Institute Strikes Clauses (Cargo) - Explained

Institute Strikes Clauses (Cargo) - Explained

The Institute Strikes Clauses (Cargo), designated CL386 and effective from 1 January 2009, cover loss or damage to cargo caused by strikers, locked-out workmen, persons taking part in labour disturbances, riots, civil commotions, or acts of terrorism or any person acting from a political motive. Like the Institute War Clauses, they are purchased separately from your standard marine cargo policy because all three Institute Cargo Clauses (A, B, and C) explicitly exclude these risks.

For exporters routing cargo through ports prone to industrial action, civil unrest, or security incidents - and for anyone shipping to destinations with elevated terrorism risk - the Strikes Clauses close a gap that standard cargo policies leave wide open.

What the Strikes Clauses Cover

• Strikers, locked-out workmen, or persons taking part in labour disturbances, riots, or civil commotions
• Any terrorist or any person acting from a political, ideological, or religious motive
• General average and salvage charges incurred to avoid a loss from a covered peril

What the Strikes Clauses Exclude

• Loss caused by absence, shortage, or withholding of labour (production delays, not physical loss)
• Loss caused by terrorism or political motive during on-land storage (critical exclusion)
• Nuclear, chemical, biological, biochemical, electromagnetic weapons, or cyber attack
• Ordinary leakage, wear and tear, inherent vice, delay, insufficient packing
• War, civil war, revolution (covered under War Clauses, not Strikes Clauses)

The On-Land Storage Terrorism Exclusion

The most important exclusion in CL386 is the on-land storage exclusion for terrorism and politically-motivated acts. If your cargo is damaged by a terrorist incident at a warehouse, inland depot, or during any on-land storage period, the Strikes Clauses will not respond. The cover for terrorism applies only while the cargo is in transit.

Common Scenarios

• Port workers strike and cargo on the dock is damaged
• Container damaged during a riot at an inland depot while in transit
• Cargo destroyed in an attack by politically-motivated actors during road haulage
• Civil commotion at a port causes cargo to be trampled, burned, or looted

FAQ

Does my cargo insurance cover strikes? Only if your policy includes CL386. Standard ICC clauses exclude strikes, riots, civil commotion, and terrorism.

Is terrorism covered? Yes, under CL386 while the cargo is in transit. Excluded during on-land storage.

Do I need both War and Strikes Clauses? In almost all cases, yes. The legal line between "war" and "terrorism" is not always clear.

Official Source

Published by the LMA and IUA. Current edition: 1 January 2009.