Institute Cargo Clauses (A) is sold as all risks, and shippers hear that as everything is covered. What it means is that the burden of proof flips: you do not have to show the cause was an insured peril, the insurer has to show it was an excluded one. The exclusions themselves are still there, and they are the reason genuine claims on genuinely damaged cargo get declined.
Insufficient or unsuitable packing
The biggest single cause of declined claims. Clause 4.3 excludes loss caused by insufficiency or unsuitability of packing or preparation, where the packing was done by you or your employees before the cover attached.
The test is not whether the packing was normal for your trade. It is whether it was fit to withstand the ordinary incidents of the transit you chose. Cartons that survive a domestic pallet network are not automatically fit for six weeks of ocean motion, top stow, and handling in four terminals.
Two things follow. First, packing decisions are risk decisions: see export packaging and palletisation and securing cargo for sea. Second, the exclusion is narrower than insurers sometimes argue: it applies to packing by you, so packing done by an independent contractor after cover attached may not be caught.
Inherent vice
Cargo damaging itself, without any external cause. Fruit ripening and rotting, steel oxidising in humid air, chemicals separating, chocolate blooming, timber warping. The insurer is covering fortuities, not the natural behaviour of the goods.
The line between inherent vice and an insured peril is genuinely contested. Condensation damage is the classic battleground: if the cargo sweated because of its own moisture content it is inherent vice, and if seawater entered the container it is not. This is why container condition surveys and moisture records matter more than shippers expect.
Delay
Clause 4.5 excludes loss proximately caused by delay, even if the delay is caused by an insured peril. Read that twice. If a vessel is disabled by a covered fire, is towed to a port of refuge, and your seasonal goods arrive four months late and worthless, the physical damage is covered and the missed season is not.
There is no ordinary market solution to this. It is a supply chain design problem, not an insurance one.
Ordinary leakage, loss in weight and wear and tear
Normal shrinkage, evaporation and abrasion are excluded. Bulk liquids and hygroscopic commodities lose weight in transit as a matter of physics, and that is a trade allowance, not a claim.
Insolvency of the carrier
Clause 4.6 excludes loss arising from the insolvency or financial default of the vessel owner, manager, charterer or operator, where you knew or ought reasonably to have known that it could prevent the voyage at the time of loading. The 2009 revision softened this: an assured who bought in good faith under a binding contract is protected. But if the carrier's financial trouble is public knowledge and you loaded anyway, you carry it.
Unseaworthiness and unfitness
Clause 5 excludes unseaworthiness of the vessel and unfitness of the container or conveyance, where you were privy to it. The important half is the second: if your own staff accept a container with a hole in the roof, a broken door seal or a failed floor, and the cargo is water damaged, that is your knowledge of unfitness.
Inspect the container before stuffing, and photograph it. Two minutes of work that decides claims.
War, strikes and terrorism
Clauses 6 and 7 exclude war, civil war, capture, seizure, mines and derelict weapons, and separately strikes, riots, civil commotions, terrorism and politically motivated acts. Both are bought back through the Institute War Clauses and Institute Strikes Clauses, which is routine on most trades and expensive on a few. Ask specifically whether your policy includes them rather than assuming.
Wilful misconduct
Clause 4.1 excludes loss attributable to your own wilful misconduct. Not negligence, which is covered, but deliberate acts.
What to do about it
- Pack for the transit you booked, and keep the packing specification on file.
- Survey and photograph the container before loading, every time.
- Use data loggers for anything moisture or temperature sensitive, so the cause of damage is evidenced rather than argued.
- Confirm war and strikes cover is in force for your route.
- Read the policy, not the brochure. Wordings are amended by endorsement and yours may differ from the standard clauses.
General guidance, not insurance advice. Your own policy wording governs, and case law on several of these exclusions is unsettled.
