Marine Claims

Marine Insurance Claim Process

Transit of goods from one place to the other involves risk of Road Accidents, salvaging operation when the Ship is in distress, Loss of container whilst being unloaded, Theft/Pilferage/Non delivery, carriers not following instructions as mentioned in the bill of lading, destruction of aircraft/non delivery by the carrier.

What to do?

Road Accidents:

  • Take Spot Photographs
  • Obtain First Information Report from Police Authorities
  • Inform Insurance Company
  • Lodge claim on the Carriers
  • Submit claim form and claim bill to Insurance Company

Transit by Rail:

  • Take spot photos
  • Inform Insurance company
  • Lodge claim on railways
  • Submit claim form and claim bill to Insurance company

Ocean/Sea Voyages:

  • Arrange for survey by carriers or their representatives
  • Intimate Insurance company
  • Contact Insurance company to do joint survey
  • Submit claim form and claim bill to Insurance company.
  • Do not give clear receipt on the delivery order.
  • Lodge a claim on the carriers.

Scope of Cover and Documents required for Claims

  • Marine Insurance takes care of goods transported from one place to the other by Road/Rail/Sea. To make a mention general Insurance started from Marine Insurance.
  • Marine Insurance policies are issued according to the mode of transportation.
  • Marine Insurance claims are pretty complex and requires the assistance of an expert.

Documents Required For Claims

  • Fire/explosion: Report from the fire brigade at the spot of occurrence and FIR from local police personnel.
  • Overturning/derailment/breakage of bridges: FIR from local police station, FIR from Railway policy if by Rail.
  • Collision/Contact with external Objects: FIR from local police station
  • Earthquake/Volcanic eruption/Lightning: Meteorological report.
  • Breakage/Scratching/Theft Etc.: The claim has to be lodged by the proposer and has to prove the loss physically in the presence of the surveyor appointed by the Insurance company.
  • Riot/Strike Etc.: FIR from local police station.
  • In all the above cases Invoice copy, Lorry receipt, Railway receipt, Stock statement at the warehouse of the proposer should be duly produced. Any other documents required by the Insurance company. Also a copy of the claim made on the carrier along with the acknowledgement copy of the registered letter sent. Letter of subrogation.

Risks Covered in Ocean/Sea Voyages

  • Fire or Explosion
  • Standing, Grounding, Sinking or Capsizing
  • Overturning or Derailment
  • Collision or contact of vessel craft or conveyance with any external objects other than water.
  • Discharge of cargo at point of distress.
  • General average
  • Jettison
  • Earthquake, volcanic eruption or lightning
  • Water damage by entry of sea/river water (excluding rainwater)
  • Total loss of package lost overboard
  • Total loss of package dropped during loading and unloading.
  • Breakage, Scratching, Chipping, Denting & Bruising, Theft, Malicious Damage, Non Delivery, All water damage including rain damage.
  • Riot, Strike, Local Disturbances, Locked out Workmen, Terrorists and Persons acting from a political motive.

Documents Required for Claims

Claims under marine policies have to be supported by certain documents which vary according to the type of loss as also the circumstances of the claim and the mode of carriage.

The documents required for any claim are as under:
  • Intimation to the Insurance company: As soon as the loss is discovered then it is the duty of the policyholder to inform the insurance company to enable it to assess the loss.
  • Policy: The original policy or certificate of insurance is to be submitted to the company. This document establishes the claimant’s title and also serves as an evidence of the subject matter being actually insured.
  • Bill of Lading: Bill of Lading is a document which serves as evidence that the goods were actually shipped. It also gives the particulars of cargo.
  • Invoice :An invoice evidences the terms of sale. It also contains complete description of the goods, prices, etc. The invoice enables the insurers to see that the insured value of the cargo is not unreasonably in excess of its cost, and that there is no gross overvaluation. The original invoice (or a copy thereof) is required in support of claim.
  • Packing List: which shows the list of Items and condition of packing.
  • Survey Report:Survey report shows the cause and extentof loss, and is absolutely necessary for the settlement of claim. The findings of the surveyors relate to the nature and extent of loss or damage, particulars of the sound values and damaged values, etc. It is normally issued with the remarks "without prejudice" i.e. without prejudice to the question of liability under the policy.
  • Debit Note:The claimant is expected to send a debit note showing the amount claimed by him in respect of the loss or damage. This is sometimes referred to as a claim bill.
  • Copy of Protest:If the loss or damage to cargo has been (issued by insurers) which transfers the rights of the claimant against a third party to the insurers. On payment of claim, the insurers may wish to pursue recovery from a carrier or other third party who, in their opinion, is responsible for the loss. The authority to do so is derived from this document. It is required to be duly stamped. Some of the other documents required in support of particular average claims are Ship survey report lost overboard certificate if cargo is lost during loading and unloading operation, short landing certificate etc.
  • Bill of entry:The other important document is bill of entry issued by the customs authorities showing therein the amount of duty paid, the date of arrival of the steamer, etc., account sales showing the proceeds of the sale of the goods if they have been disposed of; repairs or replacements bills in case of damages or breakage; and copies of correspondence exchanged between the carriers and the claimants for compensation in case of liability resting on the carriers.
  • Debit Note:The claimant is expected to send a debit note showing the amount claimed by him in respect of the loss or damage. This is sometimes referred to as a claim bill.
  • Dock Receipt:To Show the condition of the Cargo whilst Loading and Unloading.

