Shipping Disruption and Your Cargo Is Stuck: What Your Insurance Covers and What It Does Not

Your container is on a vessel that was scheduled to transit the Suez Canal. The vessel has been rerouted around the Cape of Good Hope, adding 14 days to the voyage. Your buyer's production line needs the goods in two weeks. The delay will cost your buyer $200,000 in lost production. Your cargo is physically fine. Your insurance will not pay a cent for the delay.

That outcome surprises most shippers, but it is exactly how marine cargo insurance works. The policy covers physical loss of or damage to goods in transit. It does not cover the financial consequences of delay, even when the delay is caused by an insured peril. Understanding where the line falls between covered and uncovered losses is worth more than the premium itself when disruption hits.

Key Facts: Insurance and Shipping Disruption

Does marine cargo insurance cover delay? No. ICC (A), ICC (B), and ICC (C) all contain Clause 4.5, which excludes "loss damage or expense caused by delay, even though the delay be caused by a risk insured against" (IUA/LMA clause text, 2009 edition). This exclusion applies across all three clause sets.

What does the insurance cover during a rerouted voyage? The policy continues to cover physical loss of or damage to the goods during the extended transit. If cargo is damaged by heavy weather on the longer route, that damage claim is covered. What is not covered is the cost of the delay itself: lost production, lost sales, contractual penalties, or additional storage.

What are forwarding charges? Forwarding charges are the additional costs of forwarding cargo to its original destination after a voyage has been interrupted at an intermediate port. Under ICC (A) Clause 12, these charges may be recoverable up to the insured value of the cargo, subject to conditions.

What is general average in the context of shipping disruption? General average (GA) is a maritime principle under which all parties to a sea venture share proportionally in the cost of a sacrifice or expenditure made to preserve the venture. If a vessel in distress jettisons cargo or incurs extraordinary expenses, all cargo interests contribute. Marine cargo insurance typically covers the policyholder's GA contribution.

The Delay Exclusion: ICC (A) Clause 4.5

The delay exclusion is one of the most important and least understood provisions in marine cargo insurance. It applies regardless of which ICC clause set the policy uses.

The exclusion is absolute. It does not matter that the delay was caused by an insured peril. If a vessel diverts to avoid a war zone (an insured peril under war cover), the diversion itself may be covered, but the delay caused by the diversion is not. If a vessel is damaged by heavy weather (an insured peril under ICC (A)) and spends two weeks in a repair port, the cargo damage from the heavy weather is covered, but the cost of the two-week delay is not.

What the delay exclusion catches in practice:

The pattern is consistent: physical damage to goods is covered; financial loss from delay is not. Malaysian exporters shipping time-sensitive goods, particularly electronics and semiconductors or perishable food products, should plan for delay costs outside their marine cargo insurance programme.

What the Insurance Does Cover During Disruption

While delay losses fall outside coverage, several disruption-related costs are covered under a standard ICC (A) policy.

Physical damage during extended transit. If the rerouted voyage takes the vessel through rougher seas and the cargo suffers water damage, that damage is a covered peril under ICC (A). The policy does not stop covering the goods because the voyage changed; it continues to cover physical loss or damage for the duration of the transit, subject to the transit clause.

Forwarding charges (Clause 12). If a voyage is terminated at an intermediate port and the cargo needs to be forwarded to its original destination, the additional forwarding costs may be recoverable under Clause 12 of the Institute Cargo Clauses. The key conditions: the forwarding must be to the original insured destination, and the charges are recoverable only up to the insured value of the cargo. This is not a blank cheque for alternative logistics; it is a capped reimbursement for getting stuck cargo to where it was supposed to go.

General average contribution. If the carrier declares general average, all cargo interests on the vessel must contribute proportionally. GA declarations happen when the vessel master makes an extraordinary sacrifice or expenditure to preserve the common venture: jettisoning cargo, emergency towing, putting into a port of refuge. A standard marine cargo insurance policy covers the policyholder's GA contribution, which can be substantial. Without insurance, the cargo owner must post a cash deposit or bank guarantee before the carrier will release the goods.

Sue and labour costs. Under the duty of the assured (Clause 16), the policyholder has an obligation to take reasonable measures to minimise loss. Costs incurred in doing so, such as emergency repackaging, temporary cold storage for perishables, or protective measures against weather damage, may be recoverable as sue and labour costs in addition to the insured value.

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The Transit Clause: When Does Coverage End?

A disrupted voyage extends the transit period. The question is whether the insurance follows the goods for the entire extended transit or terminates at a fixed point.

Under ICC (A) Clause 8 (Transit Clause), coverage terminates at the earliest of: delivery to the consignee's warehouse at the named destination; delivery to any other warehouse the assured elects to use for storage or allocation; expiry of 60 days after completion of discharge from the overseas vessel at the final port of discharge; or delivery to any warehouse at the destination named in the contract of insurance. Our guide to when marine cargo coverage ends covers these termination triggers in detail.

For disrupted shipments, the 60-day provision is the relevant backstop. If cargo is discharged at an intermediate port and sits in storage for more than 60 days without being forwarded, coverage terminates. Cargo owners in this situation need to either forward the goods within the 60-day window or arrange additional storage cover.

The Termination of Transit Clause (Terrorism), which appears in the MOC policy wording as a separate provision, imposes similar time limits for terrorism-related cover: 60 days for marine transits, 30 days for air transits, measured from completion of discharge.

The Held-Covered Provision

Held-covered clauses appear in some policies and provide a safety net when the voyage changes from what was originally declared. If a vessel deviates from its planned route, changes its destination, or the voyage is otherwise altered in a way that was not contemplated when coverage was arranged, the held-covered provision allows the policyholder to remain covered, provided they give prompt notice to the insurer and agree to any additional premium and modified terms.

