OCEAN MARINE
Chapter: Ocean Marine Institute Cargo Clause (A) covers which of the following losses? A Ordinary leakage, ordinary loss in weight or volume, or ordinary wear and tear B Insolvency or financial default of the owners or operators of the vessel C Windstorm, lightning, hail D War, strikes, riots, and civil commotion
C Windstorm, lightning, hail Correct! It covers all perils except: delay; inherent vice; willful misconduct of the insured; war, strikes, riots and civil commotion; use of any atomic or nuclear weapon; ordinary leakage, ordinary loss in weight or volume, or ordinary wear and tear; insufficiency or unsuitability of packing; the assured's knowledge of the unseaworthiness of the vessel or container at time of loading; insolvency or financial default of the owners or operators of the vessel.
Chapter: Ocean Marine Institute Cargo Clause (A) covers which of the following losses? A Ordinary leakage, ordinary loss in weight or volume, or ordinary wear and tear B Insolvency or financial default of the owners or operators of the vessel C Windstorm, lightning, hail D War, strikes, riots, and civil commotion
C Windstorm, lightning, hail correct! It covers all perils except: delay; inherent vice; willful misconduct of the insured; war, strikes, riots and civil commotion; use of any atomic or nuclear weapon; ordinary leakage, ordinary loss in weight or volume, or ordinary wear and tear; insufficiency or unsuitability of packing; the assured's knowledge of the unseaworthiness of the vessel or container at time of loading; insolvency or financial default of the owners or operators of the vessel.
Which of the following clauses under an Open Cargo Policy is the MOST restrictive? A Transportation Clause B With Particular Average Clause C All Risk Form D Free of Particular Average Clause
D Free of Particular Average Clause Correct! The Free of Particular Average clause (now known as Institute Cargo Clause (C)) is the narrowest form of coverage. It covers total loss only.
Which of the following clauses under an Open Cargo Policy is the MOST restrictive? A Transportation Clause B With Particular Average Clause C All Risk Form D Free of Particular Average Clause
D Free of Particular Average Clause correct! The Free of Particular Average clause (now known as Institute Cargo Clause (C)) is the narrowest form of coverage. It covers total loss only.
In ocean marine insurance, what does the term "average" mean? A Loss or damage B Standard risk C Property eligible for coverage D Premium paid for the policy
A Loss or damage correct! Average in ocean marine language means loss or damage.
Containerships are used to transport A Motor vehicles. B Containerized cargo. C Coal, grain, phosphates, and other "loose" cargo. D Break-bulk cargo.
B Containerized cargo. Correct! Also called "box" ships, cargo is carried in 20 or 40 foot containers. This requires much less off-load and on-load time than break-bulk cargo.
Which clause provides coverage for the cargo while being transported to or from a vessel in another craft, raft, or lighter? A The voyage clause B The transportation clause C The transit clause D The craft clause
D The craft clause Correct! The craft clause provides coverage for the cargo while being transported to or from the vessel in another craft, raft, or lighter.
The term used to describe the cost and charges associated with the transfer of goods from one location to another is A Freight. B Transfer. C Cargo. D Shipping.
A Freight. Correct! The term freight is used to describe the charges made to ship cargo from place to place. The term freight insurance is used to describe the "indirect loss" that an insured would suffer if insured cargo is lost or damaged.
Which of the following is NOT true if ownership changes, voluntary or otherwise? A If the vessel already has sailed from her loading port, automatic termination may be deferred until 15 days after arrival at final port of discharge. B The ocean marine policy shall terminate automatically at the time of ownership change. C If the vessel already has sailed from her loading port, automatic termination may be deferred until arrival at the final port of discharge. D If involuntary temporary transfer occurs without prior written agreement by the assured, automatic termination shall occur 15 days after transfer.
A If the vessel already has sailed from her loading port, automatic termination may be deferred until 15 days after arrival at final port of discharge. correct! This is a part of the Standard American Institute Hull Clauses (AIHC).
