In an increasingly connected business world, shipping—whether by sea, air, or land—is the backbone of the global supply chain. Every day, thousands of containers and cargo ships transport a wide variety of commodities, from raw materials and finished goods to high-value products, all around the world.
However, risks in the shipping process can never be completely avoided. Extreme weather, ship accidents, theft, human error, and even damage to goods during loading and unloading can occur at any time. This is where…Marine Cargo Insurance(Cargo Insurance) plays an important role in protecting goods owners from potential large financial losses.
Unfortunately, in practice, many property owners still assume that once they’ve purchased an insurance policy, their claims will automatically be paid. However, the reality isn’t that simple. Many claims are rejected due to administrative errors, lack of evidence, or misunderstandings of the policy terms.
This article will discuss in fullCommon mistakes that often cause Marine Cargo insurance claims to be rejected, complete with case examples, current trends, and practical tips to prevent your claim from suffering a similar fate.
L&G Insurance Broker, as a trusted insurance broker in Indonesia, has handled hundreds of Marine Cargo claims cases and is ready to help you avoid these fatal mistakes.
Contact L&G Insurance Broker now at 08118507773 for a free consultation before the risks haunt your business.
Marine Cargo Shipping and Insurance Trends in 2025
Entering 2025, the logistics and freight forwarding industry will undergo a major transformation. Indonesia’s international trade is growing rapidly, particularly in the manufacturing, energy, and agriculture sectors. A surge in exports to Asian and European markets is driving up maritime shipping volumes, while domestic inter-island shipping is also becoming more congested.
Some important trends:
- Increase in export and import volume→ especially CPO products, nickel, heavy equipment, and finished products.
- Increased use of container reefer for cold chain products such as food and pharmaceuticals.
- Digitalization of delivery tracking which allows real-time monitoring, but is still not evenly distributed across all operators.
- Increasing need for insurance protection due to supply chain complexity and higher risks.
As shipping volumes increase, so does the number of marine cargo insurance claims. Based on internal data from the brokerage industry, approximately 30–40% of claims are rejected or experience payment delays due to the negligence of the owner of the goods himself.
Common Mistakes That Cause Marine Cargo Claims to Be Rejected
- Incomplete or Late Documentation
This is a common mistake. Many property owners delay collecting claim documents, such as:
- Bill of Lading (B/L)
- Invoice and Packing List
- Survey Report / Damage Report
- Photo of the damage when it was first discovered
- Letter of Protest (Letter of Protest) to the carrier
In fact, insurance companies usually require claim notification maximum 3–7 days from the incident. If the deadline is exceeded, the claim may be immediately rejected.
- Late Reporting of Losses
Some companies wait until the goods arrive at the final warehouse to report damage, even though damage is already visible at the port. This delay makes it difficult to prove whether the damage occurred during transit or after the goods were received, giving insurance companies a strong basis for denying claims.
- The police are not suitable for the type of risk
For example, the goods are sent by traditional wooden ship (LCT) but the policy does not cover wooden vessel clauses. Or the shipment is made to a high-risk area but is not addedwar & strike coverThis discrepancy often occurs because the owner of the goods did not provide complete shipping details when purchasing the policy.
- Improper Packing
Insurance will not cover damage caused by packaging errors. For example, electronic products are packed in thin cardboard without protection, or liquid chemicals are not properly sealed and leak during transit. These are categorized as own fault, so the claim is automatically rejected.
- The condition of the goods was not checked during handover.
In many cases, the recipient of the goods does not inspect the goods and simply signs a “clean receipt” without noting the damage. As a result, it is difficult to prove that the damage occurred before the goods were received.
- No Surveyor or Surveyor Arrives Late
The presence of an independent surveyor is crucial for documenting the damage. If the property owner fails to promptly appoint a surveyor or relies on the carrier, the report may be deemed inaccurate.
- Do not keep damaged goods for inspection.
Many owners immediately repair or dispose of damaged items before conducting an inspection. However, these items are crucial evidence in the claims process.
- Inadequate Insurance Value (Underinsurance)
If the insured value is too small compared to the actual value of the goods, then when making a claim the principle will apply.average clause. This means that the claim is only partially paid.
