When a shipment arrives damaged, you have to act fast. Signing the delivery receipt without noting the damage can get your entire shipping insurance claim denied. This simple mistake legally establishes that the goods arrived in perfect condition, leaving you to cover the loss.

This guide walks through the exact steps for a successful shipping insurance claim. We’ll cover the critical actions you must take, like documenting damage on the delivery receipt within the strict 3-day window for ocean freight. You’ll also learn how to prepare the right evidence to get your claim settled in the standard 4-to-8-week timeframe, and understand the difference between ‘All Risk’ and ‘Catastrophe-Only’ marine insurance policies.

Clause A (All Risk) vs. Clause C (Total Loss Only)

Clause A provides broad ‘All Risk’ coverage, insuring against any accidental physical loss unless an event is specifically excluded. Clause C is a minimal, ‘Named Perils’ policy that only covers catastrophic events like fire, sinking, or collision, and generally excludes partial losses from common risks like theft or handling damage.

Clause A: Comprehensive ‘All Risk’ Coverage

Based on the Institute Cargo Clauses (A), this policy covers any accidental physical loss or damage to your cargo from any external cause. Coverage is the default, and the burden of proof is on the insurer to show that a specific, written exclusion applies. Common exclusions include inherent vice (natural deterioration of the goods), ordinary leakage or wear and tear, inadequate packing, and deliberate damage.

This broad protection covers frequent supply chain risks not included in Clause C, such as theft, pilferage, rainwater damage, and dents from rough handling. Because it provides the highest level of security against loss, banks often mandate Clause A coverage as a condition for issuing letters of credit or providing trade finance.

Clause C: Catastrophe-Only ‘Named Perils’ Coverage

Clause C is a restrictive policy that only covers losses from a specific list of major events. It does not cover “all risks.” Instead, it indemnifies the insured only for damage caused by perils named in the policy, such as fire, explosion, vessel sinking or grounding, collision, and jettison (throwing cargo overboard to save the vessel). This policy functions like “total loss only” coverage, where partial damage like dents, scratches, or theft of some items is not covered unless caused by a listed catastrophe.

This option is suitable for shippers willing to self-insure against most common, non-catastrophic damages and who are primarily concerned with a total loss of the shipment. The premiums reflect this limited risk, typically ranging from 0.1% to 0.5% of cargo value, compared to 0.5% to 1.5% for the much broader Clause A coverage.

The “General Average” Risk (Sharing Ship Repairs)

General Average is a maritime rule where all parties in a sea venture, including ship and cargo owners, proportionally share losses resulting from a voluntary sacrifice made to save the entire trip. This often covers costs for emergency ship repairs, salvage, or expenses at a port of refuge.

What Triggers a General Average Declaration?

Shipping contracts typically incorporate the York–Antwerp Rules (YAR) 2016 to define the process. A General Average event happens only when an “extraordinary sacrifice or expenditure is intentionally and reasonably made” to save the ship and all its cargo from a common peril. Common costs covered include damage from intentionally grounding a ship to avoid sinking, harm from firefighting measures, and expenses at a “port of refuge” for emergency repairs and cargo handling.

The Security Demand and Insurance Response

Once General Average is declared, the shipowner holds a legal lien on all cargo until its owner provides security for their share of the costs. An “average adjuster” calculates each party’s pro-rata contribution and demands a General Average Bond plus either a cash deposit or a General Average Guarantee from an insurer. Marine cargo insurance policies that cover “General Average and Salvage Charges” are the standard method for managing this risk. The insurer posts the required guarantee and pays the final contribution, preventing a direct and often significant financial impact on the cargo owner.

Step 1: Note Damages on the Delivery Receipt (POD)

You must write down any visible damage or shortage on the carrier’s delivery receipt before signing it. This note, or ‘exception,’ is your primary evidence. Without it, the carrier can legally argue the goods arrived in perfect condition, which can cause your insurance claim to be denied.

The Proof of Delivery (POD) is more than just a receipt; it’s a legal document that establishes the condition of your goods upon arrival. Taking a few moments to inspect the shipment and accurately record any issues on this document is the single most important step you can take to protect your right to a successful insurance claim. Different shipping modes have strict deadlines for reporting issues, all of which start from the date on the POD.

