Since this is a soft-sided cooler, the interior lining is intended for insulation and is water-resistant, but it is not completely waterproof, and cannot hold residual water.
We provide the following details on the item description online:

Due to this, we suggest using ice packs rather than loose ice in this item.
Nonetheless, we understand these mistakes can happen and not everyone encounters this problem when using loose ice in the soft-sided cooler. If you find that the insulated liner is compromised with a tear or hole, please reach out to customer service.