Is There a Cargo Insurance Clause for EVs?

Not a bespoke one — not yet. Marine cargo insurance has no standard 'Institute EV Clause.' A new electric vehicle that catches fire in transit is generally covered as fire under the Institute Cargo Clauses, and cargo underwriters have not moved to exclude EVs — IUMI notes that no ro-ro or PCTC fire has yet been proven to start in a factory-new EV. Instead the risk is managed through existing levers: the preparation and inherent-vice exclusions, reasonable-precautions conditions, and accumulation limits.

What cargo insurance already does with an EV fire

It covers it, because fire is a core insured peril. A marine cargo policy on Institute Cargo Clauses (A) is an all-risks cover; even the narrower (B) and (C) forms name 'fire or explosion' as an insured peril. So a cargo owner whose electric vehicles are damaged by a fire in the hold — whether the fire started in their cargo or spread to it — is, on the face of it, insured for that loss under a standard cargo policy. That baseline matters, because it means the EV question in cargo insurance is not 'is fire covered' but 'when can the insurer decline to pay for this particular fire.' And the market's starting point is not exclusion: IUMI's own position is that while EV risks differ from combustion vehicles, research does not show them to be categorically more dangerous, and no factory-new EV has been proven to have caused a car-carrier fire. That is why a wholesale EV exclusion has not appeared.

Where the cover gets tested

At two standard exclusions that turn on the condition of the cargo, not the fact of the fire. The Institute Cargo Clauses exclude loss caused by insufficiency or unsuitability of preparation of the subject-matter (the 'preparation' exclusion), and loss caused by inherent vice or the nature of the goods (the 'inherent vice' exclusion). Both are where lithium argument concentrates. A flood-damaged or accident-repaired used EV, shipped without proper condition screening or disclosure, invites a preparation argument: the loss flowed from how the cargo was prepared, not from an external peril. A cell that self-ignites from a latent manufacturing defect invites an inherent-vice argument: the damage came from the nature of the goods themselves. The practical battle line is factory-new versus used-and-undisclosed — which is exactly the line the IMDG condition-assessment duty is also drawing.

The lever underwriters actually pull

Reasonable-precautions conditions and lithium-specific warranties, not new exclusions. Rather than carve EVs out of cover, insurers increasingly attach conditions requiring the assured to take reasonable precautions and to comply with recognised carriage rules and industry guidance. The drafting matters: legal analysis of lithium risk warns that a clause referring only to 'statutory requirements by any public authority' may be too narrow to capture the IMDG Code, IUMI best practice or EMSA guidance, and that under English law an insurer usually has to prove the assured acted recklessly — not merely negligently — to establish breach, unless the clause is drafted to bite on negligence. So the effective terms are the ones that name the actual standards: battery sourcing from reputable manufacturers, IMDG compliance, a stated state-of-charge discipline, and condition assessment for used units. Those conditions, not an 'EV exclusion,' are how cargo cover is being shaped around the risk.

Accumulation is why cargo underwriters care most

The single largest cargo exposure on a car carrier is not any one EV — it is all of them at once. A fully loaded PCTC concentrates thousands of vehicles on one hull, so a total loss lands on cargo underwriters as a single accumulation event: the Felicity Ace took nearly 4,000 vehicles (reported around $438 million across interests), and the Morning Midas, the ninth car-carrier total loss in a decade, took more than 3,000. Cargo interests also contribute in general average after a casualty, a cost their policy is expected to answer. That accumulation is what drives the market's response — tighter reasonable-precautions conditions, lithium warranties, and per-bottom sub-limits or rating — far more than the loss of any individual electric car.

What it means for cargo owners and underwriters

• Read the policy for the lithium terms, not an EV exclusion — the operative language is usually a reasonable-precautions condition and any warranty naming IMDG / IUMI / EMSA compliance, not a carve-out.
• Disclose used, flood-damaged or repaired EVs and screen their condition — the preparation and inherent-vice exclusions are where an undisclosed used unit's fire loss is most likely to be declined.
• For underwriters: a statutory-only precautions clause may miss the IMDG Code and industry guidance; name the standards you actually want the assured to meet, and set the negligence-versus-recklessness threshold deliberately.
• Price the accumulation, not the individual car — the total-loss scenario on a full hull is the cargo exposure that matters, and it is managed with sub-limits and conditions rather than exclusions.
• It parallels the carriage-contract gap: as with the absence of a standard BIMCO EV charter clause, there is no standard cargo EV clause either — both are being filled by bespoke terms that reward the party that can evidence chemistry, state of charge and condition.

Sources

• Institute Cargo Clauses (A)/(B)/(C) 2009: (A) is all-risks; (B) and (C) name 'fire or explosion' as an insured peril; standard exclusions include insufficiency/unsuitability of preparation of the subject-matter insured and inherent vice or nature of the subject-matter insured — Lloyd's Market Association / International Underwriting Association. [VERIFY: confirm the exact clause numbering (commonly cited as 4.3 preparation and 4.4 inherent vice) and wording against the ICC 2009 text before publish.]
• Clyde & Co — 'Going up in flames: lithium batteries and reasonable precautions clauses' (May 2024): a reasonable-precautions clause referring only to 'statutory requirements by any public authority' may be too narrow to capture industry rules or professional-body guidance; under English law insurers generally must prove recklessness, not mere negligence, to establish breach unless the clause is drafted to do so; recommends sourcing from reliable manufacturers and compliance with transport regulations and industry guidance (e.g. EMSA) — clydeco.com.
• IUMI — 'Risk mitigation for the safe ocean and short-sea carriage of electric vehicles' (best-practice paper update, September 2025): updated for gas-accumulation risk, total energy release and peak temperatures, PCTC design challenges, a 'Fixed First' approach and the limits of foam; states that to date no ro-ro/PCTC fire has been proven to have been caused by a factory-new EV and that EV risks, while different, are not shown by research to be categorically more dangerous — iumi.com.
• Felicity Ace (2022, ~4,000 vehicles, reported ~$438M across interests) and Morning Midas (2025, 3,000-plus vehicles, ninth car-carrier total loss in a decade): the cargo-accumulation total losses that drive cargo underwriters' response — AGCS / Lloyd's List / Splash247.
• Companion RoRoSAFE analysis — 'Is There a Charter Clause for EV Cargo?' (the carriage-contract counterpart to this cargo-insurance question), 'General Average and Cargo-Owner Exposure' (the GA contribution a cargo policy answers), and 'Are Marine Insurers Charging an EV Surcharge?' (the pricing side of the same market response).