Marine Cargo Insurance for UAE Importers & Exporters

How Cover Is Structured: Institute Cargo Clauses A, B and C

All standard cargo policies placed in the London market or through specialist underwriters in the UAE are written on one of three Institute Cargo Clauses (ICC) bases — A, B or C. The difference matters enormously to you as the cargo owner, not as a technicality but as a direct statement of what losses you can recover.

ICC (A) is the broadest form: it covers all risks of physical loss or damage to your cargo except for a defined list of exclusions. ICC (B) and ICC (C) are named-perils forms — they only respond to the specific causes of loss listed in the clause. For most commercial cargo moving through UAE ports, ICC (A) is the appropriate starting point. ICC (C) may be acceptable for low-value bulk commodities where the premium saving justifies the narrower cover, but if your cargo is machinery, electronics, perishables or project equipment, ICC (C) leaves you exposed to the majority of real-world loss scenarios.

Whichever clause basis you use, the policy attaches on a warehouse-to-warehouse basis under the transit clause, meaning cover follows your cargo from the point of departure through transhipment and on to final destination. If your goods are transhipping through a hub port — a common routing for GCC importers receiving cargo from Asia or Europe — confirm with us that the transhipment point is not subject to a separate condition or exclusion in your policy wording.

What Is and Is Not Covered — The Exclusions That Catch UAE Buyers

Even on ICC (A), there are exclusions that regularly affect UAE importers and exporters. Understanding them before a loss occurs is the only way to manage the exposure.

The inherent vice exclusion means that if your cargo deteriorates because of its own nature — fruit ripening, metal corroding, rubber degrading — the policy will not respond unless you can show an external insured peril caused or accelerated the damage. For perishable cargo moving through the Gulf in summer, this is a live issue: temperature excursion claims are frequently contested on inherent vice grounds unless you have a refrigerated container clause and can produce temperature logs.

Delay is excluded under all three ICC forms. If your cargo arrives late and your buyer cancels the contract, or you incur demurrage, the cargo policy does not respond. That exposure sits with your freight forwarder's liability or a separate trade credit facility. Similarly, loss of market — the fall in value of your goods because the market moved while they were in transit — is not a cargo insurance loss.

Packing and preparation exclusions are also frequently invoked. If your cargo is insufficiently packed for the voyage — and 'the voyage' includes the mechanical handling at Jebel Ali, one of the highest-throughput container terminals in the world — underwriters will argue the loss arose from inadequate packing, not from an insured peril. Export packing standards matter.

• Typically covered under ICC (A): theft, pilferage, non-delivery, collision, fire, explosion, vessel sinking or stranding, washing overboard, water ingress, hook damage, general average contributions
• Typically excluded across all ICC forms: inherent vice, delay, loss of market, wilful misconduct of the assured, inadequate packing, nuclear/biological/chemical risks
• Requires separate endorsement or standalone cover: war, strikes, riots and civil commotion (SRCC), malicious damage

War, Hormuz and Bab-el-Mandeb: The UAE-Specific Risk Layer

If your cargo moves through the Strait of Hormuz, the Gulf of Oman, the Red Sea or the Gulf of Aden, you are operating in or adjacent to areas that specialist underwriters treat as elevated war and strikes risk zones. The Joint Cargo Committee (JCC) publishes listed areas where standard Institute War Clauses (Cargo) apply additional conditions or where cover requires specific agreement. These designations are reviewed regularly and have changed materially in recent years as the security environment in the Red Sea has deteriorated.

War and strikes cover for cargo is not included in the base ICC policy — it must be added separately, typically on Institute War Clauses (Cargo) and Institute Strikes Clauses (Cargo). For UAE exporters shipping to or through the Red Sea corridor, and for importers receiving cargo that transits Bab-el-Mandeb, this is not optional cover. The premium for war and strikes cover on these routes has moved significantly with the security environment, and the terms — including any voyage warranties or deviation conditions — need to be reviewed at each renewal or when your routing changes.

If your vessel or the carrying vessel is flagged, owned or managed by a party subject to sanctions, your cargo cover may be void. UAE-based cargo owners sourcing goods from or selling into sanctioned jurisdictions need to confirm with us that their policy wording does not contain a sanctions exclusion that would leave them uninsured on an otherwise valid loss. This is a compliance issue as much as an insurance issue, and it needs to be addressed before cargo moves, not after a loss.

General Average, Sue and Labour, and Your Obligations as Cargo Owner

General average is one of the oldest principles in maritime law and one of the most misunderstood by cargo owners. When a shipowner declares general average — typically after a serious incident such as a fire, grounding or machinery failure requiring extraordinary expenditure to save the adventure — every cargo owner on that vessel becomes liable to contribute to the shared loss in proportion to the value of their cargo. Under the York-Antwerp Rules (the version incorporated into your bill of lading will specify which edition), you may be required to post a general average bond and cash deposit before your cargo is released.

If you have a cargo policy in place, your underwriters will typically provide the general average guarantee and bond on your behalf, allowing you to recover your cargo without posting cash. If you are uninsured or underinsured, you face the choice of posting cash from your own funds or leaving your cargo in the shipowner's hands. For high-value cargo moving on large container vessels, general average contributions can be substantial.

The sue-and-labour clause in your cargo policy requires you to take reasonable steps to minimise a loss once an insured peril has occurred — and it entitles you to recover the reasonable costs of doing so from your underwriters, even if those efforts ultimately fail to save the cargo. In practice, this means you should act immediately when cargo is damaged or at risk: arrange surveys, engage salvors if appropriate, and notify us without delay. Failure to act can give underwriters grounds to reduce their liability.