In a marine policy, which of the following is referred to as the "amount insured hereunder"? A The limit of insurance B The deductible C The agreed value D The duration of risk
A The limit of insurance Correct! The limit of insurance is called the amount insured hereunder.
In a marine policy, which of the following is referred to as the "amount insured hereunder"? A The limit of insurance B The deductible C The agreed value D The duration of risk
A The limit of insurance correct! The limit of insurance is called the amount insured hereunder.
Chapter: Ocean Marine As you leave the dock in your yacht, you carelessly cut in front of another yacht, causing its crew to change course. They run into a buoy damaging their boat. What coverage takes care of the damages? A Your P&I B Your Inchmaree clause C The collision clause of your hull policy D The other boat's hull policy
A Your P&I correct! Your protection and indemnity coverage pays for damage to other vessels not caused by collision. The collision clause of your hull policy would pay for damage to other vessels you collide with.
Chapter: Ocean Marine In ocean marine insurance, what does the term "average" mean? A Premium paid for the policy B Loss or damage C Standard risk D Property eligible for coverage
B Loss or damage Correct! Average in ocean marine language means loss or damage.
If the underwriters direct a vessel to proceed to a particular port for repair, who pays the expenses, including wages and maintenance, of doing so? A The owners of the vessel B The insurer C The assured D The crew
B The insurer Correct! If the underwriters direct the vessel to proceed to a particular port for repair, the insurer will pay the expenses of doing so, including wages and maintenance for the master, officers, and crew. Review ContentNext Question
Bulk carriers are used to transport A Motor vehicles. B Containerized cargo. C Loose cargo. D Break-bulk cargo.
C Loose cargo. Correct! Bulk carriers are used to carry coal, grain, phosphates, and other loose cargo. The ship itself is the container for the cargo.
Which clause provides coverage for the cargo while being transported to or from a vessel in another craft, raft, or lighter? A The transportation clause B The transit clause C The craft clause D The voyage clause
C The craft clause correct! The craft clause provides coverage for the cargo while being transported to or from the vessel in another craft, raft, or lighter.
Cargo is damaged short of its destination. An agent of the insurer at an immediate port sells the damaged cargo at the best price. Settlement is based on the difference between insured value and the net sales proceeds. This is considered A A salvage loss. B Sue and labor. C A general average. D A particular average.
A A salvage loss. Correct! If the cargo is damaged short of the destination port, an agent of the insurer at an intermediate port may agree to sell it at the best price. Settlement will be based on the difference between insured value and the net proceeds of the sale. This is called a salvage loss.
An ocean marine adventure is A Any voyage. B A measure of indemnity. C A pleasure cruise. D Loss or damage.
A Any voyage. Correct! In ocean marine terms, an adventure is a trip or voyage.
Chapter: Ocean Marine Ocean marine policies commonly refer to the person covered by the policy as the A Assured. B Master. C Policy owner. D Inchmaree.
A Assured. correct! Ocean marine policies commonly refer to the person covered by the policy as the assured. (From common ocean marine terms in use since 1689.)
Chapter: Ocean Marine General-cargo ships are used to transport A Break-bulk cargo. B Motor vehicles. C Containerized cargo. D Coal, grain, phosphates, and other loose cargo.
A Break-bulk cargo. correct! General cargo ships are generally used to carry break-bulk cargo. Break-bulk cargo is cargo that is too large to be carried in a container or boxed goods, or too small to justify use of a full container.
Which of the following is NOT a P&I exclusion? A Excess coverage B Damage to hull and machinery C Commercial towing of other vessels D Detention of vessel
A Excess coverage correct! Under the coverage of damage to docks, buoys, and other structures, after the limit of liability for a covered loss, the P&I policy will provide excess coverage.
Which of the following clauses under an Open Cargo Policy is the MOST restrictive? A Free of Particular Average Clause B Transportation Clause C With Particular Average Clause D All Risk Form
A Free of Particular Average Clause correct! The Free of Particular Average clause (now known as Institute Cargo Clause (C)) is the narrowest form of coverage. It covers total loss only.
