Reasons Behind Marine Cargo Insurance Claim Rejection

Marine cargo insurance is a critical aspect of international trade, protecting goods shipped via sea. It protects shippers and carriers against potential financial losses caused by unforeseen events that may occur during shipment. However, insurance claims are not always straightforward. There are several reasons why a claim may be rejected.

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Reasons behind Marine Cargo Claim Rejection

  1. Non-disclosure of Material Information

    One of the most common reasons behind marine cargo claim rejection claims is the non-disclosure of material information by the insured. Material information is any information that could affect the decision of the insurer to provide coverage or the terms of the policy. Examples of material information include the nature of the cargo, its value, the mode of transportation, and the intended route.

    If the insured fails to disclose any material information, the insurer may reject the claim, even if the loss or damage occurred due to an insured event. Therefore, shippers and carriers need to disclose all material information accurately and honestly while applying for marine cargo policy.

  2. Insufficient Packaging

    The most common reasons behind marine cargo claim rejection are insufficient packaging. If the cargo is not packaged properly, it can become damaged during transportation. The insurer may reject the claim if the damage occurred due to insufficient packaging or inadequate protection. The insurer expects the shipper to package the cargo appropriately to ensure its safe transport.

  3. Delayed Reporting

    Prompt reporting of losses is common reasons behind marine cargo claim rejection. If the insured fails to report the loss or damage on time, the insurer may reject the claim. Delayed reporting can raise suspicion of fraud. This can make it challenging for the insurer to investigate the loss or damage. Therefore, it is essential to report any loss or damage as soon as possible to the insurer and provide all necessary documentation to support the claim.

  4. Failure to Mitigate Loss

    One of the crucial reasons behind marine cargo claim rejection is the failure to mitigate loss. The insured must mitigate the loss or damage to the cargo. If the insured fails to take reasonable steps to mitigate the loss, the insurer may reject the claim. For example, if the cargo is damaged due to exposure to water, the insured should take steps to prevent further damage. This includes moving the cargo to a dry location.

  5. Exclusions in the Policy

    Marine cargo policies typically contain exclusions that limit the coverage provided by the policy. If the loss or damage falls within the exclusion in the policy, the insurer may reject the claim. For example, if the cargo is damaged due to an act of war, the insurer may exclude coverage for the loss.

  6. Failure to Comply with Policy Conditions

    Marine cargo policies often contain specific conditions that must be met for the coverage to be provided. If the insured fails to comply with any of these conditions, the insurer may reject the claim. For example, the policy may require the insured to inspect the cargo upon arrival at the destination and report any damage immediately.

  7. Fraudulent Claims

    Fraudulent claims are a significant concern for marine cargo insurers. If the insurer suspects that the insured has made a fraudulent claim, they may reject the claim and take legal action against the insured. Fraudulent claims can include the intentional destruction or loss of cargo to obtain compensation from the insurer.


Marine cargo policy provides essential protection to shippers and carriers against potential financial losses due to unforeseen events during shipment. However, not all claims are accepted by insurers. The reasons behind marine cargo claim rejection can include non-disclosure of material information, insufficient packaging, and delayed reporting. Further, failure to mitigate loss, exclusions in the policy, failure to comply with policy conditions and fraudulent claims are also included.

Written By: PolicyBazaar - Updated: 16 August 2023
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3.8 April 20, 2023
Great Experience
I recently purchased Marine insurance from Policybazaar for my shipping business and I must say I am thoroughly impressed with their service and coverage. From start to finish, the experience has been smooth and hassle-free.Thankyou.
4.3 April 03, 2023
Provides Comprehensive Protection
When it comes to coverage, Marine insurance that i bought from PolicyBazaar has exceeded my expectations. It provides comprehensive protection for my cargo and vessels during transit, ensuring I can focus on my business operations with peace of mind. Thankyou.
4.3 March 17, 2023
Excellent Services
I highly recommend Marine insurance from PolicyBazaar website to anyone in the shipping or logistics industry. Their user-friendly website, comprehensive coverage, and excellent customer service make them stand out from the competition. With Policybazaar, I feel confident in navigating the high seas, knowing that my business is well-protected. Thank you, Policybazaar.
4.3 February 28, 2023
User Friendly Interface
The website's user-friendly interface made it easy to compare different plans and find the perfect fit for my business needs.Thanks
4.3 February 11, 2023
Prompt Services
I appreciate the transparency and honesty with which Policybazaar handled my claims. They were prompt in processing my claim and their claim settlement process was hassle-free.Thanks PolicyBazaar.
3.8 February 10, 2023
Exceeds Expectations
I recently had the pleasure of purchsing marine insurance from Policy bazaar website and I must say it has been an outstnding experience from start to finish. I am thrilled to share my positive customer review, as this truly exceeded my expectations. Thanks PB.
3.8 January 31, 2023
Easy Navigation
The ease of navigating the Policy bazaar website and finding the right marine insurance policy was impressive. The website's user-friendly interface and intuitive design made it incredibly simple to compare various options, understand the coverage details and make an informed decision. I appreciated the transparency provided throughout the process. Thanks.
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The customer service provided by Policy bazaar was decent. Their team was responsive, knowledgeable and went above and beyond to assist me at every step. Their professionalism and commitment to customer satisfaction were truly commendable.Thankyou.
4.3 January 11, 2023
Sanjeev Rathor
Efficient Process
When it came to claims processing, Policy bazaar demonstrated remarkable eficiency and effectivenes. I had an unfortunate incident during the coverage period and filing a claim was a breeze. The entire process was streamlined and their team guided me throuugh every necssary step, making it hassle-free. The promptness with which my claim was setled reflected their commitment to their customers' well-being and peace of mind. Thankyou.
3.8 January 01, 2023
Comprehensive Coverage
I must mention the comprehensive coverage provided by the marine insurance policy I purchasd through Policy bazaar. It offered me the necesary protection and peace of mind. Thankyou PolicyBazaar.