Marine cargo insurance

ICC (A) covers all risks of physical loss or damage except the listed exclusions, so the insured only has to show a fortuitous loss. ICC (B) and (C) cover named perils only. (C) covers fire, explosion, stranding, sinking, collision, discharge at a port of distress, general average and jettison. (B) adds earthquake, lightning, washing overboard, entry of sea or river water and total loss of a package during loading. Theft, non-delivery, rain and handling damage need (A).

Only CIF and CIP oblige the seller to insure, and the cover is for the buyer's benefit. Incoterms 2020 sets CIF at ICC (C) as the minimum and CIP at ICC (A), for the contract price plus 10%. Under EXW, FCA, FOB and CFR the buyer carries transit risk and buys its own policy. Under DAP, DPU and DDP the seller carries the risk to delivery and should insure, though the rules do not require it.

A single-shipment policy suits occasional consignments: one voyage, one certificate, paid up front. An open cover suits regular shippers: it insures every shipment within agreed goods, routes and limits for 12 months, with shipments declared periodically and premium adjusted on actual value. It removes the risk of an undeclared shipment travelling uninsured and lets the broker issue certificates for letters of credit as shipments are booked.

General average is a rule of maritime law: when the master sacrifices cargo or incurs expense to save the ship, every cargo owner contributes in proportion to the value saved. The carrier will not release goods until each owner posts security. ICC (A), (B) and (C) all cover the contribution, and the insurer issues the general average guarantee so the goods are released.

Only while storage is part of the ordinary course of transit. Under the 2009 clauses cover attaches when goods are first moved in the warehouse for loading and ends on unloading at the final warehouse, when goods go into storage for allocation, or 60 days after discharge at the final port, whichever is first. Longer storage needs a declared extension or a stock throughput policy.

Notify the broker and the carrier at once, keep the damaged goods and packing, and ask for a joint survey before anything is moved. The claim file needs the policy or certificate, invoice, packing list, bill of lading or air waybill, the survey report and the carrier's reply to a written claim. In Sizer Metals v Chubb [2022] SGHC 51 the court held the insured must show, on the balance of probabilities, that the loss occurred inside the insured transit.