Marine Cargo Insurance Claims: Documents, Surveys and Time Bars

The container came off the vessel, the trucker's interchange receipt was signed clean at the terminal gate, and two days later the receiving team found 180 wet cartons of small appliances behind the first row of pallets. Finance hears about it at month-end, when a write-off request reaches the controller. By then the three-day window for written notice to the carrier has closed, the cartons have been restacked, and nobody has asked the insurer to appoint a surveyor.

A marine cargo claim is won or lost on a few dated actions in the first week and on one hard date a year later. When notice, survey and the claim file run against a calendar with named owners, the underwriter settles the policy claim, the recovery against the carrier stays alive, and the receivable can be booked on a basis an auditor will accept.

• What this guide covers: notice rules under the US Carriage of Goods by Sea Act and India's Carriage of Goods by Sea Act, 2025, survey practice, the documents an underwriter settles against, suit deadlines, subrogation and the ledger entries.
• What it adds: a worked claim in USD and INR, a claim-amount formula, a dated failure trace and a register checklist that finance and logistics can run together.

Two claims start the moment damaged cargo reaches your dock

Every insured cargo loss opens two tracks at once: a policy claim against your own insurer and a liability claim against the carrier or bailee that had custody. The first pays you; the second repays the insurer. Both depend on steps taken before the policy claim is even filed.

The policy claim is a contract claim under the cargo policy or the certificate issued under it. The insurer pays if the loss arises from an insured peril during the insured transit, less the deductible. The carrier claim rests on the bill of lading and the carriage law behind it, with notice rules, a package limit and a short suit period that run whether or not your insurer has paid.

Our freight claim evidence workflow explains how to assemble custody and condition facts for a carrier claim in general. This article stays with the insured route: what the underwriter and its surveyor need, which dates are fixed by statute, how subrogation passes the carrier claim to the insurer, and how finance records the loss and the expected recovery. More logistics finance topics sit on the logistics and supply chain hub.

Written notice to the carrier: three days, removal and silence

Give written notice of loss or damage to the carrier or its agent at the port of discharge before or at removal of the goods if the damage is apparent, and within three days of delivery if it is not. Missing the window does not destroy the claim, but it hands the carrier a presumption that it delivered what the bill of lading describes.

In the United States the rule sits in section 3(6) of the Carriage of Goods by Sea Act, reproduced as a note to 46 U.S.C. 30701. Without timely notice, removal is prima facie evidence of delivery as described in the bill of lading. A proviso keeps the right to sue within one year even when notice was late, and no written notice is needed if the goods were the subject of a joint survey or inspection at receipt.

Marine cargo claim notice under COGSA section 3(6) and Article III rule 6 of the Schedule to India's Carriage of Goods by Sea Act, 2025 is due before removal for apparent damage and within three days of delivery for concealed damage; the claims register should timestamp each notice within 24 hours of unloading.

India replaced its 1925 statute with the Carriage of Goods by Sea Act, 2025 (Act 19 of 2025), brought into force on 10 September 2025 by notification S.O. 4082(E). Article III, rule 6 of its Schedule carries the same notice wording, the same joint-survey exception and the same one-year suit period. Section 12 repeals the 1925 Act but saves rights and liabilities that had already accrued under it, so older shipments may still be measured against the earlier rules.

A usable notice is short and specific. The Lloyd's Agents cargo claims manual reproduces a notice of loss template that lists the conveyance, the goods with marks and numbers, what was lost or damaged, a sentence holding the carrier responsible, the surveyor who will inspect, and an invitation to attend that survey. Send it to every party that had custody, not only the ocean carrier.

• Ocean carrier or NVOCC: address the agent at the port of discharge named on the arrival notice, and copy the house bill issuer where a forwarder consolidated the box.
• Terminal and container freight station: notify them when the box was stripped or held there, because damage may have happened in their yard.
• Drayage or road carrier: hold the trucker liable too, since the last leg is often where a door seal fails or a load shifts.
• Your own insurer or its agent: report the loss at once and ask for a surveyor, quoting the policy or certificate number.

Booking the survey and getting the carrier to attend it

Ask the insurer, or the survey agent named on the certificate, to appoint a surveyor before damaged goods are moved, sorted or destroyed, and invite the carrier to a joint survey in the same message. A joint survey settles the facts once and, under both carriage statutes, removes the need for a separate written notice.

The surveyor works for the insurer, not for you, but the report decides most of what is paid. It records the cause and nature of the damage, the probable time and place it happened, the extent in cartons or kilograms, and what can be saved by drying, repacking or selling the damaged units. A late appointment means the surveyor reports on goods that have been handled since unloading, which weakens both claims.

• Container condition: roof and wall holes, door gasket state, condensation marks and the position of the wet cartons in the stow.
• Seal and paperwork: seal number against the bill of lading, gate receipts and any exception noted by the terminal.
• Sampling for the cause: samples from wet packaging to tell sea water from condensation or rain, because the answer moves liability between carrier, shipper's packing and nobody.
• Salvage options: reconditioning cost, a depreciation percentage for sound-but-marked units, or sale of total-loss units with the insurer's consent.

