Aggregation In Cargo and Logistics Insurance Claims: What Insurers Must Prove When Aggregating by Accident, Occurrence or Event

In our experience, aggregation clauses are among the most heavily contested provisions in cargo and logistics insurance. They govern whether multiple losses are treated as a single claim for the purposes of applying limits, deductibles, and sub-limits, often making the difference between meaningful recovery and severe underinsurance.

While insurers frequently assert aggregation where there is a run of thefts, shortages or logistics failures, English law does not permit aggregation by default. The outcome turns on policy wording, causation, and the factual coherence of the losses said to aggregate.

THE CENTRAL IMPORTANCE OF WORDING

Aggregation is not governed by a single legal test, but depends on the policy wording selected. English law distinguishes between:

• Event/occurrence wording, which is construed relatively narrowly; and
• Originating cause/source wording, which allows a much broader backward search in the causal chain.

Courts have repeatedly emphasised that an “event” is something that “happens at a particular time, in a particular place, and in a particular way” (see AXA Reinsurance (UK) plc v Field [1996] 1 WLR 1026 (HL)). By contrast, where a clause aggregates by reference to an “originating cause”, aggregation may extend to a continuing state of affairs or a common operational failure, as considered by Spire Healthcare Ltd v RSA [2022] EWCA Civ 17.

Cargo and logistics policies frequently sit closer to the former category, even when they use hybrid language that permits aggregating a series of accidents or occurrences.

ACCIDENT, OCCURRENCE AND EVENT: DISTINCT CONCEPTS

In logistics policies, theft or loss of cargo is typically treated as an “accident” or “occurrence”, that is, a discrete fortuitous incident, often involving deliberate human conduct.

Where a policy allows aggregation of:

“a series of accidents or occurrences arising out of one event in any one location”

the structure of the clause matters.

In our view, the accident or occurrence remains the primary operative unit. The insurer must first establish that multiple losses can properly be described as arising out of one event (”event” being used here in the same functional sense as an ‘occurrence’, namely a specific happening in time and place) before aggregation can follow.

This hierarchy is critical, and it prevents insurers from eliding multiple independent thefts or interceptions into a single claim by appealing to a high‑level narrative (e.g. “organised crime”, “systemic theft”, “criminal gangs” etc.) divorced from the actual incidents.

SERIES OF LOSSES

Secondly, on the above wording, insurers must prove that the multiple losses are a “series”; in other words that there is some connection between the thefts and they are not simply a number of unconnected happenings.

WHAT INSURERS MUST PROVE: THE LEGAL BURDEN

Where aggregation is relied upon in relation to the number of limits applicable, the burden lies squarely on insurers to prove that the losses aggregate. To aggregate multiple cargo losses by reference to accident, occurrence or event wording, insurers must demonstrate the following:

1. A Single Identifiable Event

Insurers must identify one event capable of unifying the losses. This cannot be merely a shared background risk or an industry‑wide problem. The courts have consistently rejected attempts to aggregate by reference to general conditions, vulnerabilities or ongoing criminality.

As the Supreme Court held in AIG Europe Ltd v Woodman [2017] UKSC 18, losses must be connected by more than similarity or coincidence; there must be a real inter‑connection such that they “fit together”, rather than being linked only through external background factors.

An assertion that multiple thefts were committed by an organised crime group is not sufficient unless the insurer can point to a specific operative event, for example, a single coordinated operation, decision or execution, rather than a series of similar opportunistic crimes.

2. Causation: Losses Must “Arise Out of” That Event

Even if an event is identified, insurers must show that each loss arose out of it. This incorporates orthodox principles of legal causation.

Courts have repeatedly warned against treating the causal language in aggregation clauses as infinitely elastic.

In logistics contexts, where thefts occur:

• days or weeks apart,
• at different depots or distribution centres,
• involving different carriers or routes,

it becomes increasingly difficult for insurers to demonstrate that each loss arose out of the same event rather than out of separate, self‑contained criminal acts.

3. Unity of Time, Place and Circumstances

Although not a rigid checklist, the “unities” analysis remains a powerful analytical tool where aggregation turns on event or occurrence wording.

Following Kuwait Airways Corp v Kuwait Insurance Co SAK [1996] 1 Lloyd’s Rep 664, courts typically examine:

• Unity of time – Were the losses contemporaneous or closely proximate?
• Unity of place – Did they occur at the same or related locations?
• Unity of cause – Were they caused by the same operative act or incident?
• Unity of intent – Where human action is involved, was there a single purpose or plan?

Where cargo losses are dispersed across time and geography, and where no single coordinated operation can be demonstrated, these unities are unlikely to be satisfied. Similarity of method, or repetition of thefts along a supply chain, is not enough.

4. “One Location” Means What It Says

Many logistics policies restrict aggregation to losses arising from “one event in one location”. This is a significant limiting factor.

Insurers must demonstrate not only a single event, but a single location in a meaningful sense. Attempts to characterise an entire logistics network, route corridor, or regional supply chain as “one location” have little support in English law. Policyholders are entitled to insist on a physical and geographical reality, assessed from the standpoint of a reasonable observer, not by reference to the insurer’s preferred level of abstraction.

COMMON INSURER ARGUMENTS AND THEIR WEAKNESSES

Insurers frequently argue that multiple cargo thefts form part of:

• a single criminal enterprise,
• a continuing modus operandi, or
• a sustained campaign against the insured.

These arguments may carry more weight under originating cause wording, but under event‑based formulations, they face real difficulty. As the courts made clear in Woodman, similarity is not connection, and a shared background explanation does not establish a unifying event.

Even where organised crime can be shown, that does not compel total aggregation.

English law permits partial aggregation or clustering where appropriate, recognising that separate events may exist within a broader narrative.

PRACTICAL IMPLICATIONS FOR POLICYHOLDERS

For policyholders facing aggregation assertions in cargo and logistics claims:

• Ensure that insurers identify the specific event relied upon.
• Test whether causation genuinely runs from that event to each loss.
• Scrutinise unity of time, place and circumstances.
• Resist attempts to substitute high‑level descriptions for factual proof.

Aggregation is not achieved by labelling losses as “systemic”. It must be earned by evidence.

Author

Toby Nabarro, Partner (Singapore)