Classification (Cargo) Clause

The Institute Classification Clause is a marine cargo insurance term that limits cover to goods carried on qualifying vessels. The clause, in its 1.1.2001 form, requires mechanically self-propelled steel ships classed by a society that is a member or associate of IACS and not over a stated age (typically 25 years, or 30 for bulk and combination carriers on regular liner trades). Cargo shipped on an over-age or unclassed vessel falls outside the held-cover terms unless the underwriter agrees an additional premium. The clause polices the carrying performance the cargo underwriter priced and shifts substandard-tonnage risk back to the assured.