, vessel being stranded, sunk or capsized, overturning or derailment of land conveyance, collision or contact of vessel with any external object other than water, discharge of cargo at a port of distress, and loss or damage caused by general average sacrifice, jettison or dumping of goods.

5.What are INCOTERMS and how do they affect my decision to buy marine cargo insurance?

INCOTERMS are a set of internationally recognised trade terms published by the International Chamber of Commerce and they define certain of the obligations and responsibilities the seller and buyer have towards each other regarding goods moving in international trade. 

If you sell goods on either CIP or CIF terms, you need to provide insurance for the benefit of your buyer. Additionally, since INCOTERMS assign responsibility for the loss or damage of cargo to either the seller, the buyer or both, if you have a financial interest in the goods and are responsible for any loss or damage, you would want to be insured. Insurers will, in fact, use INCOTERMS to determine the extent of your insurable interest in each shipment (i.e. the portion of cargo transit during which you are responsible for loss or damage) and then insure only the shipments for which you bear the responsibility.

6.How is the cost of Marine Cargo insurance determined?

There are a number of factors that may affect the cost of insurance. The main ones are:

a.The risks associated with the origin and destination countries

b. How susceptible to damage the shipped goods are

c.The types of packaging being used for the goods

d. The types of conveyance

e. The type of valuation and limits provided

f. The account's past experience

7.I have an All Risks policy. Do I need additional coverage?

You might. Marine Cargo policies always come with a Free of Capture & Seizure clause, which excludes war risks, strikes, riots and civil commotions and similar risks. If you feel like you might need such coverage, an additional premium must be paid if these perils are to be included in the policy as well. The political and social climate of a given country determine the rates, which are set by the London Market War Risks Rating Committee or the American Market War/SR&CC Schedule.


If you need further information regarding Marine Cargo Insurance, please contact us at: [email protected]

Ready to talk to us? Interested in visiting?
Contact [email protected] or
call us on 700 70 500