Frequent Cargo Damage After Typhoons? A Quick Guide to Marine Insurance Claims

Frequent Cargo Damage After Typhoons? A Quick Guide to Marine Insurance Claims

I. Common Types of Cargo Damage Caused by Typhoons

Following Typhoon “XX” in September 2025, ports across East Asia reported a surge in cargo damage cases. Below are the main types of losses caused by typhoons and typical examples:

1. Water Damage

• Flooded Storage Yards: Storm surges submerged low-lying areas at Yantian Port (Shenzhen), damaging around 2,000 TEUs of electronics and paper products, with estimated losses exceeding $5 million.
• Cargo Hold Leaks: Improperly sealed containers on a vessel allowed rainwater to seep in, spoiling a shipment of bananas from the Philippines, resulting in a total loss.

2. Physical Impact & Collapse

• Container Stack Collapses: Strong winds at Ningbo Port toppled stacked containers, shattering 40% of the ceramic goods in the bottom units.
• Crane Accidents: A malfunctioning crane at Kaohsiung Port dropped five containers carrying precision instruments during post-typhoon operations.

3. Time-Sensitive Spoilage

• Cold Chain Failures: Power outages at Shanghai Port caused refrigerated containers to overheat, ruining 30 tons of Australian beef and leading to rejected shipments.
• Chemical Degradation: Delayed delivery of liquid chemicals from South Korea triggered polymerization due to prolonged storage, rendering the entire batch unusable.

Data Alert: In 2024, typhoon-related claims accounted for 32% of global marine insurance payouts, with water damage representing 65% of such cases.

II. Marine Insurance Coverage: What’s Covered?

1. Comparison of Basic Policies

2. Common Coverage Disputes

• “Natural Disaster” Definitions: Some policies classify typhoons as force majeure; confirm if “adverse weather extensions” apply.
• “Duty to Mitigate”: Insurers may deny claims if shippers fail to secure cargo or relocate it promptly (see 2023 Guangzhou Court precedent).

3. Recommended Add-Ons

• Freshwater Damage Clause: Covers rain-related losses excluded under WA.
• Rejection Risk Insurance: Protects against perishable goods being refused due to spoilage delays.

III. Step-by-Step Claims Guide

1. Critical Actions Within 24 Hours

1. Document Evidence: Photograph damage (wide shots + close-ups) and environmental proof (e.g., flood levels).
2. Third-Party Reports: Hire surveyors (e.g., SGS/CCIC) to issue damage inspection certificates.
3. Loss Mitigation Notice: Notify carriers in writing to preserve claim rights and request an Incident Acknowledgment Form.

2. Required Documents

• Original insurance policy (or endorsed e-document)
• Bill of Lading (B/L) and packing list
• Official typhoon track records from meteorological agencies
• Damage reports from ports/shipping lines

3. Negotiation Tactics

• Dispute Handling: If insurers cite “poor ventilation” as grounds for denial, counter with Maritime Law Article 51 on carrier liability.
• Claim Calculations:
  • Total loss: Recover CIF invoice value.
  • Partial loss: Repair costs + depreciation (e.g., 30% value loss for water-stained garments).

IV. Legal Precedents & Industry Advice

1. Landmark Cases

• 2024 Evergreen Cargo Case: Courts ruled container collapses during typhoons fall under “All Risks,” with carriers bearing 60% liability.
• 2023 Shenzhen Electronics Claim: Without freshwater coverage, insurers paid only 50% of seawater damage under WA.

2. Preventive Measures

• Enhanced Packaging: Waterproof stretch film + desiccants (cost: +$5/TEU) can reduce damage rates by 30%.
• Dynamic Coverage: Purchase “adverse weather riders” during typhoon season (premium: ~0.3% of cargo value).

V. Typhoon Season Preparedness Checklist

1. When Insuring: Clarify policy definitions of “typhoon”; avoid vague terms like “natural disasters.”
2. In Transit: Use IoT sensors (e.g., TrackFresh) for real-time container humidity/temperature monitoring.
3. Legal Prep: Add “claims assistance clauses” to contracts, requiring sellers to provide original quality certificates.