Claims Handling, Subrogation, and Recovery
Scope
This domain covers the claim lifecycle from notice to recovery, with emphasis on subrogation and the insured's duty to preserve rights against carriers and other third parties.
Claims handling
- Receive notice, check policy/certificate, date of loss, voyage and insured value.
- Appoint a surveyor where required; obtain documents and a reservation-of-rights letter if coverage is unclear.
- Assess coverage first, then quantum. Separate insured loss, general average, salvage and sue-and-labour.
- Pay only after obtaining a letter of subrogation and, where needed, a discharge.
- Pursue recovery promptly; preserve limitation periods and carrier liability rights.
Subrogation
On payment, the insurer is subrogated to the insured's rights to the extent of the indemnity. The insured must not prejudice those rights. Recovery is limited to the amount paid; any excess belongs to the insured. The insurer does not acquire title to the cargo merely by paying a partial loss.
Worked example
A carrier's negligent stowage damages cargo. The insurer pays ₹8,00,000. The carrier's Hague-Visby package limitation reduces recovery to ₹3,00,000. The insurer bears the shortfall; it cannot recover more than it paid or bypass the carrier's lawful defences. If the insured had already waived rights against the carrier, the insurer may reduce or reject the claim for prejudice.
Traps
Do not confuse subrogation with abandonment. Do not settle without a subrogation letter. Do not miss the one-year carrier time bar or ignore package limitation. Do not let the insured retain recovery that belongs to the insurer.