Chapter: Ocean Marine An ocean marine hull policy will not pay any of the following EXCEPT A Legal liability for damage to another's ship the insured has run down B Losses caused by war or strikes C Loss or damage from nuclear weapon or by radioactive material D Costs for scraping and painting the underwater part of the vessel due to fouling
A Legal liability for damage to another's ship the insured has run down Correct! According to the Standard American Institute Hull Clauses, an ocean marine hull policy will pay for legal liability for collision damage to another's ship. Such things as war, strikes, decay, deterioration, and inherent vice are not covered.
Chapter: Ocean Marine If a pilotage and towing firm is responsible for damage done to a vessel while the vessel is under its control, who is liable for the damage? A The insurer of the pilotage and towing firm B The vessel's assured C The insurer of the vessel D The vessel's owners or managers
A The insurer of the pilotage and towing firm Correct! If the pilotage or towing firm is responsible for the damage, the firm would be liable for paying for it.
Chapter: Ocean Marine The other insurances clause of an ocean marine policy allows coverage for which reasons? A To obtain coverage for war, strikes, and related risks not covered by the policy B To replace an existing policy C To add endorsements D To expand existing coverages such as earthquake, fire, and hail
A To obtain coverage for war, strikes, and related risks not covered by the policy Correct! Standard American Institute Hull Clauses (AIHC) allow coverage for war, strikes, and related risks not covered by the policy.
Chapter: Ocean Marine The other insurances clause of an ocean marine policy allows coverage for which reasons? A To obtain coverage for war, strikes, and related risks not covered by the policy B To replace an existing policy C To add endorsements D To expand existing coverages such as earthquake, fire, and hail
A To obtain coverage for war, strikes, and related risks not covered by the policy correct! Standard American Institute Hull Clauses (AIHC) allow coverage for war, strikes, and related risks not covered by the policy.
Chapter: Ocean Marine Institute Cargo Clause A covers all losses except those that are excluded. Which of the following excluded perils can be endorsed back onto the policy to provide coverage? A War, strikes, riots, and civil commotion B The ship captain was caught stealing cargo C The cargo was not packed to withstand extremes of weather and temperature D The ship is infested with spiders
A War, strikes, riots, and civil commotion Correct! For an addition premium, the policy may be endorsed to cover losses caused by war, strikes, riots, and civil commotion.
Institute Cargo Clause A covers all losses except those that are excluded. Which of the following excluded perils can be endorsed back onto the policy to provide coverage? A War, strikes, riots, and civil commotion B The ship captain was caught stealing cargo C The cargo was not packed to withstand extremes of weather and temperature D The ship is infested with spiders
A War, strikes, riots, and civil commotion correct! For an addition premium, the policy may be endorsed to cover losses caused by war, strikes, riots, and civil commotion.
Chapter: Ocean Marine If cargo is damaged short of destination, Lloyd's agent at an intermediate port may agree to sell at best price, with settlement based on the difference between insured value and net proceeds of the sale. This is considered A A general average. B A salvage loss. C Sue and labor. D A particular average.
B A salvage loss. Correct! This is standard ocean marine terminology.
If the ocean marine contract pays the ACV of the property just prior to the loss, it is A A valued contract. B An indemnity contract. C A replacement cost contract. D A demurrage contract.
B An indemnity contract. correct! The insured must not profit from the loss but instead be put back into the same financial condition as before the loss (normally ACV); this is considered an indemnity contract.
Chapter: Ocean Marine An ocean marine adventure is A Loss or damage. B Any voyage. C A measure of indemnity. D A pleasure cruise.
B Any voyage. Correct! In ocean marine terms, an adventure is a trip or voyage.
Chapter: Ocean Marine Which of the following is NOT a P&I exclusion? A Detention of vessel B Excess coverage C Damage to hull and machinery D Commercial towing of other vessels
B Excess coverage correct! Under the coverage of damage to docks, buoys, and other structures, after the limit of liability for a covered loss, the P&I policy will provide excess coverage.