Why a ‘Clean’ Receipt Can Invalidate a Claim

The delivery receipt is a legal document. When you sign it without any notes about damage or shortages, it becomes a “clean receipt.” Both carriers and insurers view a clean receipt as definitive proof that the shipment arrived complete and in good condition. If damage is discovered later, the carrier can use the clean receipt as a legal defense to deny responsibility, which often leads the insurer to deny the claim as well.

How to Properly Document Exceptions

Be specific and detailed when noting issues on the delivery receipt. Avoid vague terms like “box damaged.” Instead, write clear descriptions such as “3 cartons crushed, water-stained, one pallet broken.” If there are shortages, document the exact numbers, for example, “Received 97 of 100 boxes.” You should also note the condition of container seals if they appear broken or have been tampered with. After signing, always keep a copy of the receipt with your notes for your claim file and retain all the damaged goods and packaging you referenced for a potential inspection.

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Step 2: Take Photos Immediately

Upon receiving a shipment, immediately photograph the unopened box from all angles, including its manufacturing certificate. Then, document the unpacking with photos or video, capturing close-ups of any damage alongside all the internal packing materials to establish a clear record of the item’s condition on arrival.

Photograph External Packaging Before Unboxing

Before you open the package, take photos of all sides to document its condition upon arrival. Capture any handling labels, like ‘Fragile,’ and the quality of the tape seals. It is crucial to also photograph the Box Manufacturer’s Certificate (BMC), usually found on a box flap. This certificate details the container’s specifications, such as its weight limit and stacking strength in pounds per square inch, providing clear evidence of the packaging’s intended durability.

Detail the Damage and Internal Packing Materials

Use high-resolution, uncompressed photos from multiple angles to document the damage. Take close-up shots to show the specific points of impact and wider shots that display the entire product. Lay out all internal packing materials—like foam, bubble wrap, or peanuts—next to the damaged item and photograph them together. This proves whether the protective cushioning was sufficient for transit. A continuous, time-stamped video of the unboxing process offers an even stronger layer of verification for your claim.

The Claims Process Timeline

In 2026, a typical marine cargo insurance claim takes 4 to 8 weeks to resolve. The entire process can range from 2 to 12+ weeks and involves immediate notification (within 72 hours), a multi-week investigation, and a final settlement phase. Complete documentation is critical to avoid delays.

Standard Claim Duration (2 to 12 Weeks)

Most marine cargo claims are resolved within a 2 to 12-week window from the first notice of loss. The industry average for a standard, well-documented claim is between 4 and 8 weeks. The fastest claims, often those with complete digital documentation submitted promptly, can settle in under 14 days.

Key Timeline Stages and Delay Factors

The process begins with an initial notification, where you must inform the insurer within 24 to 72 hours of discovering the loss to preserve coverage. This triggers the investigation and survey phase, which typically lasts 1 to 6 weeks while the insurer’s surveyor inspects damage and reviews documents. After the claim is approved, the final settlement and payout process takes an additional 1 to 4 weeks. The main reason for claims extending beyond 12 weeks is incomplete or inaccurate documents, which stalls the entire timeline.

Final Thoughts

Handling a damaged shipment correctly comes down to what you do in the first few minutes of delivery. Always inspect your cargo before signing the delivery receipt and clearly write down any visible issues like crushed boxes or broken seals. Without this note, you lose your best proof that the damage happened in transit. Pairing this with immediate, detailed photos of the packaging and the damaged item creates a strong evidence file for your insurer. These simple actions are the most effective way to protect your claim.

Beyond the claims process, choosing the right insurance policy from the start is just as critical. A comprehensive ‘All Risk’ policy (Clause A) offers much broader protection against common problems like theft and handling damage than a basic ‘Total Loss’ policy. It also covers you for unexpected events like General Average, where you might have to help pay for the ship’s repairs. Viewing cargo insurance as a key part of your logistics strategy protects your financial investment and keeps your business running smoothly when disruptions happen.

Frequently Asked Questions