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How to successfully file Marine Cargo Insurance claim
Marine Cargo claim procedure
When the exporter / importer suffers loss of cargo, his foremost thought is to recover the loss as fast as possible. However it is often seen that adequate steps are not taken at the appropriate time by them in their haste to claim which could have a negative effect on their claim prospects.
The most commonly committed mistake is to assume is that since there is an Insurance Policy that covers loss / damage to cargo the Insurance company has to pay the claim. However the first and foremost condition that exists in the Policy is that the insured will have to act as prudent uninsured.
Why should I act like an uninsured , I hear the question. I am insured am I not? Yes but as insured you are supposed to do everything that you would normally do if you were not insured.This is required so that the insured takes proper steps to mitigate the loss and protects the Insurance company's rights of recovery against the carriers / third party who is responsible for the loss/ damage.
You have to immediately notify in writing the carrier / other party who was responsible for the loss/ damage , preferably take a "Received" copy of the notification. You should also Invite them for joint survey with the Insurance surveyor and formally lodge a claim on them specifying the loss amount after the survey. In case the loss/ damage is during road transit then the consignment note should be claused -i.e. damages mentioned and signed by receiver of goods.
The original Insurance Policy, Invoice, Packing List, Bill of Lading , Bill of Entry, Consignment Note and notice of claim are the standard documents required by the Insurance company.
In case photography is not possible due to survey being carried out at Port area, please ensure that clear photographs documenting the loss/ damage are available.
It is also the duty of the insured to minimize the loss/ damage as far as possible so in case there are leakages / spillages from drums / bags, steps to be taken to avoid further loss viz. by stopping the leakages using adhesive material , plugging the hole, re-bagging etc.
Normally Insurance companies will pay you for efforts made / extra expenses incurred to minimize the loss so it makes sense to go the extra mile for this. If spillage / leakage continues unabated many times Insurers will reduce the claim due to no effort made for loss-minimization.
The claim calculation is also very important and often entails a lot of unnecessary correspondence. It is good to remember that Insurance company is only liable for what they insured. So if you have not insured Customs Duty and insist on claiming for duty the claim may drag on. Also often the claim amount includes loss of market / delay etc which are not under the purview of the Marine Cargo Policy.
Therefore it is necessary to check the Insurance Policy right on inception and see whether you have actually received the cover that you have asked for. There have been instances where the Policy has been issued subject to Institute Cargo Clause C which is the most restricted cover applicable and the importer thinks that the cargo is fully insured. It is only when the consignment suffers loss that the merchant realizes the problem with the Insurance Policy.
Therefore it is important to remember that the secret to a successful claim procedure lies in being aware of the Policy terms and conditions right from the inception of the Policy. Often the Insurers will agree to include special terms and conditions on payment of some extra premium which might ultimately be very cost effective in the long run.
It has also to be kept in mind that any deviation from the route should be intimated to the Insurance company and their written confirmation to cover the deviated route should be taken. If there is deviation which you are aware of but have not notified to Insurance company this can lead to total rejection of claim depending on circumstances.
Keeping in mind these simple guidelines will go a long way in simplifying your claim procedure and reduce hassles. It is necessary to remember that the Insurance company has to work within the guidelines of the policy and they also have to face audit for the claims settled by them.
Globally all Insurance companies are looking out to enhance the claim experience for their customers. It has also become mandatory for them to set goals for fast settlement of claims. Therefore unless there are any serious problems with the claim in question proper following of procedure will ensure that your claims are settled fast.
- What to do in cases of General Average
Often when you get a notice of General Average you do not know what it is about or what to do. A small write up to explain the procedure.