Chapter: Ocean Marine Which of the following clauses under an Open Cargo Policy is the MOST restrictive? A All Risk Form B Free of Particular Average Clause C Transportation Clause D With Particular Average Clause
B Free of Particular Average Clause correct! The Free of Particular Average clause (now known as Institute Cargo Clause (C)) is the narrowest form of coverage. It covers total loss only.
Chapter: Ocean Marine The term used to describe the cost and charges associated with the transfer of goods from one location to another is A Shipping. B Freight. C Transfer. D Cargo.
B Freight. Correct! The term freight is used to describe the charges made to ship cargo from place to place. The term freight insurance is used to describe the "indirect loss" that an insured would suffer if insured cargo is lost or damaged.
Chapter: Ocean Marine In accordance with American Institute Hull Clauses, a pro rata return of premium will be given for all the following reasons EXCEPT A If policy is cancelled by the underwriters. B If the policy is cancelled by the insured. C For each period of 30 consecutive days the vessel may be laid up in port not under repairs. D In event of termination under the change of ownership clause.
B If the policy is cancelled by the insured. correct! If the policyholder cancels, a short rate refund is due.
Chapter: Ocean Marine Which of the following is NOT true if ownership changes, voluntary or otherwise? A If involuntary temporary transfer occurs without prior written agreement by the assured, automatic termination shall occur 15 days after transfer. B If the vessel already has sailed from her loading port, automatic termination may be deferred until 15 days after arrival at final port of discharge. C The ocean marine policy shall terminate automatically at the time of ownership change. D If the vessel already has sailed from her loading port, automatic termination may be deferred until arrival at the final port of discharge.
B If the vessel already has sailed from her loading port, automatic termination may be deferred until 15 days after arrival at final port of discharge. correct! This is a part of the Standard American Institute Hull Clauses (AIHC).
Chapter: Ocean Marine A shipping company has a fleet of small cargo ships. One of its ships ran aground and was seriously damaged. The insurance agreed the value of the ship was $800,000, but it would cost $870,000 to replace the ship. The insurer paid $800,000 for the ship. What coverage would be needed to pay this claim for the full amount needed to replace the ship? A Excess hull coverage B Increased value and excess liability clause C Paid total loss clause D Constructive total loss
B Increased value and excess liability clause Correct! The increased value and excess liability clause pays for the same loss covered under the underlying policy after its limit is paid in full. In this example, the underlying coverage would pay $800,000, and the increased value and excess liability clause would pay the additional $70,000 it will cost to replace the ship.
A company wants its cargo policy to provide coverage for losses caused by crew members. Which of the following is a clause that would NOT provide this type of coverage? A Dangerous drugs B Seaworthiness admitted C Theft, pilferage, and nondelivery D Malicious damage
B Seaworthiness admitted correct! The seaworthiness admitted clause guarantees the seaworthiness of the ship even though the owner or insured is not aware of the seaworthiness. It implies seaworthiness.
Chapter: Ocean Marine The American Institute warehouse-to-warehouse clause states A That coverage expires 90 days after discharge at destination port. B That coverage expires 15 days after discharge at destination port. C That coverage is in effect until the cargo reaches its destination. D That coverage is in effect until 60 days after discharge at the destination port.
B That coverage expires 15 days after discharge at destination port. correct! The American Institute warehouse to warehouse clause states that the coverage expires 15 days after discharge at the destination port (30 days if the cargo's destination is outside the limits of the port).
In Ocean Marine insurance, who pays all reasonable expenses if sue and labor is required to lessen a loss? A The crew B The insurer C The master D The assured
B The insurer Correct! In event of a loss or misfortune, the master and crew is required to sue and labor to prevent further loss and keep the loss as small as possible. The insurer will pay reasonable expenses in doing so. If the master and crew do not sue and labor to prevent further loss, the insurer could refuse to pay the claim.
