Why your Marine Insurance Claim got Rejected?

The Marine Insurance policy can be taken by buyers, sellers, import/export merchants, contractors—or anyone engaged in the import and export of goods or transportation of it within the country. 

Cargo insurance is advantageous to the business organizations in which the goods are being transferred.

The contract of sales would decide who can purchase the policy.

Here are some of the most common contracts:
• FOB (Free on Board)
• C&F (Cost & Freight)
• CIF (Cost, Insurance & Freight)
In FOB and C&F contracts, the buyer is responsible for insurance. However, in CIF contracts, the seller is responsible for insurance.

Here are some common reasons why marine insurance claims get rejected:


1. Inadequate Insurance Cover Chosen
Just like any other insurance product, marine insurance has specific inclusions and exclusions. While the primary insurance features are included in all the policies, the insured needs to buy additional coverage depending on the nature of his business, the goods to be transported through ships, and similar other aspects.

If you file a claim of an amount beyond what your marine insurance policy covers, you won’t get the expected claim amount. So, it is vital that you select a plan with adequate coverage. Also, keep in mind to review your policy wordings that refer to its inclusions and exclusions. It will help you change the policy coverage as per the changing business needs.

2. Inappropriate Packaging of Goods
While marine insurance safeguards the goods to be transported, packaging them properly to avoid damage while on the route is essential. If they are not packaged in the right manner before being transported, there is a higher risk of damage during the journey. Improper packaging of goods is one reason that can lead to the rejection of marine insurance claims.

3. Transporting Goods That Cannot Sustain Long Journeys
With marine insurance, you can prevent the risk of financial losses that may happen in case of unexpected events during goods transportation. However, you cannot expect the insurer to pay you in case you transport perishable goods through cargoes. 

A transporter cannot ask for claims of damages to the goods that are perishable in nature. It would be best not to choose water transport mode if the goods are likely to get damaged by delays while en-route to their destination through ships.

One way to ensure your marine insurance claim won’t get rejected is to ask your insurance company about the specific list of goods covered under the policy. It will help you avoid any misunderstanding that may arise later about the inclusion clauses of the policy.

As detailed above, many instances come up where transporters and shipping corporations do not get the expected claims related to the marine insurance they have bought. 

Even small mistakes you make at the time of filing claims, purchasing a policy, and similar others can lead to claim rejection, thus ultimately leading to financial losses.

If your business involves getting goods transported through ships to distant lands regularly, it is crucial for you to choose the right marine insurance policy. 


In case you find it challenging to do this, you can ask for help from us.