Exclusions in Cargo Transport Insurance: Clauses That Can Leave You Unprotected

Cargo transport insurance is an essential tool for protecting your products during their transit, whether by land, sea, or air. However, many policies contain ambiguous clauses that can leave you without coverage in the event of a claim. In this article, we explore the most common exclusions in transport insurance policies and how certain clauses, such as the IFFC (A) Institute Frozen Food Cargo (A), can put your goods at risk if not applied correctly.

What are Exclusions in Transport Insurance Policies?
Definition of Exclusions in Cargo Insurance

Exclusions are conditions that determine the situations or events that are not covered by the insurance. While insurance may cover the goods during transport, not all circumstances will be protected. For example, a policy might cover damage due to an accident but not necessarily due to a failure in the refrigeration equipment if it is not specified.

How Exclusions Affect Cargo Insurance
Exclusions limit coverage and are often not evident to owners or carriers. Many standardized policies include terms that can be restrictive, leaving businesses unprotected in situations that, at first glance, might seem covered. This is especially true when policies are not adapted to the specific characteristics of the type of goods or the means of transport.

The Most Common Clauses That Leave You Uncovered
The IFFC(A) Institute Frozen Food Cargo (A) Clause—a Hidden “Trap” for Land Transport

The IFFC(A) Institute Frozen Food Cargo (A) clauses, known for offering "all-risk" coverage in transport insurance, stipulate that damages due to poor temperature are only covered if the refrigeration equipment has been stopped for 24 consecutive hours. This requirement can result in insufficient coverage for land transport routes, where journeys are shorter and refrigeration equipment failures typically last less than 24 hours.

The IFFC (A) Clause is one of the most common clauses in insurance policies for frozen goods. It is a specific extension of the ICC (A) Clause originally designed for the maritime transport of frozen products. However, many carriers and freight forwarders make the mistake of applying it to land transport, without understanding its limitations.

Why is the IFFC(A) Institute Frozen Food Cargo (A) Clause not suitable for land carriers on short routes?
The IFFC(A) Institute Frozen Food Cargo (A) clauses require that the refrigeration equipment breakdown lasts 24 continuous hours for temperature damage to be covered. This detail is problematic for land carriers who make shorter journeys.

Imagine a carrier covering a national route from Galicia to Córdoba, transporting frozen fish. If the refrigeration equipment breaks down for four hours, it is very likely that the goods have suffered damage. In this case, despite having an FFC (A) Clause, the claim would not be covered, as the 24-hour requirement has not been met. This is one of the reasons why the IFCC (A) clause, designed for maritime situations, is not appropriate for land transport, especially national land transport.

Remember: the IFFC (A) Clause, specifically designed for the transport of frozen products, requires that the refrigeration equipment breakdown lasts 24 consecutive hours for the insurance to cover temperature damage. However, this limitation is inappropriate for land transport involving shorter journeys and equipment downtime much less than 24 hours.

Is the IFCC(A) Clause Beneficial for Insuring Your Frozen Cargo?
The Risks of Applying Standard Clauses Without Considering the Characteristics of the Transport

The IFFC(A) Clauses were formulated for the transport of frozen or perishable goods, but they are often incorrectly applied to land transport or short journeys that will not exceed the 24 hours required by the clause. This type of error can leave companies without coverage in case of damage due to temperature fluctuation during shorter periods.

What Should a Policy Adapted to Land Transport of Perishable Goods Look Like?
Land transport insurance for perishable goods must include clauses that adequately cover temperature damage without requiring 24 hours of refrigeration equipment breakdown. Instead of using clauses like the IFFC(A), it is advisable to seek coverages specifically adapted to land transport, especially national transport. At Assek Europe, we advise our clients and carefully study each case to find the best coverages.

Recommendations to Avoid Falling into the Exclusion Trap
Keys to Reading and Understanding the Fine Print of Your Policy

Carefully reading the policy conditions is crucial. Exclusions are often not prominently highlighted, which can lead to them being overlooked. Make sure you understand every clause, especially those related to specific risks such as temperature or stops in transit.

Consult with a Transport Insurance Specialist
To avoid problems with exclusions, it is advisable to work with an insurance specialist who can review the clauses and recommend the best options for your specific needs. A broker specializing in transport can ensure that your policy is the most suitable for your type of cargo and transport.

Personalized Solutions vs. Standard Policies
A personalized policy, specifically designed for your land transport needs, can be the best way to avoid exclusions. Assek Europe offers specialized insurance solutions that adapt to each type of client, providing complete coverage without restrictive clauses.

Impact of Exclusions on Risk Management
How Exclusions Affect Client Relationships

Claims not covered by exclusions can negatively affect client relationships. If the goods arrive damaged and are not covered by insurance, you could face disputes and a loss of client trust. Furthermore, you might have to bear the additional costs arising from the uncovered claim.

Economic Consequences of Not Having Adequate Coverage
Not having adequate coverage can lead to significant economic losses. Companies would be forced to bear the cost of uncovered damages, which would affect their profitability and their ability to meet delivery deadlines.

Protect Your Business by Choosing Your Policy Correctly
Importance of a Well-Designed Cargo Transport Policy

A well-designed policy is key to protecting your business against unexpected risks. It is essential to read and understand all policy conditions, especially the exclusions, to avoid surprises when problems arise.

Secure the Future of Your Business with the Support of a Transport Insurance Expert
Relying on a transport-specialized insurer, like Assek Europe, ensures that your goods are adequately protected. Don't risk your business; make sure you have the correct coverage for every type of transport and cargo.

Do you have questions about your transport insurance policy?
Consult our experts at Assek Europe and ensure your cargo is properly protected. Contact us today to review your coverage conditions and avoid future surprises.