Aims

To indemnify the cargo owner against the financial loss caused in the course of transportation from one place to another place. It normally involves land, sea and air transit.

Covered Item

Agreed value equals to 100% or more of Cargo Value in case of

1. Total or partial loss of or damage in the course of transportation by covered perils;
   
2. reasonable cost incurred by the Insured in salving the goods or averting or minimizing a loss recoverable under the Policy, provided that such cost shall not exceed the sum insured of the consignment so saved.

Covered Perils

Most insurers adopt Institute Cargo Clauses (ICC) to form standard policy wording in expressing the covered perils.  The three most well-known sets of ICC are:

ICC (A): The own damage cover is on an "All Risks" basis.

ICC (B): The own damage cover is on a specified risks basis

• specified major casualties (fire, stranding, sinking, collision, etc.);
  
• Earthquake, volcanic eruption and lightning;
  
• Discharge of cargo at a port of distress;
  
• Jettison and washing overboard;
  
• Entry of sea, lake or river water;
  
• Total loss (only) of any package lost, etc whilst loading or unloading.

ICC (C): The own damage is covered for even fewer specified risks covering GA sacrifice, jettison, and specified major casualties (fire, stranding, sinking, collision, etc.); earthquake, volcanic eruption and lightning;

Policy Type & Covered Period

• Short Term Policy per transit / sailing
• Annual Open Policy for covering Multi-transit during a policy year subject to monthly declaration of cargo turnover for monthly billing purpose.

Premium

• Premium rate per cent on the total cargo value to be insured, subject to the minimum amount if the final premium is below it. 
• Premium rate is depending on
  • Probability and Severity of loss
    Higher rate for cargo that is small in size but high in value than those large / heavy in size and low in value.
  • Territorial Risk
  • Available Excess as self retention

Exclusion

ICC (A), (B) and (C) contain a number of exclusions, including:

• Loss due to willful misconduct of the assured.
• Expected losses, such as wear and tear, ordinary loss in weight, etc.
• Loss due to inadequate packing, bearing in mind the journey and nature of the cargo.
• Loss due to inherent vice, that is, damage arising from the quality in the insured cargo itself (e.g. meat or fish which goes bad, wine which turns sour, etc.).
• Loss due to unseaworthiness of the carrying vessel, of which the assured is aware at the time of loading.
• Loss due to war, strikes, etc., which are, nevertheless, insurable for extra premium.
  ICC (B) and (C) expressly exclude the deliberate or wrongful act of any person.
  ICC (A) impliedly does not cover such an act on the part of the insured or the claimant.