{"id":26710,"date":"2023-06-10T17:07:39","date_gmt":"2023-06-10T17:07:39","guid":{"rendered":"https:\/\/insuropedia.in?p=26710"},"modified":"2026-02-25T03:51:26","modified_gmt":"2026-02-25T03:51:26","slug":"cost-advantage-analysis-of-three-main-categories-of-institute-cargo-clauses-icc-a-b-and-c","status":"publish","type":"post","link":"https:\/\/securenow.in\/insuropedia\/cost-advantage-analysis-of-three-main-categories-of-institute-cargo-clauses-icc-a-b-and-c\/","title":{"rendered":"Cost advantage analysis of three main categories of Institute Cargo Clauses (ICC): A, B, and C"},"content":{"rendered":"
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Marine insurance<\/span> plays a vital role in international and domestic trade. A customised <\/span>marine insurance policy<\/span><\/a> provides complete protection against all the named and unnamed perils related to the shipping business. <\/span>Marine insurance<\/span> provides financial protection against the loss or damage caused to the ship, cargo, and terminal by which property is acquired, held, and transferred from the point of origin to the destination. There are various types of marine insurance policies available such as <\/span>marine cargo insurance<\/span>, <\/span>freight insurance<\/span>, hull insurance, etc., which can be availed after customising as per the requirement of the business. Price analysis of Institute Cargo Clauses (ICC): A, B, and C, is essential for determining the appropriate level of coverage for a cargo insurance policy. Cost analysis of Institute Cargo Clauses helps businesses assess the financial implications and benefits of different insurance provisions and coverages.<\/span><\/p>\n

Key Takeaways<\/h2>\n
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  • \n

    The “All Risks” Premium:<\/b> ICC-A is the most expensive because it shifts the burden of proof to the insurer. Unless an event is specifically excluded (like war or wear and tear), it is covered. This is the gold standard for International CIF contracts<\/b>.<\/p>\n<\/li>\n

  • \n

    Water Damage Differentiation:<\/b> A critical cost factor is “Washing Overboard” and “Seawater Entry.” These are covered under ICC-B but absent in ICC-C. If your route involves rough seas, the slightly higher cost of ICC-B is a necessary investment.<\/p>\n<\/li>\n

  • \n

    CIF vs. FOB Responsibility:<\/b> In 2026, the responsibility for insurance is dictated by the Sales Contract<\/b>. In a CIF (Cost, Insurance, and Freight)<\/b> contract, the seller is legally bound to arrange the insurance, whereas in FOB, the buyer takes over the risk once the goods are on board.<\/p>\n<\/li>\n

  • \n

    ICC-C as the Economic Baseline:<\/b> For businesses with high-volume, low-margin bulk goods, ICC-C provides the “major casualty” protection (fire, sinking, capsizing) needed to satisfy bank requirements at the lowest possible premium.<\/p>\n<\/li>\n

  • \n

    Customization via Riders:<\/b> While ICC clauses provide the framework, businesses often add riders for War, Strikes, and Riots<\/b>, as these are typically excluded from the standard A, B, and C clauses.<\/p>\n<\/li>\n<\/ul>\n

    Availing of <\/span>marine insurance<\/span> coverage for businesses involved in the trade is now easy with the availability of <\/span>online cargo insurance<\/span>. Marine insurance in trade determines responsibility based on the type of sales contracts, including Free-on-board, cost & freight, free-on-rail, and CIF (cost, insurance & freight) contracts. For example, in a CIF contract, the seller is responsible for arranging the marine insurance.\u00a0<\/span><\/p>\n

    In a <\/span>marine insurance policy<\/span>,<\/span> the protection or the extent of coverage is decided based on the Institution’s cargo clauses. There are mainly three categories of Institute cargo clauses- Institute cargo clause A, Institute cargo clause B, and Institute marine clause C. These institute cargo clauses define what type of risks are covered in the <\/span>cargo insurance<\/span> policy. The <\/span>marine insurance<\/span> premium is also decided based on the coverages availed or the institute cargo clauses included in the marine insurance policy. If you are availing of the wider coverage, you would require to pay a higher marine insurance premium.\u00a0<\/span>So, to conduct a cost analysis of the 3 main categories of Institute Cargo Clauses (ICC) – A, B, and C – consider their coverage, premiums, and potential risks. <\/span><\/p>\n

    Cost Analysis of Institute Cargo Clauses of the 3 Main Categories of ICC<\/h2>\n

    Before analysing the cost advantage of institute cargo clauses in a <\/span>marine insurance policy<\/span>, it is important to know the risks covered in each main category of institute cargo clauses. Let us look at the extent of coverage specified in the institute cargo clauses.<\/span><\/p>\n

    Cost Analysis of Institute Cargo Clause – A<\/strong><\/p>\n

    This clause provides coverage for all risks. The Institute Cargo Clause A covers loss or damage to the insured property (cargo, ship, terminal, etc.) arising from all named and unnamed perils. The risks or perils covered are not specified. As you can avail of extensive, all-risk marine insurance coverage, the cost of <\/span>marine insurance<\/span> for this category of ICC (Institute cargo clause) is relatively higher.\u00a0<\/span><\/p>\n

    Analysis of ICC – B<\/strong><\/h3>\n

    This clause of marine insurance provides coverage for loss or damage to insured property arising from below risks:<\/span><\/p>\n

