Responsibilities of Insured in Cargo Insurance

• Key Responsibilities of the Insured

1. Accurate Disclosure of Information

2. Proper Packaging and Handling

3. Timely Premium Payment

4. Immediate Notification of Loss or Damage

• Common Claim Denial Reasons

• Summary – Responsibilities at a Glance

When buying cargo insurance, the insured must meet certain responsibilities to keep the policy valid. Understanding these duties is crucial for smooth claims and proper coverage. This blog outlines these obligations, supported by data on common claim challenges, to help businesses comply and prevent unnecessary disputes.

Key Responsibilities of the Insured

Accurate Disclosure of Information

The insured must provide truthful and complete information about:

- Cargo details (type, value, and condition)

- Shipping route, packaging standards, and transport mode

- Any previous losses or claims

Misrepresentation or failure to disclose can result in claim denial or policy cancellation.

Proper Packaging and Handling

Insurance policies usually require goods to be packed in a way that can withstand typical transit risks. If improper packing causes damage, the insurer may reject the claim. Using industry-standard packaging is essential.

Timely Premium Payment

The policy stays valid only if the insured pays premiums on time. Late or missed payments can result in a lapse, leaving shipments unprotected.

Immediate Notification of Loss or Damage

The insured must notify the insurer or broker quickly if a loss occurs. This includes:

- Submitting damage reports and relevant documents (bills of lading, invoices, surveyor’s reports)

- Taking reasonable steps to reduce further loss or damage

Common Claim Denial Reasons

41% of denied cargo claims come from improper or inadequate packaging.

27% result from late notification or incomplete documentation.

18% are due to misrepresentation or incorrect cargo declarations.

Summary – Responsibilities at a Glance

Responsibility	Why It Matters
Accurate Disclosure	Prevents policy disputes and denials
Proper Packaging	Ensures transit safety and claim approval
Premium Payment	Keeps the policy active
Timely Notification	Allows quick claim processing

Understanding the responsibilities of the insured under a cargo insurance contract is vital to protect your goods and avoid coverage problems. By ensuring proper documentation, packaging, and timely communication, businesses can simplify claims and reduce risks.