Coverage A of the Institute Marine Cargo Clauses

From Supply Chain Management Encyclopedia

The first general policy is referred to as Coverage A of the Institute Marine Cargo Clauses. Coverage A is quite similar to a traditional "All Risks" policy, in that it covers all risks of loss or damage to the subject-matter insured, yet it is not identical to one. For one, it is written in plain English, which makes it much simpler to decipher. Moreover, unlike traditional "All Risks" policies, which can be written with U.S. or British clauses (and the different interpretations they imply) a policy written with Coverage A of the Institute Marine (See Table 1. below) Cargo Clauses is identical in all countries. Despite its name, a Coverage A policy (and an All Risks policy) is not truly an All Risks policy, as it covers all perils except the some of them (improper packing, inherent vice, ordinary leakage, unseaworthy vessel, and nuclear war), as well as a number of risks for which specific additional coverage must be purchased separately as endorsements to the main policy: strikes and other civil disturbances (Strikes, Riots, and Civil Commotions) and acts of war and seizure by a government (Free of Seizure and Capture). Nevertheless, Coverage A of the Institute Marine Cargo Clauses is the maximum coverage that an exporter or an importer would need to purchase in the case of a shipment for most trade lanes in the world, specifically from a developed country to another, as long as the route does not cross a particularly hot spot of the world.

Table 1. Marine Insurance Coverage Summary

The Incoterms rules and insurance ^[2]

References

1. ↑ ^{1.0 1.1 1.2 1.3} Under an FPA policy, any partial loss incurred would not be covered unless it is due to a ship sinking, burning, becoming stranded, or being involved in a collision; a total loss would be covered
2. ↑ Guide to Incoterms 2010: Understanding and Practical Use / by J. Ramberg – ICC Publication No 720E, 2010 edition