What to Do in the Event of a Claim

Any shipment that arrives damaged or incomplete requires IMMEDIATE ACTION Upon Receiving Cargo:
  • Examine all packages for external damage. Note signs of damage and shortage on the bill of lading and/ordelivery receipt before you accept delivery
  • Count the number of packages. Note shortages on the bill of lading and/or the delivery receipt
  • If the shipment contains fragile items, open the packages to check for breakage - even if there is no external damage. If there is "concealed damage", contact the carrier immediately.

If there is damage or loss

  • Take photographs - if possible - of damaged packages and goods.
  • Do not discard damaged packing materials or contents.
  • Make every effort to minimize the loss, or prevent further loss, as stipulated under the insurance contract. Reasonable expenses incurred in minimizing loss are reimbursable
  • Immediately put all carriers on notice in writing, holding them responsible for the loss or damage. Include the bill of lading and/or waybill and/or delivery note number, as well as the name of the transporting vessel or other mode of transport. A description of the loss should also be included, and the carrier(s) should be informed that a final claim will be filed when the full extent of damage has been confirmed .
  • When delivery is made by container, if the container is delivered damaged or with seal broken or missing, or seal number other than that stated in the shipping documents, retain all defective or irregular seals for subsequent identification. Make sure that the tallyman who goes along with the container note, the damage or discrepancy on his tally sheet and get a copy of damage/exception sheet from the tally company.
  • Obtain damaged cargo certificate or short landed memo or exception list issued by the carriers/forwarders, or make notations of the damage/loss on the bill of lading or carriers delivery receipt.
  • DO NOT give a clean receipt to the delivering carrier/forwarder unless you can immediately inspect the cargo and you have found it undamaged. When there is any doubt, you should mark any documentation with "Received in Apparent Good Order and Condition".
  • As soon as you are aware of a potential loss/claim, immediately notify the carrier/forwarder and/or the responsible parties involved in writing of the damaged or missing cargo and of your intent to hold them responsible within the time limit set out in your contract of carriage.
  • In case of theft, pilferage, robbery, malicious damage or traffic accident, please refer to the local authority and obtain the relevant Police or Traffic Accident Report. Also weighment slip at the point of loading and weighment slip at the point of unloading should be produced.
  • Take such reasonable action to prevent further loss.
  • Notice of Claim for Transportation by Inland vessels or Road Carriers(booking and destination offices) within 6 months from the date of booking in terms of Sec10 of the Carriers Act 1865.
  • Notice of Claim for Transportation by Air, the concerned Air carriers within 7 days from the date of delivery of goods at the destination or in non delivery within 14 days from the date of booking in terms of Rule26(2) Chapter III of the Indian Carriage of Air Act. Rule 26 is appended herebelow:
  • “26. (1) Receipt by the person entitled to delivery of luggage or goods without complaint is prima facie evidence that the same have 93 been delivered in good condition and in accordance with the document of carriage. (2) In the case of damage, the person entitled to delivery must complain to the carrier forthwith after the discovery of the damage, and, at the latest, within three days from the date of receipt in the case of luggage and seven days from the date of receipt in the case of goods. In the case of delivery the complaint must be made at the latest within fourteen days from the date on which the luggage or goods have been placed at his disposal. (3) Every complaint must be made in writing upon the document of carriage or by separate notice in writing dispatched within the times aforesaid. (4) Failing complaint within the times aforesaid, no action shall lie against the carrier, save in the case of fraud on his part.”

In the event of Claims being repudiated by the Insurance Company the following options are available as a recourse:

  • Make a representation to the Insurance Company/TPA.
  • If no reply is received within 15 days on making such representation make a representation to the Grievance Cell of the Insurance Company.
  • If No Reply is received or if the reply is not satisfactory then make a representation to the Insurance Ombudsman who has Quasi Judicial powers to hear the case and make adjudication.
  • If still not satisfied the next option is to go to court.