Cargo insurance: what ICC (A), (B) and (C) cover The carrier pays per kilo. Insurance pays the value.

Carrier liability and insurance

A carrier pays only for damage it is liable for, and even then only up to a limit per kilogram or per package; the limits vary by mode and are on the carrier liability limits page. A forwarder's compulsory liability insurance covers its liability too, not the cargo (the forwarder in Turkish law).

Cargo insurance does not ask who was at fault. It asks whether a risk covered by the policy occurred, and pays up to the sum insured. Once the insurer has paid, it takes over the insured's rights against the carrier to the extent of its payment (TTK art. 1472/1). That is why preserving rights against the carrier is also the insured's duty.

(A), (B), (C) in one table

The clauses are published by the Lloyd's Market Association (LMA) and the International Underwriting Association (IUA); the current version is dated 1 January 2009. The table shows which risk is covered under which clause, subject to the exclusions.

Excluded under all three

• Wilful misconduct of the insured (cl. 4.1).
• Ordinary leakage, loss in weight or volume, and wear and tear (cl. 4.2).
• Insufficient or unsuitable packing, where the packing was done by the insured or their employees or before the cover started. Stowage in a container counts as "packing" (cl. 4.3).
• Inherent vice or nature of the goods (cl. 4.4).
• Delay, even if caused by an insured risk (cl. 4.5).
• Insolvency of the shipowner or vessel operator, where the insured knew or in the ordinary course of business should have known of it at loading (cl. 4.6).
• Unfitness of the vessel, conveyance or container, where the insured was aware of it at loading (cl. 5).
• War and strikes risks (cl. 6–7). These are added with the separate Institute War Clauses (Cargo) and Institute Strikes Clauses (Cargo).

When cover starts and ends

The 2009 clauses work "warehouse to warehouse". Cover starts when the goods are first moved in the warehouse named in the policy for immediate loading onto the vehicle, and continues during the ordinary course of transit (cl. 8.1). It ends at whichever of these comes first:

• completion of unloading from the vehicle at the final warehouse at destination,
• completion of unloading at any other warehouse the insured chooses for storage or distribution,
• when the insured starts using a vehicle or container for storage outside the ordinary course of transit,
• 60 days after completion of discharge from the vessel at the final port of discharge (cl. 8.1.4).

Under the air clause, the outer limit is 30 days after completion of unloading from the aircraft (Air cl. 6.1.4).

The Turkish general conditions

In Türkiye, cargo transport insurance is governed by the Cargo Transport Insurance General Conditions (Emtia Nakliyat Sigortası Genel Şartları; in force 1 January 1953, last revised 11 May 2002). They do not refer to the ICC and differ on some points:

• Duration: cover starts when the goods are handed to the carrier and ends on delivery or at the latest at the end of the 15th day after discharge. If the transport was entrusted to a forwarding firm, it starts when that firm takes over the goods and ends at the latest 30 days after discharge (art. 8).
• Deductible: unless the special conditions say otherwise, a 3% deductible applies to particular average; it does not apply in cases such as sinking, stranding, collision, fire, explosion and discharge at a port of distress (art. 20).
• Insured value: for manufactured and semi-finished goods, the value at the place of loading plus costs, non-returnable freight, premium and a 10% profit margin. If the sum insured is lower, the claim is reduced in the same proportion (art. 25).

Türkiye Sigorta Birliği (TSB), the association of insurers in Türkiye, publishes a Turkish text of the ICC under the name "Enstitü Yük Klozları"; that text is the 1982 version (CL.252). The 1982 text excludes insufficient packing whoever did the packing; the 2009 text only packing by the insured or before cover started. Check which version your policy names.

Under the Insurance Law, residents of Türkiye must insure their insurable interests in Türkiye with insurers operating in Türkiye, but cargo insurance for goods being exported or imported can also be placed abroad (Law No. 5684 art. 15/2-a).

When there is damage

• Minimise the loss: the insured must take reasonable measures to avert or minimise the loss and preserve and exercise all rights against carriers, bailees and other third parties; the insurer reimburses the reasonable costs of doing so on top of the claim (ICC cl. 16).
• Note reservations with the carrier: a damage report on delivery and written notice in time preserve the insurer's right of recovery. An insured who prejudices the rights passed to the insurer is liable to the insurer (TTK art. 1472/2).
• Law: the ICC are subject to English law and practice (cl. 19). In a policy governed by Turkish law, the burden of proving that a risk falls outside the cover lies with the insurer (TTK art. 1409/2).

When it goes wrong

The (C) cover that comes with CIF does not cover theft

The minimum cover a CIF seller must provide is (C), and (C) does not list theft or water entry. A buyer who wants wider cover must write it into the sales contract or take out additional insurance itself.

The damage comes from insufficient packing

If the sender did the packing or container stowage itself and the damage results from it, no clause pays, (A) included. For sensitive cargo, choose packing that suits the conditions of carriage.

The goods sit at the port of arrival

Under the ICC, cover ends 60 days after discharge from the vessel; under the Turkish general conditions, much earlier. If a long storage or customs wait is expected, ask the insurer about an extension in advance.

The goods are taken over without noting reservations with the carrier

If the insurer pays but cannot recover from the carrier, the consequences of the conduct that prevented recovery can fall back on the insured (TTK art. 1472/2). Make a damage report on a damaged delivery.