Cargo Insurance ICC A, B, C: Choosing Cover for Cosmetics
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Marine cargo insurance is usually written on the Institute Cargo Clauses (ICC) (A), (B) or (C): (A) is the widest cover and (C) the narrowest. Under Incoterms® 2020, CIF still defaults to ICC (C), while CIP now requires cover in line with ICC (A).
Cosmetics shipments are full of glass, liquids and heat-sensitive textures, so look beyond the clause letter to the general exclusions and the packing conditions. Here is how to choose cargo insurance with ICC A, B and C, step by step.
Step 1: Use the Incoterms® rule to see who insures
Start with the trade term. The International Chamber of Commerce’s Incoterms® 2020 page says that under CIF “the Institute Cargo Clauses (C) remains the default level of coverage”, with the parties free to agree more, and that CIP now requires a higher level of cover compliant with Institute Cargo Clauses (A).
Under other terms such as EXW, FCA or FOB, the seller has no insurance obligation under the Incoterms® rules, so whoever carries the risk decides whether to insure. Cost splits are compared in FOB vs EXW vs DDP; terms are explained in our export trade terms glossary.
Step 2: Compare cargo insurance ICC A, B and C
Swipe sideways to see the whole table.
| ICC (A) | ICC (B) | ICC (C) | |
|---|---|---|---|
| Basis | All risks, except exclusions | Named perils only | Named perils only (narrowest) |
| Fire or explosion | Covered | Covered | Covered |
| Vessel stranded, sunk or capsized; land conveyance overturned or derailed | Covered | Covered | Covered |
| Collision or contact | Covered | Covered | Covered |
| Earthquake or lightning | Covered | Covered | Not covered |
| Sea, lake or river water entering vessel or container | Covered | Covered | Not covered |
| Other accidental damage | Covered unless excluded | Not covered unless named | Not covered unless named |
This table draws on insurer Generali’s marine cargo overview and on the ICC (C) wording. Generali calls ICC (A) “the widest form of cover”, describes (B) as named perils such as fire or explosion, vessel sinking or stranding, collision, earthquake or lightning and water entering the vessel or container, and (C) as a narrower list than (B).
An Icelandic insurer’s published translation of ICC (C) lists its perils as fire or explosion; vessel stranded, grounded, sunk or capsized; overturning or derailment of land conveyance; collision or contact with any external object other than water; discharge at a port of distress; general average sacrifice; and jettison.
Always check the clause wording in your actual policy.
Step 3: Read the general exclusions
The exclusions matter most for cosmetics. The ICC (C) wording excludes, among other things:
- ordinary leakage, ordinary loss in weight or volume, and ordinary wear and tear;
- loss caused by packing or preparation that is insufficient or unsuitable to withstand ordinary transit, where the packing was done by the assured or before cover started (including stowage in a container);
- loss caused by inherent vice or the nature of the goods;
- loss caused by delay.
ICC (A) covers all risks, but only outside its exclusions. A bottle broken because packing was weak, a small leak within normal limits or a change caused by the product’s own nature may therefore not be recoverable, depending on the wording and the facts.
Step 4: Plan for risks specific to cosmetics
Ask your insurer or broker specific questions before you buy:
- Breakage: glass bottles, ampoules and droppers. Is accidental breakage covered, and are there packing standards?
- Leakage: toners, oils and cleansing oils. How does the policy separate “ordinary leakage” from accidental spillage?
- Heat and temperature swings: balms, creams and sunscreens can change texture in heat. Is temperature-related damage covered, or is an extension available?
Insurance will not solve everything. Photos of packed cartons and a carton-by-carton list made before dispatch help a great deal when you claim. Storage conditions are covered in cosmetics storage conditions.
Step 5: Prepare documents before anything goes wrong
A claim usually needs the insurance certificate or policy, commercial invoice, packing list, bill of lading or air waybill, photos of the damage and a copy of the notice of damage sent to the carrier. Notice deadlines differ by transport mode; see damaged shipment claims.
Related pages: Brands we supply · FAQ · Contact us · Damaged shipment claims · Cosmetics storage conditions · Proforma vs commercial invoice
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