The single most important choice when buying cargo insurance is between All Risks and Named Perils coverage. The difference determines exactly what’s protected, and what isn’t, if something goes wrong with your shipment. This guide breaks down both options clearly.
Table of Contents
- What Is All Risks Coverage?
- What Is Named Perils Coverage?
- Side-by-Side Comparison
- Which Should You Choose?
- Frequently Asked Questions
What Is All Risks Coverage?
All Risks coverage (formally, Institute Cargo Clauses A) protects against loss or damage from any external cause, except for a specific, limited list of exclusions stated in the policy. Rather than listing what’s covered, it works the opposite way: everything is covered unless explicitly excluded, making it the broadest standard tier of marine cargo insurance.
What Is Named Perils Coverage?
Named Perils coverage (typically Institute Cargo Clauses C, with Clauses B as a middle tier) only covers loss or damage caused by specific risks explicitly listed in the policy, such as fire, sinking, stranding, or collision. If a loss occurs from a cause not on that list, it simply isn’t covered, regardless of how the damage happened.
Side-by-Side Comparison
| Factor | All Risks (ICC A) | Named Perils (ICC C, or ICC B as middle tier) |
|---|---|---|
| Coverage approach | Everything covered except listed exclusions | Only specifically listed perils covered |
| Breadth of protection | Broadest | Narrowest (ICC C) to moderate (ICC B) |
| Premium cost | Higher | Lower |
| Best suited for | High-value, fragile, or sensitive cargo | Lower-value, robust bulk commodities |
Which Should You Choose?
For high-value, fragile, or complex cargo, the broader protection of All Risks coverage is usually worth the additional premium, since a single uncovered loss could far exceed the cost difference in premiums over many shipments. For lower-value, robust bulk commodities where the cargo is unlikely to suffer damage from anything beyond the standard named perils, Named Perils coverage can be a reasonable, more economical choice.
It’s also worth checking what CIF sellers are providing by default, since CIF only requires the minimum Institute Cargo Clauses (C) level, buyers often need to arrange supplementary All Risks coverage themselves if they want broader protection.
Frequently Asked Questions
Does All Risks mean literally everything is covered?
No. All Risks still has standard exclusions, such as inherent vice, inadequate packaging, war, and willful misconduct, even though it’s broader than Named Perils. Always review the specific exclusions in your policy.
How much more does All Risks coverage cost compared to Named Perils?
The difference varies by insurer and cargo type, but All Risks typically carries a moderately higher premium, reflecting its broader coverage. For most valuable cargo, this difference is small relative to the protection gained.
What’s the middle tier between All Risks and Named Perils?
Institute Cargo Clauses B sits between the two, covering a broader list of named perils than Clauses C, but still not the “everything except exclusions” approach of All Risks (Clauses A).
Can I upgrade from Named Perils to All Risks after a shipment departs?
No, coverage needs to be arranged before risk transfers to be effective. Coverage terms can’t typically be changed retroactively once a shipment is already in transit.
Not sure which coverage level fits your cargo? Contact Paramount Express Agencies for guidance based on your shipment’s value and risk profile.
