Return to Webmag Home
Marine
07 minutes

What do you mean it’s not covered!!!

“All risks” cargo insurance is widely misunderstood. This article clarifies what the cover truly provides, and what it doesn’t, by unpacking fortuity, inherent vice, packing obligations, and evidence requirements. Practical guidance helps brokers set clear expectations, avoid weak claims, and place cleaner, better-structured risks.
Written by
Malcolm Hartwell and Nick Veldman
Published on
December 8, 2025
Copy link

What “All Risks” really covers in Cargo Insurance

Many cargo disputes turn on one question: was the loss caused by an external, accidental event, or did it arise from the goods themselves? “All risks” does not mean every loss. It means all fortuitous risks. Under the Institute Cargo Clauses (A) (2009), the insured must show an accidental external cause. Losses that fit predictable patterns of deterioration, moisture behaviour, compression or instability will often fall outside the cover. Brokers who understand this can manage expectations at placement and avoid weak claims later.

“All risks” is not blanket cover - “All risks” policies respond to accidental external loss or damage. They do not cover deterioration that happens because of the nature of the goods. The insured must first point to something that indicates an external factual and legal cause. If the damage is consistent with normal behaviour of the cargo in ordinary circumstances, the claim will not engage the policy.

This remains the central issue in claims involving steel, perishables, commodities, machinery and temperature-sensitive loads. Survey photographs may show damage, but without evidence of an accidental event, there is no fortuity and no cover.

Fortuity is the real dividing line - Claims succeed when there is an identifiable external event such as water ingress, impact, abnormal temperature deviation, mishandling or unexpected pressure. Claims fail where no such event can be shown.

Typical examples include:

  • corrosion on steel caused by condensation from routine voyage temperature swings
  • mould in seeds, nuts or grains linked to moisture content at loading and normal respiration
  • bagged cargo collapsing under ordinary compression without abnormal forces
  • machinery rusting internally when shipped damp, with no water ingress
  • fires involving lithium batteries where thermal runaway begins inside the cell due to internal defects or instability. Without evidence of an external trigger, these events may not satisfy the requirement of fortuity

These outcomes are predictable. They reflect the behaviour of the cargo rather than a marine accident. The cover is triggered by fortuity, not by certainty.

Inherent vice is driving more claims - Inherent vice is the natural tendency of the goods to deteriorate without an external cause. It is excluded under ICC(A). The modern approach is straightforward. If a fortuitous external accident occurs, that will usually prevent an inherent vice finding. If the damage flows entirely from the goods themselves, the exclusion applies.

This arises most often with:

  • steel (condensation driven corrosion)
  • perishables (ripening, fermentation, ageing)
  • bulk commodities (temperature rise from internal moisture)
  • cocoa, coffee, nuts and seeds (mould formation)
  • chemicals with known instability or self-heating issues

Lithium batteries are a growing example. Thermal runaway can start inside the cell without any external accident. Where ignition is driven by an internal defect, contamination or instability, the loss may fall within the inherent vice exclusion unless the insured can show a fortuitous trigger. Brokers should confirm compliance with testing, packing and state-of-charge requirements before placement.

When a surveyor reports no evidence of an external event, the claim is already trending toward inherent vice. In a market of hotter or colder voyages, congestion and longer inland dwell times, these patterns are becoming more common.

“‘All risks’ does not mean every loss. It means all fortuitous risks.”

Malcolm Hartwell and Nick Veldman
Head of Transport and Director, Norton Rose Fulbright

Packing and preparation remain decisive - The 2009 Clauses exclude loss caused by insufficient or unsuitable packing or preparation to withstand the ordinary incidents of the insured transit, where that packing or preparation was done by the insured or its employees, or where it was done before attachment. Packing includes container stowage.

Important distinctions:

  • Poor packing by the insured before attachment is excluded even if a third party performed it.
  • Poor packing by an independent contractor after attachment is not within this exclusion, although causation issues remain.
  • Failing to take expected precautions against moisture, such as using no liners or moisture inhibitors for machinery or hygroscopic goods, can fall within insufficiency of preparation.

Insureds often assume packing is the carrier’s problem. It is not. If the cargo is loaded into the container in poor condition before the transit begins, the policy is not designed to fix that.

Practical questions at placement:

  • Who packs the container?
  • Are coils chocked and braced?
  • Is a ventilated unit used for hygroscopic goods?
  • Are there photos, pre-cooling logs or stuffing records?
  • Has this cargo travelled successfully under similar conditions before?

Temperature and moisture claims turn on evidence - A temperature spike or condensation event is not automatically fortuitous. The issue is whether it was accidental and abnormal, and whether it caused the loss. Much will turn on policy wording, for example whether cover requires a continuous breakdown of the reefer machinery for a specified period.

For reefer claims, adjusters look for the set point, supply and return-air temperatures, alarms, evidence of hot stuffing and pre-cooling records. Without these, it is difficult to show the loss resulted from an accidental malfunction rather than the natural behaviour of the produce.

For steel and bulk cargoes, pre-shipment moisture content, ventilation, voyage data and dew point conditions matter. If the pattern of damage reflects predictable condensation cycles, the claim is weak.

Misdelivery, non-delivery and shortage - Two points help brokers manage expectations.

Unexplained shortage. ICC(A) does not include a general unexplained shortage exclusion. The challenge is proving a fortuitous loss during the insured transit. Ordinary leakage or normal loss in weight or volume is excluded. Seal integrity, tally records and custody logs usually decide these claims.

Misdelivery. Physical deprivation of the goods due to wrongful delivery can fall within the core grant of cover for loss of cargo. But many policies add endorsements excluding delivery without production of an original bill of lading or similar. Losses arising from fraud or forged documents without physical loss are typically not covered unless the policy expressly extends to them.

What brokers can do at placement - Three steps consistently improve outcomes.

  • Understand how the cargo behaves. If it deteriorates easily or carries inherent moisture, address that early in packing and carriage requirements.
  • Match the policy to the logistics. Many claims fail because the goods are no longer in transit when the damage occurs.
  • Set expectations about evidence. All risks claims are evidence driven. Clients must know early on that logs, surveys, tallies and temperature records are essential.

Conclusion

“All risks” does not remove the need for fortuity. The nature of the cargo, the quality of the packing and the availability of evidence still set the boundaries. Brokers who raise these issues at placement place cleaner risks and avoid claims that fail for reasons that could have been anticipated. In a market where scrutiny is increasing, that clarity matters.

Unified Pricing, Rating, and Underwriting for Profitable Growth.

The Earnix platform provides integrated predictive, generative, and agentic AI to power intelligent decisioning across the full underwriting, pricing, rating, and personalisation cycle. Our leading platform helps insurers and banks optimise and perform with agility.

Let us help you with your goals

Dashboard mockup