Clause 16.1 of the Institute Cargo Clauses also asks the assured to take reasonable measures to avert or minimise the loss, and clause 16 has the insurer reimburse charges properly and reasonably incurred in doing so. Moving wet cartons away from dry ones, opening them to air and stopping mould spreading are exactly those measures. Photograph before and after, and keep the labour hours and invoices as a separate cost line.

Photos taken by receiving staff support the survey but do not replace it. Our guide to cargo damage photo triage covers how to sort and preserve those images without letting software decide liability. The surveyor's report remains the document the adjuster settles against.

The claim file an underwriter will actually settle against

Underwriters settle against a short, predictable set of documents, and the Lloyd's Agents manual lists most of them. Collect originals where the issuer will provide them, because the same file later supports the insurer's recovery against the carrier.

• Claim statement: a breakdown of the amount claimed by line, showing insured value, quantities, depreciation and expenses.
• Commercial invoice and packing list: they prove value and the expected count, carton by carton.
• Bills of lading: the master and the house bill where both exist, including reverse-side terms, because a house bill can carry a different time bar.
• Insurance certificate or policy: it confirms the cover, the insured value basis and the deductible.
• Outturn and delivery receipts: receipts at each hand-over, with cargo damage receipts and tally sheets where they exist.
• Carrier correspondence: the notice of claim, the joint survey invitation and every reply or denial received.
• Container evidence: interchange receipts from loading and discharge ports and proof of seal integrity along the route.
• Survey report: the surveyor's findings on cause, extent and salvage, plus the survey fee invoice.

For bulk and liquid cargoes the manual adds draft survey or ullage reports at both ports, and for contamination losses it adds product specifications. The sale contract matters where the insured value depends on the agreed price. Missing a document does not always defeat the claim, but each gap adds a round of questions and pushes settlement towards the carrier's one-year deadline.

One year to sue the carrier, and the limits that cap recovery

The carrier and the ship are discharged from liability unless suit is brought within one year after delivery, or after the date the goods should have been delivered. That date governs the insurer's recovery, so it belongs in the claims register on the day of delivery, not on the day the insurer pays.

India's 2025 Schedule allows the one-year period to be extended if the parties agree after the cause of action has arisen, and adds a proviso that a court may allow a suit within a further period of not more than three months. Do not plan around that proviso. A written extension from the carrier, obtained before the year ends, is the normal way to keep a slow claim alive.

• US package limit: COGSA section 4(5) limits the carrier to $500 per package unless the shipper declared the nature and value of the goods before shipment and the declaration appears in the bill of lading.
• India package or weight limit: Article IV rule 5 of the 2025 Schedule sets 666.67 Special Drawing Rights per package or unit, or two Special Drawing Rights per kilogram of gross weight, whichever is higher.
• Containerised goods in India: where a container or pallet consolidates the goods, the packages enumerated in the bill of lading as packed in it count as the packages for the limit.

1. 12 March 2026, 14:20, gate-in at the DC: container ABCU 100234-5 arrives on a dray ticket; the yard clerk signs the interchange receipt with no seal remark, and the WMS creates inbound receipt IR-55812.
2. 13 March, 09:10, stripping: 180 cartons are found wet; the WMS posts them to a damage location, but the team only emails the forwarder's sales contact, not the carrier's agent.
3. 18 March, 16:00, first notice: the logistics manager sends notice to the carrier, five days after delivery, so removal now stands as prima facie evidence of good delivery.
4. 2 April, 11:00, survey: the surveyor attends after the wet cartons have been restacked twice and cannot fix where in the stow the water entered; the carrier was never invited.
5. 12 March 2027, time bar: the insurer paid in February, but nobody had asked the carrier for an extension, and the subrogated claim expires before counsel files suit.

Under both rule sets the one-year clock starts at delivery, and the trace shows it running out while the claim sat with the insurer. The cheap fix is a register field that holds the suit date from day one, with reminders at 90, 60 and 30 days, and a standard extension request sent to the carrier at the 90-day mark if no settlement is in sight. If the cargo moved on an electronic bill of lading, store the platform's transfer record with the claim.

Subrogation: how the insurer takes over the carrier claim

Once the insurer pays, it steps into your rights against the carrier for the amount it has indemnified. The signed subrogation receipt is the proof of that payment, and carriers will ask to see it before they negotiate with the insurer or its recovery agent.

India codifies the rule in section 79 of the Marine Insurance Act, 1963. On a total loss of the goods, or of an apportionable part, the insurer may take over whatever remains, such as salvage, and is subrogated to the assured's rights from the time of the casualty. On a partial loss it acquires no title to the goods but is subrogated to the assured's rights in so far as the assured has been indemnified. In US practice the policy wording and the receipt do the same work.