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    1. Fire, explosion<\/span><\/li>\n
    2. Washing overboard<\/span><\/li>\n
    3. Loss overboard during loading, unloading<\/span><\/li>\n
    4. Jettison<\/span><\/li>\n
    5. The sea water entering the craft, ship, conveyance, container, hold, lift van, or the place of storage<\/span><\/li>\n
    6. Lightning, volcanic eruption, or earthquake<\/span><\/li>\n
    7. Overturning of the vessel, derailment of land conveyance<\/span><\/li>\n
    8. General average sacrifice<\/span><\/li>\n
    9. Discharge of cargo at the port of distress<\/span><\/li>\n
    10. Collision of ship<\/span><\/li>\n
    11. Stranding, sinking, grounding, or capsizing<\/span><\/li>\n
    12. contact of ship or conveyance with anything other than the ship\/conveyance (excluding water)<\/span><\/li>\n<\/ol>\n

      While not covering all risks, ICC (Institute Cargo Clause) B also offers broader coverage. Hence, the cost of the premium for <\/span>marine insurance<\/span> for this category is relatively lower than the ICC (Institute cargo clause) A cover.\u00a0<\/span><\/p>\n

      Analysis of ICC – C<\/strong><\/h3>\n

      This clause of marine insurance provides coverage for loss or damage to insured property arising from below risks:<\/span><\/p>\n

        \n
      1. Fire, explosion<\/span><\/li>\n
      2. Jettison<\/span><\/li>\n
      3. Overturning of the vessel, derailment of land conveyance<\/span><\/li>\n
      4. General average sacrifice<\/span><\/li>\n
      5. Discharge of cargo at the port of distress<\/span><\/li>\n
      6. Collision of ship<\/span><\/li>\n
      7. Stranding, sinking, grounding, or capsizing<\/span><\/li>\n
      8. contact of ship or conveyance with anything other than the ship\/conveyance (excluding water)<\/span><\/li>\n<\/ol>\n

        Summary: Cost & Coverage Analysis of ICC A, B, and C<\/h3>\n
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        \n\n\n\n\n\n\n\n\n\n\n
        Feature<\/strong><\/td>\nICC – A (All Risks)<\/strong><\/td>\nICC – B (Major Perils)<\/strong><\/td>\nICC – C (Basic Cover)<\/strong><\/td>\n<\/tr>\n<\/thead>\n
        Coverage Scope<\/b><\/span><\/td>\nAll perils (named & unnamed).<\/span><\/td>\nSpecific named perils + seawater damage.<\/span><\/td>\nBasic named perils (Fire\/Collision\/Sinking).<\/span><\/td>\n<\/tr>\n
        Premium Cost<\/b><\/span><\/td>\nHighest<\/b><\/span><\/td>\nModerate<\/b><\/span><\/td>\nLowest (Cost-effective)<\/b><\/span><\/td>\n<\/tr>\n
        Best For<\/b><\/span><\/td>\nHigh-value, fragile, or sensitive goods.<\/span><\/td>\nMid-value goods with risk of water damage.<\/span><\/td>\nBulk commodities or low-risk coastal trade.<\/span><\/td>\n<\/tr>\n
        Seawater Damage<\/b><\/span><\/td>\nIncluded.<\/span><\/td>\nIncluded.<\/span><\/td>\nExcluded.<\/b><\/span><\/td>\n<\/tr>\n
        Theft\/Pilferage<\/b><\/span><\/td>\nIncluded.<\/span><\/td>\nUsually Excluded (needs rider).<\/span><\/td>\nExcluded.<\/span><\/td>\n<\/tr>\n
        Non-Named Perils<\/b><\/span><\/td>\nCovered by default.<\/span><\/td>\nNot Covered.<\/span><\/td>\nNot Covered.<\/span><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n

        Marine insurance under ICC (Institute cargo clause) C comes with basic coverage and hence, is cost-effective.<\/span><\/p>\n

        To sum up, the cost of <\/span>marine insurance<\/span> varies with the extent of coverage that you opt for. Though basic cover comes at a relatively lower rate of premium, it is important to assess the risk exposure of your business and trade and then take your affordability into consideration while buying <\/span>online cargo insurance<\/span>. It is important to have comprehensive coverage customised as per the need to protect your business.<\/span><\/p>\n

        Frequently Asked Questions (FAQs)<\/h3>\n

        Q1: Does ICC-A cover everything that could possibly happen to my cargo?<\/b><\/h4>\n

        A)<\/strong> Almost everything, but there are Standard Exclusions<\/b>. Even under “All Risks” (ICC-A), insurance does not cover loss due to inherent vice (natural decay), poor packaging, willful misconduct by the insured, or standard wear and tear.<\/p>\n

        Q2: Why should I choose ICC-B over the cheaper ICC-C?<\/b><\/h4>\n

        A)<\/strong> The primary reason to pay the higher premium for ICC-B is coverage against Seawater Damage<\/b> and Washing Overboard<\/b>. If your cargo is susceptible to water damage or is being stored on the deck, ICC-C will not provide enough protection.<\/p>\n

        Q3: Who decides which clause (A, B, or C) should be used in a trade deal?<\/b><\/h4>\n

        A)<\/strong> It is usually determined by the Sales Contract (Incoterms)<\/b> and the requirements of the Lending Bank<\/b>. Most banks providing a Letter of Credit (LC) will insist on ICC-A (All Risks) coverage to protect their financial interest in the cargo.<\/p>\n

        Q4: Is “Theft and Pilferage” covered under the basic ICC-C clause?<\/b><\/h4>\n

        A)<\/strong> No. Theft and pilferage are not named perils in ICC-C or ICC-B. They are only included by default in ICC-A<\/b>. If you have B or C, you would need to add a specific “Theft, Pilferage, and Non-Delivery” (TPND) rider.<\/p>\n

        Q5: Can I buy Marine Insurance online for a single shipment?<\/b><\/h4>\n

        A)<\/strong> Yes. In 2026, Digital Marine Certificates<\/b> are standard. You can purchase a “Single Transit Policy” for a one-off shipment or an “Open Policy” if you have regular trade movements throughout the year.<\/p>\n