Named Perils vs All-Risks Marine Insurance: Which One Protects Your Cargo Better?

Have you ever worried that your hard-earned cargo might be damaged or lost during ocean transport, only to find that your insurance coverage is limited and claims are denied? For many exporters and importers, choosing the right marine insurance isn’t simple—especially when deciding between Named Perils Insurance and All-Risks Insurance.

Named Perils Insurance only covers the specific risks listed in your policy, while All-Risks Insurance provides broader protection but comes at a higher cost. So which type of coverage is best suited for your cargo and shipping route? In this article, we’ll compare the two, exploring their coverage scopes, pros and cons, and practical scenarios, helping you make an informed choice to safeguard your cargo during global shipping.

Definition of Named Perils Policies

Named Perils Marine Insurance is a risk-specific policy that covers only predefined “marine perils” such as fire, collision, or capsizing. It’s derived from the Institute Cargo Clauses (ICC) B or C and is suitable for trades where risks are manageable. Unlike all-risk insurance, it doesn’t cover every eventuality—the insurer only pays for the risks listed.

Named Perils Marine Insurance Coverage

Vessel fire, explosion, or grounding.
Collision, sinking, or jettison.
Damage caused by seawater ingress.

For example, a cargo of iron ore exported from Kuantan would be insured if it were a total loss due to a collision; however, if it were only partially corroded (a non-listed peril), the peril would be out-of-pocket. Warehouse-to-warehouse coverage is standard, but extended coverage, such as theft, is available at an additional cost. On low-risk routes (such as Southeast Asia to Japan) in 2025, premiums for such policies would be as little as 0.1–0.5% of the cargo value, significantly lower than full-risk policies.

Definition of All-Risks Marine Insurance

All-Risks Marine Insurance is the trump card of ICC Clause A, offering comprehensive, “all-but-exempt” protection, covering virtually all external losses unless specifically excluded. It shifts the burden of proof to the insurer—all incidental damage is covered unless proven to fall within the excluded items. This makes it ideal for global trade, characterized by high uncertainty.

All-Risks Marine Insurance Coverage

All-risk policies protect against losses caused by “any accidental or sudden external cause,” including:

Theft, non-delivery, contamination, or loading and unloading damage.
Comprehensive risks such as severe weather, collision, or leakage.

For example, for semiconductor exports from Penang: if a container is stolen or damaged by saltwater in the Suez Canal, all-risk policies provide repair or full compensation (up to 110% of the value). Premiums are higher (0.5–1.5%), but they include full warehouse-to-warehouse protection. By 2025, with NOAA predicting a 15% increase in typhoons, the all-risk claim rate will reach 95%, significantly higher than for designated perils.

Do you know the top causes of cargo damage during ocean transportation? Check out “Top Causes of Cargo Damage during Ocean Transportation” to help you assess the need for comprehensive insurance.

Named Perils Policies VS All-Risks Marine Insurance

Aspect	Named Perils Insurance	All-Risks Insurance
Coverage Scope	Only specified 12-15 perils (e.g., fire, sinking)	Almost all external losses (except explicitly excluded)
Key Inclusions	Collision, explosion, grounding	Theft, pollution, handling damage, weather events
Exclusions	Non-listed risks (e.g., theft, partial damage)	War, delay, inherent vice
Premium Level	Low (0.1-0.5% of value)	High (0.5-1.5% of value)
Claim Success Rate	60-70% (risk must match)	90-95% (burden of proof on insurer)
2025 Applicability Trend	Low-risk bulk cargo (e.g., ore)	High-value fragile goods (e.g., electronics, pharmaceuticals)

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