Marine Insurance Claims Documentation

Why the paperwork matters

Marine claims documentation is the set of documents, evidence and steps needed to notify, assess and settle a claim under an inland transit or marine cargo policy. The papers do two jobs. They let the insurer assess the loss quickly, and they keep alive the insurer's right to recover from the carrier after it has paid.

The core set is the policy or certificate of insurance, the invoice and packing list, the transport document (a lorry receipt, railway receipt or bill of lading), the survey report and a written claim on the carrier. Where the loss involves theft, burglary, hijacking or another criminal act, a First Information Report is essential as official evidence that the crime was reported to the police.

What the insured has to do

Notify the insurer promptly and keep the damaged goods until they have been surveyed. If the goods are disposed of before the surveyor sees them, the insurer cannot verify the loss, and the claim may be reduced or rejected as a result.

The insured also has a duty to sue and labour, which means taking all reasonable steps to minimise the loss after an incident: salvaging undamaged goods, or covering exposed goods from rain, for example. Failure to mitigate can reduce the claim.

The third step is a written notice of claim on the carrier within the carrier's time limit. After paying, the insurer takes a letter of subrogation from the insured and uses it to recover from the party at fault, such as the transporter, shipping line or port. That recovery only works if the insured has kept the right alive by putting the carrier on notice in time.

Time limits and survey rules

For retail general insurance policies, IRDAI's 2024 Master Circulars require a surveyor to be allocated within 24 hours of the claim being reported, where the earlier rule was 72 hours. The survey report is due within 15 days of allocation, and the insurer must decide within 7 days of receiving it. Commercial and large-risk claims have their own timelines.

A licensed surveyor and loss assessor is mandatory for a loss above ₹1 lakh in general insurance classes other than motor. An insurer may ask only for documents necessary for settlement, and the circulars state that no claim shall be rejected for want of documents. If the insurer misses the prescribed time for settling, IRDAI's policyholder-protection rules require interest at 2% above the bank rate.

Weak and strong grounds for rejection

A short delay in intimation that caused the insurer no prejudice is a weak ground for rejecting a claim. In Gurshinder Singh v. Shriram General Insurance (24 January 2020), a motor theft case where the police had been informed promptly, the Supreme Court held that delay in telling the insurer could not by itself defeat a genuine claim.

Prompt notice still matters in marine insurance, because it protects the right of recovery against the carrier. Grounds that leave the loss itself harder to establish, such as goods disposed of before survey, are much stronger.

If the claim is disputed

The first step is a written complaint to the insurer's Grievance Redressal Officer; the insurer must resolve it within 14 days. Complaints can also be registered and tracked on IRDAI's Bima Bharosa portal, though IRDAI does not itself decide individual claims.

The Insurance Ombudsman is free and can award up to ₹50 lakh, raised from ₹30 lakh by an amendment effective 10 November 2023. It hears complaints from individuals, sole proprietorships and micro enterprises, so most commercial marine claims made by companies fall outside it. A consumer commission under the Consumer Protection Act, 2019 is the other route for those who qualify as consumers.

Rules at a glance

Key points

• The core documents are the policy or certificate, invoice and packing list, transport document, survey report and a written claim on the carrier.
• Damaged goods are kept until surveyed; disposing of them first can reduce or defeat the claim.
• The duty to sue and labour requires reasonable steps to minimise the loss.
• Written notice to the carrier within its time limit keeps the insurer's subrogation recovery alive.
• For retail policies: surveyor within 24 hours, report within 15 days, decision within 7 days of the report.
• The Insurance Ombudsman can award up to ₹50 lakh but does not hear claims by larger companies.

Common misunderstandings

• Clearing away damaged goods quickly is not helpful: until the surveyor has seen them the loss cannot be verified, and the claim may be reduced or rejected.
• A letter of subrogation does not by itself secure recovery: the carrier must also have been given written notice within its time limit.
• The 24-hour, 15-day and 7-day limits are for retail general insurance policies; commercial and large-risk claims have their own timelines.

Questions people ask