Fraud Indicators and Red Flags in Marine Claims
Domain 2 tests how to identify, weigh, and document red flags without treating them as verdicts. A red flag is a fact that is more common in fraudulent claims than in genuine ones; it is probabilistic, not proof. Investigators should look for clusters, establish a baseline, and actively test innocent explanations.
Core rules
- Timing flags: late notice, delay in reporting damage, or a claim filed just before policy expiry.
- Financial flags: insured value above market value, cash-flow distress, repeated claims, or a claim amount just under a limit or deductible.
- Documentary flags: altered invoices, inconsistent fonts or dates, missing originals, clean bills of lading contradicted by survey findings, and related-party repairers or suppliers.
- Physical flags: damage inconsistent with the stated peril, pre-existing corrosion, uniform damage patterns, or cargo damage that could not occur in the declared stowage.
- Behavioural flags: evasive answers, pressure for quick settlement, refusal to provide records, or an unusually close relationship with the surveyor.
- Voyage flags: unexplained route deviation, AIS gaps, unrecorded port calls, or cargo transferred outside normal terminal controls.
Worked example
A reefer cargo claim alleges total spoilage. The temperature log is missing, the invoice was reissued with a higher unit price, the surveyor was appointed by the claimant's broker, and the claim is priced just below the policy limit. No single flag proves fraud. Together they justify document verification, an independent survey, carrier records, and a recorded interview. If the log shows the reefer unit was switched off only after discharge, the damage narrative collapses.
Traps
Checklist thinking, single-flag conclusions, confirmation bias, and ignoring base rates all cost marks. A red flag must be explained, not merely listed.