The held-covered provision is not automatic protection. It requires prompt notification. A shipper who discovers their vessel has been rerouted and waits three weeks to tell the insurer may find the held-covered provision does not apply. The word "prompt" in marine insurance means as soon as reasonably practicable, and delay in notification can prejudice the cover.

What the Carrier Owes (and Does Not Owe)

The carrier's liability for delay is limited under the conventions governing carriage of goods by sea. Under the Hague-Visby Rules, which govern most international sea carriage from Malaysian ports, the carrier has extensive defences including acts of God, perils of the sea, and the broad "nautical fault" exemption under Article IV(2)(a), which immunises the carrier from liability for errors in navigation or management of the ship.

Even where the carrier is liable for delay, the Hague-Visby liability limits cap recovery at 666.67 SDR per package or 2 SDR per kilogram, whichever is higher (Hague-Visby Rules, Article IV.5(a)). For high-value cargo, these limits cover a fraction of the actual loss.

The FMFF Standard Trading Conditions, applicable where a Malaysian freight forwarder acts as agent, further limit liability for delay under Clause 7.5: the forwarder's liability for delay-related loss is limited to the remuneration for the service giving rise to the delay.

The practical result: the carrier and forwarder's liability for delay is either excluded or capped at levels far below the shipper's actual loss. Marine cargo insurance excludes delay. The gap is real, and it falls on the shipper.

Practical Steps When Your Cargo Is Stuck

When a disruption hits and cargo is stranded or rerouted, the actions taken in the first 48 hours affect whether the recoverable costs are actually recovered.

Notify the insurer immediately. Prompt notice preserves held-covered rights and starts the claims process. Even if no physical damage has occurred, notification puts the insurer on notice that the transit has changed.

Preserve rights against the carrier. If goods are damaged during the disruption, clause the delivery receipt and request a survey. Under the MOC policy's Event of Loss provisions, the insured must claim immediately on carriers and other bailees for missing packages, never give clean receipts where goods are in doubtful condition, and apply immediately for survey if loss or damage is apparent.

Mitigate the loss. The duty of the assured under Clause 16 requires the policyholder to take reasonable steps to minimise loss. This includes arranging protective storage, preventing further damage, and forwarding goods promptly. Costs of mitigation are recoverable as sue and labour.

Do not sign any general average bond without insurer approval. The MOC policy wording specifically requires that the assured or their agents "are not to sign any Average Bond or to pay any deposit on account of General Average without first obtaining approval from the Company." Signing a GA bond without insurer consent can prejudice the claim.

Document everything. Photographs, correspondence with the carrier, port authority notifications, temperature logs for perishables, and a contemporaneous record of decisions made and why. Documentation turns a contested claim into a settled one.

Frequently Asked Questions

Does marine cargo insurance cover losses from shipping delays?

No. ICC (A), ICC (B), and ICC (C) all contain Clause 4.5, which excludes loss, damage, or expense caused by delay, even when the delay is caused by an insured peril. The policy covers physical damage to goods during transit but not the financial consequences of delay.

What are forwarding charges in marine cargo insurance?

Forwarding charges are the additional costs of forwarding cargo to its original destination after a voyage is interrupted at an intermediate port. Under ICC (A) Clause 12, these charges may be recoverable up to the insured value of the cargo, provided the forwarding is to the original insured destination.

What is general average and does my insurance cover it?

General average is a maritime principle where all parties to a sea venture share proportionally in the cost of an extraordinary sacrifice or expenditure made to preserve the venture. Standard marine cargo insurance covers the policyholder's GA contribution. Without insurance, the cargo owner must post a cash deposit or bank guarantee before the carrier will release the goods. Our guide to the York-Antwerp Rules 2016 covers the framework in detail.

Does my coverage continue if the vessel is rerouted?

Yes, subject to the held-covered provision. The policy continues to cover physical loss or damage during the extended transit. However, the policyholder should notify the insurer promptly of any change in the voyage.

Can I claim against the carrier for delay losses?

Carrier liability for delay is limited. Under the Hague-Visby Rules, the carrier has extensive defences. Even where liable, recovery is capped at 666.67 SDR per package or 2 SDR per kilogram, whichever is higher (Hague-Visby Rules, Article IV.5(a)).

What should I do if my cargo is stuck at a port due to disruption?

Notify your insurer immediately. Preserve rights against the carrier. Take reasonable steps to mitigate loss. Do not sign any general average bond without insurer approval. Document all communications and decisions.

Is delay insurance available as a separate product?

Delay-in-start-up (DSU) and advanced loss of profits (ALOP) insurance products exist for project cargo and large-scale shipments. These are specialist products underwritten separately from standard marine cargo insurance, subject to policy terms and conditions.

Speak to Voyage About Disruption-Resilient Cover

Voyage is a specialist marine insurance intermediary arranging marine cargo insurance for Malaysian exporters and importers. When shipping disruption is not a question of if but when, Voyage structures cover that responds to the risks your cargo actually faces: physical damage during extended transits, forwarding charges, general average, and the held-covered provisions that keep your policy alive when the voyage changes.

Get a tailored quote. WhatsApp Kevin at +60 19 990 2450 or request a callback. Quotes turn around in 24-48 hours where the underlying cover is in place.

Disclaimer: This article provides general guidance on marine cargo insurance and shipping disruption as of June 2026. Coverage terms, conditions, and availability vary by insurer, policy, and jurisdiction. Always review your specific policy wording and consult a qualified insurance professional before making coverage decisions.