The Institute Cargo Clauses are the London market’s standard terms defining what a cargo insurance policy covers. There are three levels: (A), covering all risks except those excluded, and (B) and (C), covering only named perils. They are published by the Lloyd’s Market Association (LMA) and the International Underwriting Association (IUA); the current edition dates from 2009.
What each Institute Cargo Clause covers
| Clause | Cover |
|---|---|
| (C) | Minimum cover. Named perils: fire or explosion, stranding, sinking or capsizing, overturning or derailment of land conveyance, collision, discharge at a port of distress, general average sacrifice and jettison |
| (B) | Everything in (C), plus earthquake, volcanic eruption or lightning, washing overboard, entry of water into vessel, container or place of storage, and total loss of a package lost overboard during loading or unloading |
| (A) | All risks of loss or damage, except the general exclusions |
All three exclude, among other things, insufficient packing (including stowage in the container), inherent vice, ordinary leakage or loss of weight, and delay. War and strikes have separate clauses.
When they matter for imports from China
Incoterms refer to them: under CIF the seller only has to buy minimum cover, Clauses (C), and under CIP broad cover, Clauses (A). A shortage or handling damage is not covered by (C). For valuable cargo, ask for (A) even if the agreed incoterm is CIF.
The common mistake
Seeing “insured” on a quote without asking which clause. And believing (A) covers everything: poor packing is still excluded, which is why pre-shipment inspection matters too.
Want to review the cover on your import? We look at it together with your cargo insurance as part of our logistics from China.
Sources: LMA and IUA, Institute Cargo Clauses (A), (B) and (C), 1/1/2009 (reproduced in the Lloyd’s Agency manual); ICC Academy, CIP or CIF in Incoterms 2020. Current as of October 14, 2026.
