Marine Insurance Claims (IC-66)
Handling the marine claim
Claims work begins with notification, reservation of rights, and evidence gathering: bill of lading, invoice, packing list, survey report, protest, and photographs. Establish the cause and date of loss and whether the loss occurred during the insured transit. Then classify: total loss (actual or constructive), particular average, general average, or sue and labour expense. Each has a different measure of indemnity.
Measure of indemnity
For cargo, the measure is the insured value (often CIF plus 10%), not the market value on arrival. Partial damage is usually settled on a depreciation basis: (sound value − damaged value) ÷ sound value × insured value. General average is adjusted by an average adjuster; the insurer pays the assured's contribution. Salvage is credited to the insurer; subrogation rights follow payment.
Traps
- Settling on invoice value when the policy insures CIF+10%.
- Treating a general average sacrifice as an ordinary partial loss.
- Missing the notice of abandonment requirement for constructive total loss.
- Failing to reserve rights where unseaworthiness or delay is suspected.
- Double counting salvage and subrogation recoveries.
Worked example
Insured value 110,000. Sound value on arrival 100,000; damaged value 70,000. Depreciation = 30,000 ÷ 100,000 = 30%. Claim = 30% × 110,000 = 33,000, less any policy deductible.