Marine cargo insurance covers goods from the point of origin to the destination. However, the scope of coverage is defined by standard international terms known as Institute Cargo Clauses (A, B, or C). Many small businesses choose the cheapest option, Clause C, without understanding the huge gap in coverage, especially during the loading and unloading phases.
The Unloading Mishap
A machinery distributor imported a high-end CNC machine worth ₹45 Lakhs. During unloading at the client's factory site, the crane sling snapped, dropping the machine from a height of 10 feet and cracking the main frame beyond repair. The distributor, confident that they had an active marine transit policy, filed a claim immediately.
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The ICC Clause C Exclusion
The surveyor reviewed the policy and found it was issued under 'Institute Cargo Clause C' (ICC C). Clause C only covers major catastrophic events like vessel grounding, fire, explosion, or vehicle collision. It does not cover accidental drop, handling damage, theft, or loading/unloading mishaps. Since the crane accident did not involve a collision of the carrying vehicle, the claim was rejected in full. The distributor had to absorb a ₹45 Lakh loss.
- Always opt for Institute Cargo Clause A (ICC A) 'All-Risks' cover for high-value cargo and machinery.
- Verify that your marine policy explicitly includes loading and unloading cover endorsements.
- Ensure the 'Warehouse to Warehouse' clause is active, covering the cargo until it is safely placed inside the final destination.
- Check the crane operator's third-party liability insurance before authorizing complex unloading operations.