Cargo insurance: ICC A/B/C, deductible and how it works
Cargo in transit can be hit by an accident, a storm, theft or damage during transshipment. The carrier's liability is limited by law and almost never covers the full value of the goods. That is why cargo insurance exists. We break down what a policy covers, what the ICC A/B/C clauses are, who insures under Incoterms and how to file a claim for delivery to Ukraine.
What cargo insurance is
Cargo insurance covers the goods themselves during transport against damage, loss or destruction. Unlike carrier liability, the policy covers the real value of the goods (and often more), whether or not the carrier is at fault.
Why carrier liability is not enough
Under international conventions the carrier's liability is limited by weight, not by the value of the goods: for example, under CMR (road) about 8.33 SDR per kg, and even less under the Hague-Visby sea rules. For expensive or light cargo that is a fraction of the real price. A cargo policy closes the gap.
Cover levels: the ICC A / B / C clauses
The world standard is the Institute Cargo Clauses:
| Clause | Cover | When to choose |
|---|---|---|
| ICC (A) | “All risks” — the widest cover | valuable, fragile cargo |
| ICC (B) | Named perils (wider than C) | mid level |
| ICC (C) | Basic named perils (minimum) | low-value, robust cargo |
War and strikes risks (War & Strikes) are bought separately — they are not part of the basic cover.
Who insures — under Incoterms
The duty to insure depends on the Incoterms delivery term:
| Term | Who insures | Minimum |
|---|---|---|
| CIF | seller | ICC (C) |
| CIP | seller | ICC (A) |
| other | by agreement (risk usually with the buyer) | — |
Note: under Incoterms 2020 the minimum cover for CIP was raised to ICC (A), while CIF stayed at ICC (C).
What is not covered
- ordinary loss, shrinkage, inherent vice of the goods;
- poor packing (see cargo securing);
- the shipper's wilful misconduct;
- war and strikes — only under a separate clause.
Sum insured and deductible
The standard sum insured is 110% of the CIF value (goods price + freight + 10% for incidental costs). The deductible is the part of a loss the insured bears; the higher it is, the cheaper the policy.
How to file a claim
On damage: record the fact (report, photos), call a surveyor for an independent assessment, collect the documents (policy, invoice, bill of lading/consignment note, the shipment pack) and submit a claim to the insurer. Good loading control up front simplifies settlement.
Insurance on the Middle Corridor
The multimodal Middle Corridor is conveniently insured door-to-door with one policy for the whole route. This matters especially because of the transshipments: the Caspian crossing, the break of gauge, port handling — every transfer point raises the risk of damage, and a single policy covers them without gaps.
Development prospects
Insurance is going digital: electronic policies, online issue in minutes, parametric insurance (automatic payout on a sensor-triggered event), telematics and in-transit cargo monitoring. For the Middle Corridor this means faster, more transparent payouts.
Summary
Cargo insurance is inexpensive protection of the goods' value where carrier liability falls short. ABU JORJIA will help choose the cover (ICC A/B/C) and arrange a policy for the whole multimodal shipment to Ukraine. Send a request.
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