Chapter: Ocean Marine In Ocean Marine insurance, who pays all reasonable expenses if sue and labor is required to lessen a loss? A The crew B The insurer C The master D The assured
B The insurer correct! In event of a loss or misfortune, the master and crew is required to sue and labor to prevent further loss and keep the loss as small as possible. The insurer will pay reasonable expenses in doing so. If the master and crew do not sue and labor to prevent further loss, the insurer could refuse to pay the claim.
Chapter: Ocean Marine In a marine policy, which of the following is referred to as the "amount insured hereunder"? A The duration of risk B The limit of insurance C The deductible D The agreed value
B The limit of insurance Correct! The limit of insurance is called the amount insured hereunder.
Institute Cargo Clause (A) covers which of the following losses? A Insolvency or financial default of the owners or operators of the vessel B Windstorm, lightning, hail C War, strikes, riots, and civil commotion D Ordinary leakage, ordinary loss in weight or volume, or ordinary wear and tear
B Windstorm, lightning, hail Correct! It covers all perils except: delay; inherent vice; willful misconduct of the insured; war, strikes, riots and civil commotion; use of any atomic or nuclear weapon; ordinary leakage, ordinary loss in weight or volume, or ordinary wear and tear; insufficiency or unsuitability of packing; the assured's knowledge of the unseaworthiness of the vessel or container at time of loading; insolvency or financial default of the owners or operators of the vessel.
Chapter: Ocean Marine If the ocean marine contract pays the ACV of the property just prior to the loss, it is A A demurrage contract. B A valued contract. C An indemnity contract. D A replacement cost contract.
C An indemnity contract. correct! The insured must not profit from the loss but instead be put back into the same financial condition as before the loss (normally ACV); this is considered an indemnity contract.
Chapter: Ocean Marine Containerships are used to transport A Break-bulk cargo. B Motor vehicles. C Containerized cargo. D Coal, grain, phosphates, and other "loose" cargo.
C Containerized cargo. Correct! Also called "box" ships, cargo is carried in 20 or 40 foot containers. This requires much less off-load and on-load time than break-bulk cargo.
Containerships are used to transport A Break-bulk cargo. B Motor vehicles. C Containerized cargo. D Coal, grain, phosphates, and other "loose" cargo.
C Containerized cargo. correct! Also called "box" ships, cargo is carried in 20 or 40 foot containers. This requires much less off-load and on-load time than break-bulk cargo.
The American Institute's Hull Clause for the Return of Premium will apply if a vessel has been laid up in port not under repair, and not used for storage. The premium will be returned for A The first 30 days only. B Each 10-day period. C Each 30-day period. D The first 10 days only.
C Each 30-day period. Correct! An American Institute Hull Clause (AIHC) standard condition states that the premium will be returned on a pro rata basis for each 30 consecutive day period laid up in port not under repair and not being used for storage or lighting.
The American Institute's Hull Clause for the Return of Premium will apply if a vessel has been laid up in port not under repair, and not used for storage. The premium will be returned for A The first 30 days only. B Each 10-day period. C Each 30-day period. D The first 10 days only.
C Each 30-day period. correct! An American Institute Hull Clause (AIHC) standard condition states that the premium will be returned on a pro rata basis for each 30 consecutive day period laid up in port not under repair and not being used for storage or lighting.
Provided that a loss did not result from negligence by the assured, the owners, or the managers of the vessel, additional perils are covered under the A Sue and labor clause. B Adventure clause. C Inchmaree clause. D General average and salvage clause.
C Inchmaree clause. Correct! Additional perils are covered, provided such loss or damage has not resulted from want of due diligence by the assured, the owners or managers of the vessel. This is commonly called the Inchmaree Clause.
Chapter: Ocean Marine Provided that a loss did not result from negligence by the assured, the owners, or the managers of the vessel, additional perils are covered under the A Sue and labor clause. B Adventure clause. C Inchmaree clause. D General average and salvage clause.
C Inchmaree clause. correct! Additional perils are covered, provided such loss or damage has not resulted from want of due diligence by the assured, the owners or managers of the vessel. This is commonly called the Inchmaree Clause.