Real Case Examples
Case 1: Claim Rejected Due to Late Reporting
A textile export company in Bandung shipped fabric to Türkiye. Upon arrival at the port of destination, seawater damage was discovered. However, a new report was filed two weeks later. The insurance company rejected the claim on the grounds that the report exceeded the 7-day time limit stated in the policy.
Case 2: Damage Due to Improper Packaging
An electronics company shipped hundreds of TVs in a container without adequate protective padding. During the journey, the container experienced severe shaking due to a storm. Dozens of units were damaged. The surveyor concluded the damage was due to substandard packaging, resulting in a denied claim.
Case 3: Underinsurance
The company insured the goods for Rp5 billion, even though the actual value was Rp10 billion. When damage amounted to Rp2 billion occurred, the company only received a claim payment amounting to Rp. 1 billion, because of the pro rata principle.
Tips to Ensure Your Marine Cargo Claim is Not Rejected
To avoid these costly mistakes, here are some practical tips you can apply:
- Understand the Policy Contents Thoroughly
Many property owners focus solely on the premium price, but the policy content determines the scope of coverage. Ensure the type of transportation, route, and additional risks are covered. When in doubt, use the services of a professional insurance broker, such as L&G Insurance Broker to ensure all risks are properly covered.
- Complete All Claim Documents
Prepare and save immediately:
- B/L, invoice, packing list
- Delivery note / goods receipt
- Photos of the damage when it was first discovered
- Surveyor’s report
- Letter of protest to the carrier
The more complete the documents, the faster the claim process.
- Report Claims as Soon as Possible
As soon as there’s any sign of damage, contact the insurance company and broker immediately. Don’t wait for the goods to arrive at the final warehouse.
- Use packaging that meets international standards.
Follow the standards such asInternational Maritime Organization (IMO) And ISPM 15 for wood finish. Use enough protection for fragile or high value items.
- Perform an Inspection Upon Receipt of the Goods
Never sign a “clean receipt” if there’s any indication of damage. Note and photograph the condition of the item upon delivery.
- Immediately Appoint an Independent Surveyor
Don’t delay appointing a surveyor. Their presence within the first 24 hours is crucial for claim validation.
- Keep Damaged Items as Evidence
Don’t immediately throw away or repair damaged items. Leave them in their original condition until the survey is complete.
- Ensure the insurance value is appropriate
Calculate the value of the goods correctly, including shipping costs and profit margin (if necessary). Avoid underinsurance, which can reduce claim payments.
Conclusion and Recommendations
The shipping process always carries risks, no matter how small the value. Whether it’s large-scale imports and exports or inter-island domestic distribution, the risk of damage, loss, and delays is always present. Marine Cargo Insurance acts as a financial shield that provides protection if unexpected things happen during the trip.
However, many cases in the field show that claims are rejected not because the risk is not covered, but rather due to administrative errors and a lack of understanding on the part of the goods owner. Incomplete documents, late reporting, substandard packaging, or policies that don’t match the shipping profile—all of these can be weak points that insurance companies exploit to deny claims.
Therefore, the success of a claim depends not only on how complete your policy coverage is, but also on preparation, accuracy, and compliance with claims procedures.
Practical Recommendations for Goods Owners and Exporters
- Use the services of a professional insurance broker to ensure your Marine Cargo policy covers all shipping risks, including special conditions such as high-risk routes, timber vessels, or shipments with reefer containers.
- Build internal reporting and documentation systems in the company, so that any damage or loss can be reported quickly and well documented.
- Train logistics teams and consignees to carry out a thorough inspection during handover and not to carelessly sign a clean receipt without checking the condition of the goods.
- Routinely evaluate the insurance value, especially if there are changes in commodity prices or shipping volumes, to avoid the risk of underinsurance.
- Keep all evidence of damage safe, including photos, surveyor reports, protest letters, and communication records, to strengthen your position during a claim.
By implementing these recommendations, you not only protect the goods you ship, but also keep your company’s cash flow healthy, avoiding major financial losses due to rejected claims.
👉 L&G Insurance Broker is your strategic partner throughout every step of the claim process. Our team is ready to help you create the right policy, provide technical guidance, and assist you from start to finish.
📞 Call us now at +628118507773 for further consultation regarding the best Marine Cargo protection for your business.
