Marine & Cargo Insurance in the UAE: ICC Clauses, Incoterms & War Risk (2026)

Quick answer: Marine insurance in the UAE covers:

Goods in transit (marine cargo): goods moved by sea, air or land;
Hull and machinery: damage to ships and boats;
Protection and indemnity (P&I): shipowners' liabilities to others.

For importers and exporters, the key question is who insures the goods. The Incoterm in the sales contract decides that. Under CIF the seller must buy at least Institute Cargo Clauses (C) cover. Under CIP the seller must buy the wider ICC (A) cover. Under FOB, FCA or CFR the buyer arranges its own insurance. In Dubai, yachts and jet skis must be insured before they can be licensed.

This guide explains cargo clauses, Incoterms, open covers, yacht and hull insurance, the 2026 war-risk situation in the Gulf, and how to compare quotes. Compare marine and cargo insurance on insuringU.

Marine insurance in the UAE: key facts

ICC (A): all risks, except named exclusions.
ICC (B) and ICC (C): named perils only. ICC (C) is the narrowest cover.
Insured value: usually at least 110% of the invoice value, to cover freight and costs.
Who insures, by Incoterm (2020):
- CIF: the seller buys at least ICC (C).
- CIP: the seller buys ICC (A).
- FOB, FCA or CFR: the buyer insures.
Policy types: single-shipment cover, or an open cover, an annual policy under which each shipment is declared.
Dubai yachts and jet skis: the Dubai Maritime Authority licence requires an insurance policy valid for 13 months (26 months for a two-year licence) from an insurer licensed in the emirate.
VAT: insurance of goods in international transport is generally zero-rated. Local cover carries 5% VAT.

Marine cargo insurance explained

Institute Cargo Clauses A, B and C

ICC (A): covers all risks of physical loss or damage, except the listed exclusions. It is the widest cover and suits most manufactured goods.
ICC (B): named perils such as fire, sinking, collision, earthquake, water entering the vessel or container, and loss overboard.
ICC (C): the narrowest cover. It is limited to major casualties such as fire, sinking, stranding, collision and jettison. It is often used for bulk commodities.

War and strikes are covered separately, under the Institute War Clauses and Strikes Clauses.

Incoterms: who insures the goods?

A UAE importer buying on FOB, FCA or CFR terms owns the transit risk from the point stated in the contract, so it needs its own cargo cover. A UAE exporter selling CIF or CIP must insure for the buyer, at the minimum clause the Incoterm requires. Even when the seller insures, many buyers add their own cover. That fills gaps between ICC (C) and ICC (A), and means claims are handled locally.

Open cover versus single shipment

Businesses that ship regularly usually take an open cover. It is an annual policy with agreed rates and limits per shipment, and shipments are declared monthly or quarterly. It avoids a gap if someone forgets to insure a shipment, and usually costs less per shipment than buying cover each time.

Inland transit

Goods moving by truck within the UAE or across the GCC can be covered under a goods-in-transit policy, or as an extension of the marine cargo policy.

Hull, machinery and P&I

Hull and machinery (H&M): physical loss of or damage to a vessel and its machinery.
Protection and indemnity (P&I): third-party liabilities such as crew injury, collision liability, pollution and wreck removal. It is usually provided by P&I clubs.
Yachts, boats and jet skis: pleasure-craft policies combine hull damage, theft and third-party liability. In Dubai, insurance is required for the licence.

War risk in the Gulf in 2026

Shipping through the Strait of Hormuz has been disrupted since early 2026. Several P&I clubs gave notice cancelling their Gulf war-risk extensions from 5 March 2026. Cover was then available on a buy-back basis. In July 2026, The National reported that war-risk premiums for Hormuz transits had risen sharply, with quoted rates of 3–10% of hull value, against about 0.25% before. Cargo has been rerouted through other ports and overland. For UAE importers and exporters, this means:

check whether war and strikes cover is included, and at what rate;
check how routing changes affect your cover and transit periods;
declare the voyage details accurately.

What affects the cost of marine cargo insurance?

The type of goods and how they are packed.
The route, ports and war-risk zones.
The mode of transport: sea, air or land.
The clause (A, B or C), the insured values and the excess.
Annual shipping volume, for open covers.
Your claims history.
For hull cover: the vessel's age, class and use.

Common exclusions

Insufficient or unsuitable packing.
Inherent vice: the natural deterioration of the goods themselves.
Ordinary leakage, loss of weight and wear and tear.
Delay, even if caused by an insured peril.
Wilful misconduct.
War and strikes, unless you add them.

How to claim

Note any visible damage or shortage on the delivery receipt, and keep the damaged goods and packing.
Notify the insurer or its surveyor straight away so the goods can be inspected.
Hold the carrier responsible in writing within the time limit.
Send the policy or certificate, the invoice, packing list, bill of lading or airway bill, the survey report and correspondence with the carrier.

How to compare marine insurance quotes

Check your Incoterms to confirm who must insure, and from what point.
Choose the clause that fits the goods. ICC (A) is usual for manufactured goods.
Check the insured value. 110% of the invoice value is the usual basis.
Check war and strikes cover, inland transit and storage extensions.
For regular shipments, compare open-cover rates and the per-shipment limits.

Get marine and cargo insurance quotes on insuringU.

Frequently asked questions

Who pays for marine insurance under CIF and FOB?

Under CIF, the seller buys at least ICC (C) cover for the buyer's benefit. Under FOB, the buyer arranges and pays for its own insurance.

What is the difference between ICC A, B and C?

ICC (A) covers all risks except listed exclusions. ICC (B) and ICC (C) cover only named perils. ICC (C) is the most limited.

Is marine cargo insurance mandatory in the UAE?

No UAE law requires it for general cargo. It is often required by sales contracts (CIF or CIP), by letters of credit and by lenders.

Is yacht or jet ski insurance mandatory in Dubai?

Yes. To license a vessel with the Dubai Maritime Authority, including a pleasure craft or jet ski, you need a valid insurance policy from an insurer licensed in the emirate.

What is an open cover marine policy?

It is an annual cargo policy that automatically covers every shipment within agreed limits. Shipments are declared periodically, and premium is paid on the declared values.

Does cargo insurance cover war risk in the Gulf?

Only if war and strikes cover is included. Since the 2026 disruption around the Strait of Hormuz, war-risk terms and rates for Gulf voyages have changed, so confirm what is included for each route.

Why insure at 110% of the invoice value?

The extra 10% is the usual allowance for freight, insurance and other costs. The 2020 Incoterms rules set it as the minimum under CIF and CIP.

Related guides

Sources

Last reviewed: 29 September 2026. This guide is general information, not advice on a specific policy. War-risk terms for Gulf voyages are changing quickly, so confirm cover for each shipment. insuringU is a brand of Affinity International Insurance Prices Comparison L.L.C., Dubai trade licence 1352749, licensed by the Central Bank of the UAE as an insurance price comparison website.