Chapter: Ocean Marine An ocean marine hull policy will not pay any of the following EXCEPT A Loss or damage from nuclear weapon or by radioactive material B Costs for scraping and painting the underwater part of the vessel due to fouling C Legal liability for damage to another's ship the insured has run down D Losses caused by war or strikes
C Legal liability for damage to another's ship the insured has run down correct! According to the Standard American Institute Hull Clauses, an ocean marine hull policy will pay for legal liability for collision damage to another's ship. Such things as war, strikes, decay, deterioration, and inherent vice are not covered.
Bulk carriers are used to transport A Motor vehicles. B Containerized cargo. C Loose cargo. D Break-bulk cargo.
C Loose cargo. correct! Bulk carriers are used to carry coal, grain, phosphates, and other loose cargo. The ship itself is the container for the cargo.
Chapter: Ocean Marine A shipload of cement has been damaged by water and has become concrete. According to general cargo insurance terms in Ocean Marine policies, this is considered A Demurrage. B Sympathetic damage. C Loss of specie. D Adventure.
C Loss of specie. Correct! All property so damaged as to cease to be a thing of the kind insured is loss of specie and payable as a total loss.
The transit clause does which of the following? A Requires the owner of the vessel to pay additional premiums B Allows the coverage to remain in effect until the adventure is terminated C Names the points of the voyage D Allows the adventure to be terminated at other than the named destination provided prompt notice is given to the insurer
C Names the points of the voyage Correct! The transit clause names the points of the voyage. The termination of adventure clause allows the coverage to remain in effect when the adventure is terminated at other than the named destination provided prompt notice is given to the insurer and any required additional premium is paid.
Chapter: Ocean Marine The transit clause does which of the following? A Requires the owner of the vessel to pay additional premiums B Allows the coverage to remain in effect until the adventure is terminated C Names the points of the voyage D Allows the adventure to be terminated at other than the named destination provided prompt notice is given to the insurer
C Names the points of the voyage correct! The transit clause names the points of the voyage. The termination of adventure clause allows the coverage to remain in effect when the adventure is terminated at other than the named destination provided prompt notice is given to the insurer and any required additional premium is paid.
Chapter: Ocean Marine A company wants its cargo policy to provide coverage for losses caused by crew members. Which of the following is a clause that would NOT provide this type of coverage? A Malicious damage B Dangerous drugs C Seaworthiness admitted D Theft, pilferage, and nondelivery
C Seaworthiness admitted correct! The seaworthiness admitted clause guarantees the seaworthiness of the ship even though the owner or insured is not aware of the seaworthiness. It implies seaworthiness.
The American Institute warehouse-to-warehouse clause states A That coverage is in effect until 60 days after discharge at the destination port. B That coverage expires 90 days after discharge at destination port. C That coverage expires 15 days after discharge at destination port. D That coverage is in effect until the cargo reaches its destination.
C That coverage expires 15 days after discharge at destination port. Correct! The American Institute warehouse to warehouse clause states that the coverage expires 15 days after discharge at the destination port (30 days if the cargo's destination is outside the limits of the port).
The American Institute warehouse-to-warehouse clause states A That coverage is in effect until 60 days after discharge at the destination port. B That coverage expires 90 days after discharge at destination port. C That coverage expires 15 days after discharge at destination port. D That coverage is in effect until the cargo reaches its destination.
C That coverage expires 15 days after discharge at destination port. correct! The American Institute warehouse to warehouse clause states that the coverage expires 15 days after discharge at the destination port (30 days if the cargo's destination is outside the limits of the port).
Chapter: Ocean Marine Which clause provides coverage for the cargo while being transported to or from a vessel in another craft, raft, or lighter? A The transportation clause B The transit clause C The craft clause D The voyage clause
C The craft clause correct! The craft clause provides coverage for the cargo while being transported to or from the vessel in another craft, raft, or lighter.
