Top Reasons Why Cargo Insurance Claims Get Rejected – And How to Avoid Them
- digital @btwimf.com
- Aug 22
- 2 min read
Table of Contents
Introduction
Why Do Cargo Claims Get Rejected?
Top Reasons for Cargo Claim Rejection
How to Avoid Cargo Claim Rejections
FAQs
Introduction
International shipping always carries risks – goods can be damaged, lost, or delayed. Cargo insurance is meant to protect you from such losses. But many businesses face disappointment when their claims are rejected due to small errors or missed steps. Knowing these pitfalls can save you time and money.
Why Do Cargo Claims Get Rejected?
Insurance companies need strong evidence before paying a claim. If there is delayed reporting, missing documents, or a policy mismatch, the claim may be turned down. Understanding the reasons helps you prepare better and avoid rejection.
Top Reasons for Cargo Claim Rejection
1. Late Claim Intimation
If you don’t report the damage or loss quickly (usually within 3–7 days), your claim may be denied.
Example: A container arrives damaged, but the exporter waits for weeks before informing the insurer.
2. Incomplete Documentation
Insurance claims require proof. Missing documents like the bill of lading, invoices, or survey reports can delay or cancel your claim.
3. Policy Exclusions
Every cargo policy has exclusions (things not covered). For example, normal wear and tear, inherent defects, or war risks may not be included in a standard policy.
4. Poor or Inadequate Packing
If goods are damaged because they were not packed properly, insurers often reject the claim.
Example: Fragile items shipped without cushioning.
5. Delay in Survey or Inspection
Insurance companies often need a surveyor to inspect the damaged cargo. If the goods are moved or altered before the survey, the claim may be denied.
6. Wrong Coverage or Policy Type
Sometimes, exporters buy the wrong type of policy that doesn’t cover the risk they face. For example, buying a “port-to-port” policy when goods are damaged during inland transport.
How to Avoid Cargo Claim Rejections
Report damages as soon as possible.
Maintain a complete document set (policy, invoice, bill of lading, photos).
Pack goods properly and keep evidence.
Know your policy terms and exclusions.
Cooperate with the insurer’s surveyor.
Take expert advice while buying marine insurance.
FAQ's
1. What is the most common reason cargo claims get rejected?
Delayed claim intimation and missing documents are the biggest reasons for rejection.
2. Can poor packaging lead to claim rejection?
Yes. If goods are damaged due to improper packing, insurers may deny the claim.
3. How quickly should I report cargo damage?
Ideally within 3–7 days of delivery, depending on policy terms.
4. Can I appeal a rejected cargo claim?
Yes. You can reapply with additional documents or approach an insurance ombudsman.
5. How can I make sure my claim is approved?
Keep documents ready, report damages fast, and ensure your policy matches your shipment type.
