What is All-Risk Coverage?
All-risk coverage is the broadest standard form of marine cargo insurance, insuring all risks of physical loss of or damage to the goods except those specifically excluded. In the London market it corresponds to the Institute Cargo Clauses (A), whose Clause 1 grants cover for all risks subject to the exclusions in Clauses 4 to 7. Those exclusions include wilful misconduct of the assured, ordinary leakage and wear and tear, insufficient packing, inherent vice, delay, certain insolvency situations, war and strikes. War and strikes risks can be bought back through the separate Institute War Clauses (Cargo) and Institute Strikes Clauses (Cargo). Narrower alternatives are the Institute Cargo Clauses (B) and (C), which cover only named perils such as fire, stranding, collision and jettison.
Why it matters for forwarders
Forwarders are asked to arrange cargo insurance far more often than shippers realise, because carrier liability is limited to a fraction of most cargo values: 26 SDR per kilogram by air and, under the Hague-Visby Rules, the higher of 666.67 SDR per package or 2 SDR per kilogram by sea. All-risk is not unconditional cover, and claims for poor packing, inherent vice or delay are routinely declined, so packing standards and photo evidence at stuffing matter as much as the policy wording. Under Incoterms 2020 CIP the seller must buy cover complying with Clauses (A) or similar, while under CIF the default remains the narrower Clauses (C), a distinction that letters of credit and sales contracts frequently get wrong. Cover is normally arranged for at least 110 percent of the contract value. The transit clause runs warehouse to warehouse but ends at the latest 60 days after discharge at the final port, so goods sitting in a port or bonded store beyond that need an extension.