In order for a Protection and Indemnity policy to cover a loss which of the following must be TRUE? A The insurer must conduct an investigation into the loss. B The loss must total. C The insured must be legally liable for the loss. D The insured must have been the person operating the vessel
C The insured must be legally liable for the loss. Correct! For the P&I policy to cover a loss, the insured must be legally liable for the loss. The vessel owner may be held liable for the actions of the master, officers, and crew of their ship.
If the underwriters direct a vessel to proceed to a particular port for repair, who pays the expenses, including wages and maintenance, of doing so? A The crew B The owners of the vessel C The insurer D The assured
C The insurer correct! If the underwriters direct the vessel to proceed to a particular port for repair, the insurer will pay the expenses of doing so, including wages and maintenance for the master, officers, and crew.
An ocean marine insurer has paid a total loss. Which of the following is true concerning salvage? A Salvage rights are decided in a court of law. B The assured has all rights to salvage. C The insurer has all rights to salvage. D The insurer and insured share salvage rights.
C The insurer has all rights to salvage. Correct! If a total loss is paid, the assured unconditionally abandons interest to the insurer. The insurer has the rights to salvage.
An ocean marine insurer has paid a total loss. Which of the following is true concerning salvage? A Salvage rights are decided in a court of law. B The assured has all rights to salvage. C The insurer has all rights to salvage. D The insurer and insured share salvage rights.
C The insurer has all rights to salvage. correct! If a total loss is paid, the assured unconditionally abandons interest to the insurer. The insurer has the rights to salvage.
Who has the rights to veto the repair facility for a vessel? A The owner B The assured C The underwriter D The captain
C The underwriter correct! According to standard hull policy conditions, the underwriter may veto repair facilities.
What is the purpose of increased value and excess liability (IVEL) clauses? A To protect the insurer from inflation B To protect the master and crew of a vessel from being sued C To provide extra coverage for the same losses covered by an underlining policy D To protect an assured from the errors and omissions of his or her insurance agent
C To provide extra coverage for the same losses covered by an underlining policy Correct! They provide excess coverage for the same losses covered by an underlining policy they are written to go with.
If cargo is damaged short of destination, Lloyd's agent at an intermediate port may agree to sell at best price, with settlement based on the difference between insured value and net proceeds of the sale. This is considered A Sue and labor. B A particular average. C A general average. D A salvage loss.
D A salvage loss. Correct! This is standard ocean marine terminology.
Ocean marine policies commonly refer to the person covered by the policy as the A Master. B Policy owner. C Inchmaree. D Assured.
D Assured. correct! Ocean marine policies commonly refer to the person covered by the policy as the assured. (From common ocean marine terms in use since 1689.)
General-cargo ships are used to transport A Motor vehicles. B Containerized cargo. C Coal, grain, phosphates, and other loose cargo. D Break-bulk cargo.
D Break-bulk cargo. correct! General cargo ships are generally used to carry break-bulk cargo. Break-bulk cargo is cargo that is too large to be carried in a container or boxed goods, or too small to justify use of a full container.
Chapter: Ocean Marine The American Institute's Hull Clause for the Return of Premium will apply if a vessel has been laid up in port not under repair, and not used for storage. The premium will be returned for A The first 10 days only. B The first 30 days only. C Each 10-day period. D Each 30-day period.
D Each 30-day period. Correct! An American Institute Hull Clause (AIHC) standard condition states that the premium will be returned on a pro rata basis for each 30 consecutive day period laid up in port not under repair and not being used for storage or lighting.
Chapter: Ocean Marine In accordance with American Institute Hull Clauses, a pro rata return of premium will be given for all the following reasons EXCEPT A For each period of 30 consecutive days the vessel may be laid up in port not under repairs. B In event of termination under the change of ownership clause. C If policy is cancelled by the underwriters. D If the policy is cancelled by the insured.
D If the policy is cancelled by the insured. Correct! If the policyholder cancels, a short rate refund is due.