Carriage Contracts, Bills of Lading and the Limits of Carrier Liability

Your bill of lading is a contract of carriage, a receipt for goods and a document of title. The liability regime it incorporates — whether Hague-Visby Rules, Hamburg Rules or, for newer contracts, Rotterdam Rules — determines how much you can recover from the carrier if they lose or damage your cargo. Under Hague-Visby, carrier liability is capped at a low per-package or per-kilo limit expressed in Special Drawing Rights (SDRs). For most commercial cargo, that cap is a fraction of the actual value of the goods.

This is the structural reason why cargo insurance exists: the carrier's liability under the applicable carriage convention is almost always insufficient to make you whole. Your cargo policy responds to the full insured value of your goods, not to the carrier's capped liability. When you recover from your underwriters, they will subrogate against the carrier for whatever the carrier owes — but that is their problem to pursue, not yours.

UAE importers and exporters selling on CIF or CIP Incoterms are responsible for arranging cargo insurance on behalf of the buyer up to the named destination. If you are selling on FOB or EXW terms, the buyer is responsible for their own insurance from the point of risk transfer — but in practice, many UAE exporters arrange open cover policies that can be extended to cover FOB sales where the buyer has not confirmed their own cover is in place. Discuss your Incoterms mix with us when we structure your open cover.

Open Cover vs Voyage Policy: What Works for UAE Trading Volumes

If you are moving cargo regularly — multiple shipments per month across different origins, destinations and commodity types — a voyage-by-voyage policy is operationally unworkable. An open cover (sometimes called a floating policy or open policy) is the standard solution: it provides an agreed framework of terms, conditions, limits and premium rates under which you declare individual shipments as they move. You are covered from the moment the cargo is at risk, provided the shipment falls within the scope of the open cover.

Open covers are typically structured with a per-sending limit (the maximum value of any single shipment covered under the policy) and an annual aggregate or premium deposit. If your cargo values or shipment frequencies change materially during the policy year — because you win a large contract, change commodity, or open a new trade lane — you need to notify us so the open cover can be endorsed accordingly. Sending a shipment that exceeds your per-sending limit without endorsement means you are uninsured for the excess.

For one-off or infrequent shipments, a voyage policy is simpler and more cost-effective. It covers a single named shipment from a named origin to a named destination on agreed terms. The trade-off is that you must arrange cover before each shipment moves, which requires more lead time and administrative discipline. For UAE importers with predictable supply chains, an open cover almost always makes more sense.

• What to bring when requesting an open cover: commodity description, annual shipment volume and value, typical per-sending value, origins and destinations, Incoterms used, packing and containerisation details, any known high-value or unusual shipments
• What to bring for a voyage policy: full cargo description, packing details, vessel name and flag, bill of lading date, origin and destination ports, insured value (CIF + 10% is standard), any special conditions in the sale contract

Frequently asked questions

Do I need cargo insurance if my freight forwarder already has liability cover?

Your freight forwarder's liability cover protects them against claims you bring against them — it does not protect your cargo. Their liability is also capped, typically under FIATA standard trading conditions or the applicable carriage convention, and subject to proof of their negligence. Your own cargo policy responds to the insured value of your goods regardless of fault. The two covers serve different purposes and you need both.

What happens if my cargo is damaged during transhipment at a hub port outside the UAE?

Provided the transhipment port is not excluded from your policy and the shipment falls within your open cover or voyage policy terms, your cover continues through transhipment. The warehouse-to-warehouse transit clause covers the full journey. If your cargo is held in a transhipment hub for an extended period — beyond the standard 60-day storage extension in most ICC policies — you should notify us so we can confirm or extend cover.

How quickly can cover be bound for a shipment that is already at the port?

For a straightforward commodity on standard ICC terms, we can typically bind cover within a few hours of receiving the full shipment details. For unusual cargo, high-value shipments, or routes through elevated-risk areas such as the Red Sea, underwriters may require more information and additional time. The key rule is to contact us before the cargo is at risk — cover cannot be backdated to attach before the point of notification.

My sale contract is on CIF terms — does that mean the buyer is covered under my policy?

Under CIF Incoterms, you are obliged to arrange cargo insurance for the buyer's benefit to the named destination port. The policy should be assignable to the buyer and issued in a transferable form so they can claim directly if goods arrive damaged. When we structure your open cover or voyage policy for CIF sales, we ensure the policy wording and certificate format meet standard letter-of-credit and documentary credit requirements.

What does a general average declaration mean for my cargo, and how does my insurance help?

When a shipowner declares general average, your cargo is effectively held as security for your proportionate contribution to the shared loss. Before the shipowner releases your goods, they will require a general average bond signed by you and, usually, a cash deposit or guarantee. If you have cargo insurance in place, your underwriters will issue the general average guarantee on your behalf, allowing your cargo to be released without you posting cash. Notify us immediately if you receive a general average notice — time matters.

Does my cargo policy cover war risks on Red Sea or Gulf of Oman routings?

Not automatically. War and strikes cover must be added separately under Institute War Clauses (Cargo) and Institute Strikes Clauses (Cargo). For cargo transiting the Red Sea, Gulf of Aden or Strait of Hormuz, this cover is essential and we will include it in any proposal for those trade lanes. The terms and conditions for war cover on these routes are subject to the current security environment and JCC listed area designations, so they need to be reviewed whenever your routing changes.