Subrogation under section 79 of India's Marine Insurance Act, 1963 passes the consignee's rights against the carrier to the insurer only in so far as the consignee has been indemnified, so a ₹75,000 policy deductible stays the consignee's own loss and should be claimed from the carrier alongside the insurer's recovery.

The Lloyd's manual describes the usual contents of a subrogation receipt. There is no standard form, but each version follows the same pattern, so check that yours carries every element before a signatory puts the company name to it.

• Cargo and voyage details: the goods, vessel, policy number and the loss being paid.
• Payment acknowledgement: confirmation that the assured received the stated amount under the policy.
• Transfer of rights: acknowledgement that the insurer now holds the assured's rights and remedies in the cargo.
• Use of name: permission for the insurer to sue third parties in the assured's name.

Recording the loss and the expected recovery in the ledger

Write the damaged stock down when the loss is known, and record the insurance recovery as a separate asset only when the accounting threshold is met: probable and capped at the recognised loss under US GAAP, and virtually certain under Ind AS 37. The two thresholds can put the receivable in different quarters for the same claim.

KPMG's guidance on insurance recoveries, citing ASC 410-30-35-8 and ASC 450-20-25-1, says recoveries are recognised in earnings only to the extent that losses attributable to the event have been recognised and the recovery is probable and estimable. Any recovery above the recognised loss is a gain contingency under ASC 450-30-25-1 and waits until it is realised, for example when the insurer confirms the amount to be paid.

Insurance recovery accounting for a marine cargo loss recognises the receivable under US GAAP once recovery is probable, limited to losses already recognised under ASC 410-30-35-8, while Ind AS 37 paragraph 33 waits until realisation is virtually certain, which in practice usually means the underwriter's written settlement offer.

Ind AS 37, like IAS 37 paragraph 33, does not recognise contingent assets; when realisation of the income is virtually certain the asset is no longer contingent and is recognised. A surveyor's report alone rarely reaches that bar. Under both frameworks the partially damaged cartons are written down to net realisable value as inventory, and total-loss units are written off.

• India GST credit: section 17(5)(h) of the CGST Act blocks input tax credit on goods lost, stolen, destroyed or written off, so IGST credit taken on the import of destroyed units must be reversed.
• India customs duty: section 23(1) of the Customs Act, 1962 remits duty on imported goods lost (other than by pilferage) or destroyed before clearance for home consumption, so a loss found at the CFS should be reported before the bill of entry is cleared.
• US entry value: 19 CFR 158.12 lets merchandise partially damaged at importation be appraised in its imported condition with an allowance for the damage, which needs the survey before liquidation.
• Period-end ownership: who bears the loss depends on when risk passed; our guide to goods in transit at period end covers that test.

Worked claim on a wetted container in dollars and rupees

One container, two markets: an importer in the United States and one in India each receive cartons damaged by water, with the same survey outcome and different accounting timing. All figures are illustrative; your policy sets the insured value basis, the deductible and which expenses are payable.

Claim payable  C = IVu x (Nt + Np x d) + S - D
Carrier recovery R = min(L, P x lim)       (if no value was declared)

IVu = insured value per carton (here CIF value x 110%)
Nt  = cartons agreed as total loss by the surveyor
Np  = cartons sound but marked, sold at a discount
d   = depreciation agreed for Np (0.00 to 1.00)
S   = survey fee and reasonable minimising costs payable under the policy
D   = policy deductible
L   = proven loss at the carrier's liability basis
P   = packages enumerated in the bill of lading
lim = $500 per package (COGSA s.4(5)); in India, the higher of
      666.67 SDR per package and 2 SDR per kg gross weight
Notice deadline = delivery date + 3 days (concealed damage)
Suit deadline   = delivery date + 1 year, unless extended in writing

The US claim is below the recognised loss, so the whole receivable qualifies once recovery is probable and none of it is a gain contingency. In the Indian case the same survey outcome may sit unrecognised at quarter-end if the insurer has not yet confirmed the amount in writing, leaving the full ₹12,73,000 loss in that quarter and the recovery in the next.

The carrier recovery runs separately. With 180 damaged cartons enumerated as packages, a $500 limit gives the carrier a ceiling of $90,000, well above the loss, so the limit does not bind. Had the bill of lading described one container said to contain goods without listing the cartons, the package count would be contested and the recovery could shrink sharply.

What claims software should calculate and what adjusters decide

Date arithmetic, matching and posting belong to fixed rules; reading a survey report, judging a cause and accepting an offer stay with people. Software can draft and extract, but the person named in the table signs the outcome.

Setting up a claims register before the next damaged box arrives

A claims register with fixed date fields, named owners and a document checklist turns the first week after a loss into a routine. Build it before the next loss, test it on the last three claims you closed, and give finance and logistics the same view.

Most damage still starts with a receiving team that does not know a three-day rule exists, so put the notice step in the receiving SOP, not only in the finance manual. If you want help wiring claim dates, survey documents and ledger flags into your TMS and ERP, send us your requirements through the project request form.