The transit clause does which of the following? A Allows the adventure to be terminated at other than the named destination provided prompt notice is given to the insurer B Requires the owner of the vessel to pay additional premiums C Allows the coverage to remain in effect until the adventure is terminated D Names the points of the voyage
D Names the points of the voyage correct! The transit clause names the points of the voyage. The termination of adventure clause allows the coverage to remain in effect when the adventure is terminated at other than the named destination provided prompt notice is given to the insurer and any required additional premium is paid.
Which of the following losses is covered under an ocean marine policy? A War B Inherent vice C Decay D None of the above
D None of the above correct! Losses due to war, strikers, riot, civil commotion, decay, deterioration, and inherent vice are not covered.
Cargo has been insured warehouse to warehouse. Which of the following is true? A The cargo is covered from origin to destination or 30 days after discharge, whichever is first. B The cargo is covered from origin to destination or 90 days after discharge, whichever is first. C The cargo is always insured from origin to destination. D The cargo is covered from origin to destination or 60 days after discharge, whichever is first.
D The cargo is covered from origin to destination or 60 days after discharge, whichever is first. Correct! This is a standard institute cargo clause.
Cargo has been insured warehouse to warehouse. Which of the following is true? A The cargo is covered from origin to destination or 30 days after discharge, whichever is first. B The cargo is covered from origin to destination or 90 days after discharge, whichever is first. C The cargo is always insured from origin to destination. D The cargo is covered from origin to destination or 60 days after discharge, whichever is first.
D The cargo is covered from origin to destination or 60 days after discharge, whichever is first. correct! This is a standard institute cargo clause.
Chapter: Ocean Marine An ocean marine insurer has paid a total loss. Which of the following is true concerning salvage? A The insurer and insured share salvage rights. B Salvage rights are decided in a court of law. C The assured has all rights to salvage. D The insurer has all rights to salvage.
D The insurer has all rights to salvage. Correct! If a total loss is paid, the assured unconditionally abandons interest to the insurer. The insurer has the rights to salvage.
If a pilotage and towing firm is responsible for damage done to a vessel while the vessel is under its control, who is liable for the damage? A The vessel's assured B The insurer of the vessel C The vessel's owners or managers D The insurer of the pilotage and towing firm
D The insurer of the pilotage and towing firm Correct! If the pilotage or towing firm is responsible for the damage, the firm would be liable for paying for it.
Chapter: Ocean Marine Who has the rights to veto the repair facility for a vessel? A The captain B The owner C The assured D The underwriter
D The underwriter Correct! According to standard hull policy conditions, the underwriter may veto repair facilities.
Increased value and excess liability clauses work like which of the following policies? A Professional liability B Cargo C Errors and omissions D Umbrella
D Umbrella Correct! Increased value and excess liability (IVEL) clauses work like umbrella policies. They provide excess coverage for the same losses covered by an underlining policy they are written to go with. The underlining policy must pay up to its limit before the IVEL pays anything at all.
Chapter: Ocean Marine Increased value and excess liability clauses work like which of the following policies? A Professional liability B Cargo C Errors and omissions D Umbrella
D Umbrella correct! Increased value and excess liability (IVEL) clauses work like umbrella policies. They provide excess coverage for the same losses covered by an underlining policy they are written to go with. The underlining policy must pay up to its limit before the IVEL pays anything at all.
Institute Cargo Clause A covers all losses except those that are excluded. Which of the following excluded perils can be endorsed back onto the policy to provide coverage? A The ship captain was caught stealing cargo B The cargo was not packed to withstand extremes of weather and temperature C The ship is infested with spiders D War, strikes, riots, and civil commotion
D War, strikes, riots, and civil commotion Correct! For an addition premium, the policy may be endorsed to cover losses caused by war, strikes, riots, and civil commotion. Review Content
According to the principles of ocean marine insurance, an actual total loss may occur in all of the following situations EXCEPT A When all property has been destroyed. B With loss of specie. C When insured is irretrievable deprived of all property, even though not destroyed. D When cargo is misplaced.
D When cargo is misplaced. Correct! According to standard ocean marine definitions, an actual total loss may occur when any of the above happens, except for misplaced cargo.
