Institute Cargo Clauses A, B and C

When the container ship X-Press Pearl caught fire off Colombo on May 20, 2021, then sank on June 2 with 1,486 containers aboard, shippers insured on form A did not have to name the operative peril. The Institute Cargo Clauses are the three wordings that serve as the global reference for cargo insurance, whatever law governs the contract. Form A covers all risks of loss or damage, subject to the listed exclusions, and the underwriter must establish that an exclusion applies. Forms B and C instead list the perils insured. C is limited to major casualties such as fire, stranding, sinking or overturning of the land conveyance. B adds earthquake, entry of sea water and total loss of a package during loading. All three share a common floor of exclusions: inherent vice, insufficient packing, delay, insolvency of the carrier and unseaworthiness known to the assured. War and strikes sit in separate wordings that must be added. The revision effective January 1, 2009 softened several of those exclusions and lengthened the transit period covered. The problem solved: a negotiation that could not be repeated for every shipment between parties of different languages and legal systems, which three stable wordings make comparable from one market to the next.