Water Damage Cargo Claim — Complete Guide for Indian Exporters

A water damage cargo claim arises when insured goods suffer covered loss or physical damage because of water during an insured transit. Water damage can occur due to seawater ingress, rainwater, freshwater, flooding, container leakage, vessel-related incidents or condensation. Whether the loss is covered depends on the marine cargo insurance policy, selected clauses, exclusions and circumstances of the damage. For Indian exporters, prompt action after discovering water damage is extremely important. Immediately inform the marine insurer or relevant claims contact, preserve photographs and videos of the damaged cargo, packaging, container and seals, and avoid unnecessarily disposing of, altering or repairing damaged goods before the insurer or appointed surveyor has had an opportunity to inspect them. The Bill of Lading, commercial invoice, packing list, delivery receipt and any damage notation or exception report should also be preserved for the claim assessment. A marine cargo survey may be arranged to inspect the extent and probable cause of the water damage. The surveyor may examine the external condition of the container, packaging, wet cartons, damaged pallets, affected machinery, stained products and other physical evidence. For containerised shipments, evidence relating to the container condition and seals can be important. Ceramic tiles may suffer damaged packaging or staining, while minerals, chemicals and powders can be affected by moisture, contamination or caking. Machinery and electrical equipment may experience corrosion or other physical damage following water exposure, while textiles, garments, paper products, food, agricultural products and other moisture-sensitive cargo may suffer deterioration. The insured should take reasonable steps to minimise further damage and document any mitigation measures. However, not every instance of wet cargo is automatically covered. Institute Cargo Clauses A, B and C have different scopes of cover and exclusions, while risks such as delay, inherent vice, inadequate packing and other excluded causes may affect the claim.