Pana Harrison places marine cargo insurance from Kuala Lumpur and Miri, for companies shipping goods in and out of Malaysia. Below: what each clause covers, who insures under each Incoterm, and what a claim needs.
Every cargo policy names a clause: A, B or C. Here is what each one pays for.
| If the goods are lost or damaged by | AWidest | B | CNarrowest |
|---|---|---|---|
| Named in all three clauses | |||
| Fire or explosion | Covered | Covered | Covered |
| The vessel stranded, grounded, sunk or capsized | Covered | Covered | Covered |
| A truck overturned or a train derailed | Covered | Covered | Covered |
| Collision or contact with any object other than water | Covered | Covered | Covered |
| Cargo discharged at a port of distress | Covered | Covered | Covered |
| General average sacrifice, and jettison | Covered | Covered | Covered |
| Added by Clause B | |||
| Earthquake, volcanic eruption or lightning | Covered | Covered | Outside this clause |
| Washing overboard | Covered | Covered | Outside this clause |
| Sea, lake or river water entering the vessel, container or store | Covered | Covered | Outside this clause |
| A whole package lost overboard or dropped while loading or unloading | Covered | Covered | Outside this clause |
| Only Clause A | |||
| Any other accidental loss or damage, such as theft or rough handling | Covered | Outside this clause | Outside this clause |
| Deliberate damage by someone else's wrongful act | Covered | Outside this clause | Outside this clause |
All three also pay general average and salvage charges, and your share under a both-to-blame collision clause. Read from the Institute Cargo Clauses (A), (B) and (C) 1/1/09 of the Lloyd's Market Association and the International Underwriting Association, as printed in a Malaysian insurer's marine cargo wording, 29 September 2026.
When the goods are first moved in the warehouse to be loaded.
Road, port, sea and transhipment, in the ordinary course of the journey.
Cover runs up to 60 days after the goods leave the ocean vessel.
When unloading finishes at the final warehouse, or at day 60, whichever comes first.
Put it on every shipment.
A, B and C leave war, strikes, riots and terrorism to their own clauses. Add the Institute War and Strikes Clauses (Cargo) to every shipment.
Packing is part of the cover.
Loss from packing or container stowage unfit for the journey sits with the shipper. Send us the packing plan and we put it in front of the underwriter.
The right words buy the right clause.
Ordinary leakage, normal loss in weight and the nature of the goods sit outside every clause. An exact description lets us match the clause to the cargo.
Tell us the date that costs you money.
Loss caused by delay falls outside all three clauses. Knowing your deadline lets us plan the route and cover around it.
A covers the most, so it carries the higher rate. C carries the lowest.
What they are, how fragile they are, and how they are packed.
The ports, the distance and every transhipment on the way.
The vessel, or air or road, and how the goods are stowed.
A single shipment, or an annual open cover for every shipment you make.
Past claims, the deductible you carry, and war and strikes cover.
Find the term on your sales contract. Its row shows where the risk moves and who must buy cover.
| Incoterm | Risk passes to the buyer | Risk at sea | Insurance the rule requires |
|---|---|---|---|
| The buyer carries the main voyage | |||
| EXWEx Works | When the goods are put at the buyer's disposal at the named place | Buyer | Each side insures its own risk |
| FCAFree Carrier | When the goods are handed to the carrier the buyer named | Buyer | Each side insures its own risk |
| FASFree Alongside Ship | When the goods are alongside the buyer's vessel at the port of shipment | Buyer | Each side insures its own risk |
| FOBFree On Board | When the goods are on board the buyer's vessel at the port of shipment | Buyer | Each side insures its own risk. The seller carries the leg from its warehouse to the ship |
| CFRCost and Freight | When the goods are on board the seller's vessel; the seller pays the freight | Buyer | Each side insures its own risk |
| CPTCarriage Paid To | When the goods are handed to the seller's carrier; the seller pays the carriage | Buyer | Each side insures its own risk |
| The seller must buy cover for the buyer | |||
| CIFCost, Insurance and Freight | When the goods are on board the seller's vessel at the port of shipment | Buyer | Seller insures at Clause C as a minimum, for at least 110% of the contract price |
| CIPCarriage and Insurance Paid To | When the goods are handed to the seller's carrier | Buyer | Seller insures at Clause A, for at least 110% of the contract price |
| The seller carries the voyage | |||
| DAPDelivered at Place | At the named destination, ready for unloading | Seller | Each side insures its own risk |
| DPUDelivered at Place Unloaded | At the named destination, once unloaded | Seller | Each side insures its own risk |
| DDPDelivered Duty Paid | At the named destination, cleared for import | Seller | Each side insures its own risk |
FAS, FOB, CFR and CIF are for sea and inland waterway transport. Source: International Chamber of Commerce, Incoterms 2020, and the ICC Academy guides to delivery and risk transfer, read 1 October 2026.
| Compared | Open cover | Single shipment |
|---|---|---|
| Suits | A company that ships regularly | An occasional or one-off shipment |
| Runs for | An agreed period, usually a year | One voyage, warehouse to warehouse |
| A shipment is covered | As it starts, within the agreed terms | Once the policy is placed, before the goods move |
| Rates | Agreed once for the period | Quoted on that shipment |
| Your part | Declare every shipment, every time | Ask for cover before each shipment |
The policy asks you to protect your rights against the carrier. Six steps do it.
Examine the container and its seals on delivery. Note a broken seal on the receipt and keep the seal.
Give a clean receipt for goods in sound condition. Sign for anything doubtful under written protest.
Claim at once on the carrier, the port or the warehouse holding the goods.
Where damage shows, ask for a survey straight away and claim on the carrier for what it finds.
Damage found after delivery goes to the carrier in writing within 3 days.
Every letter to and from the carrier joins the claim.
The policy or the certificate of insurance.
Shipping invoices, with the shipping specification or weight notes.
The bill of lading or other contract of carriage.
The survey report, or other evidence of the extent of the loss.
The landing account and weight notes at the final destination.
Your correspondence with the carriers about their liability.
From the claims procedure and documentation notice printed with the Institute Cargo Clauses in a Malaysian insurer's marine cargo policy wording, read 1 October 2026.