Transit losses often turn into costly disputes not because the damage is severe, but because no one is sure who was actually responsible: the buyer, the seller, or the logistics partner.
This confusion arises because marine insurance is often misunderstood or inconsistently applied across the supply chain. When responsibilities are not clearly defined, claims get delayed, denied, or reduced, leaving businesses exposed to losses that could have been fully recoverable.
Where the Confusion Begins
In many transactions, the ownership of goods during transit is unclear, and so is the responsibility for insuring them.
For example:
- A buyer may assume the seller insured the goods.
- The seller may assume the buyer took responsibility after dispatch.
- The 3PL may claim their liability ends once they hand over proof of shipment.
This is why businesses lose crores every year, not because of the loss itself, but because of unclear contracts, missing documents, and poorly understood marine policies.
The 10-Minute Checklist That Prevents 90% of Transit Disputes
- Who owns the goods at each stage of transit? (Buyer or seller?) Ownership determines who must insure the goods and without this clarity, claims get rejected.
- Who is responsible for insurance as per INCOTERMS? INCOTERMS define the legal handover point and misunderstanding them causes major coverage gaps.
- Is the 3PL’s liability policy adequate for your cargo value? Most logistics partners have very limited liability; assuming “they’re covered” is a costly mistake.
- Are packaging and loading standards clearly documented? Insurers often deny claims due to “improper packaging.” Documentation protects you.
- Is the invoice value correctly reflected in the marine policy? Underinsurance or outdated cargo values lead to partial settlements or deductions.
- Are high-value shipments insured separately, not clubbed? Bundling expensive cargo with regular shipments increases the risk of under-coverage.
- Is the mode of transport (road/sea/air) correctly mentioned? Wrongly declared transit mode is one of the most common reasons for claim repudiation.
- Are delay, theft, and pilferage included or excluded? Many businesses assume these are covered but most basic marine policies exclude them.
- Is the claims process clearly defined and pre-agreed? Knowing documentation requirements in advance speeds up approval and prevents disputes.
- Is the policy updated with current cargo values and shipment frequency? Old policies don’t reflect price hikes or volume growth, leaving you exposed to major shortfalls.
This checklist takes less than 10 minutes to review but it can prevent crores in losses, delays, and legal disputes.
The Bottom Line
Transit risks are unavoidable. Transit losses, however, are preventable if responsibilities are defined and coverage is clear.
Marine insurance is only as strong as the coordination behind it. When the buyer, seller, and logistics partner are aligned, claims become smoother, faster, and far more likely to be paid in full.
Before your next dispatch leaves the warehouse, take 10 minutes to close the gaps. Request Beacon’s Marine Risk Checklist and Policy Review.
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