Ocean Marine Insurance

The Titanic hit an iceberg and was underwater within a day. Nothing was able to be recovered since the ship was now 200ft. below sea level. This is an example of what type of loss? ( )Constructive Total Loss ( )Accidental Total Loss ( )Actual Total Loss ( )Covered Total Loss

Actual Total Loss

What is the purpose of freight insurance? ( )Covers shipper fees ( )Covers loss to the cargo ( )Covers the insurable interest of the shipper due to jettison of the cargo ( )Covers the cargo until it reaches the warehouse

Covers shipper fees

What are the two risk categories of Ocean Marine Insurance as defined by the US Government? ( )Property and Liability ( )Cargo and Crew ( )Hull and Cargo ( )Imports and Exports

Imports and Exports

If the captain knows his ship is not seaworthy but proceeds to sail with his cargo, what impact does this have on his Ocean Marine Insurance? ( )Insurance will pay for repairs ( )It can void it ( )Hull coverage will stop but the rest of the coverage will remain ( )It will only cover cargo and not the ship

It can void it

Protection and indemnity coverage contained in an ocean marine policy covers which of the following: ( )Damage to another vessel caused by collision ( )Marine legal liability for damages caused by the ship ( )Loss of the shipper fees ( )Damage to the ship itself

Marine legal liability for damages caused by the ship

What are the two types of Marine Insurance? ( )Port Marine and Inland Marine ( )Ocean Marine and Liability Marine ( )Port Marine and Ocean Marine ( )Ocean Marine and Inland Marine

Ocean Marine and Inland Marine

Sam has a boat. He is out sailing one day and accidentally runs into another boat because of the strong winds. The other boat has $5,000 in damage. Where, under Sam's Ocean Marine policy would there be coverage for the other boat? ( )Running Down clause ( )Collision Coverage clause ( )Guest Boat clause ( )Comprehensive Coverage clause

Running Down clause Explanation: The "Running Down" clause covers collision damage to another vessel or its cargo.

In ocean marine insurance, which of the following is considered the most important implied warranty? ( )Legality ( )Condition of the cargo ( )No deviation in voyage ( )Seaworthiness

Seaworthiness

Which part of the ship does hull insurance apply to? ( )The hull and engine ( )The hull ( )The entire ship ( )The hull and deck

The entire ship

Ocean Marine is the oldest type of insurance. What did the original policies cover? ( )The profit ( )The crew ( )The ship ( )The cargo

The ship

Ocean Marine policies provide coverage for a number of unique perils. One of those perils is jettison, which is defined as: ( )Any perils to which property in transit by water is exposed ( )An illegal act committed willfully by the ship's master or crew for the purpose of damaging the ship or its cargo ( )A voluntary action to rid the ship of cargo to prevent further loss ( )A peril that only damages part of the cargo

A voluntary action to rid the ship of cargo to prevent further loss

How many ships can be insured on a single hull insurance policy? ( )2 ( )4 ( )1 ( )As many as you want

As many as you want

Which of the following situations would require Protection and Indemnity insurance to cover the damages? ( )The Sally Ann collides with an iceberg and rips a hole in its hull. ( )Stevedore Sam causes a refueling hazard that destroys the Titanic's on-deck cargo. ( )Captain Stan accidentally runs into another smaller ship crushing it during the early morning dense fog. ( )Handmade by Joe furniture manufacturer stops payment on its shipping invoice and Seaward Shipping Company loses $35,000 in shipping costs.

Captain Stan accidentally runs into another smaller ship crushing it during the early morning dense fog. Explanation: Protection and Indemnity Insurance coverage insures against liability for injuries to passengers, crew members, or persons on other ships. Stevedore Sam's incident would be covered under Cargo Insurance. Handmade by Joe's loss would be covered under Freight Insurance. The Sally Ann's loss would be covered under Hull Insurance.

A large ship named Bella hit an iceberg. The value of the ship is $12 Million. The cost to salvage the ship and bring it to port would be $8 Million and the cost to repair the ship once at the port would be $7 Million. What type of loss would Bella be considered? ( )Unrepairable Loss ( )Actual Total Loss ( )Constructive Total Loss ( )Partial Loss

Constructive Total Loss Explanation: Bella would be considered a Constructive Total Loss. This is where the cost to salvage and repair exceed the total value of the ship.

What is the difference between a Constructive Total Loss vs an Actual Total Loss? ( )The amount of building left to finish the ship ( )The dollar amount ( )The policy limits ( )Constructive Total Loss has salvage value

Constructive Total Loss has salvage value

On the way to Europe, heavy seas place a cargo ship in danger of sinking. The crew decides that if they dispose of the heavy cargo they are hauling, they won't sink. So, they toss overboard 5 Beetle cars owned by Volkswagen. The crates of glow sticks owned by Glow, Inc. and the crates of marshmallows owned by Rocky Mountain Marshmallows are still safe on board. When they get to Europe, Glow, Inc. and Rocky Mountain Marshmallows are asked to share in the loss that Volkswagen sustained. This is an example of which of the following: ( )Particular Average clause ( )Jettison ( )General Average clause ( )Barratry

General Average clause

The four major classes of marine insurance include all of the following EXCEPT: ( )Hull insurance ( )Liability insurance ( )Freight insurance ( )Cargo insurance

Liability insurance Explanation: Ocean marine insurance includes coverage for hull, cargo, protection and indemnity, and freight

Marine insurance covers property where? ( )On sea ( )On sea or docks ( )On land or sea ( )On sea, docks, or warehouses

On land or sea

A ship has experienced several losses. Which of the following losses will her hull insurance cover? ( )One of her propellers was destroyed when she hit an underwater reef ( )Anchored off shore, she lost a crewman who drowned during a quick swim ( )While docked in port, the galley and crew's quarters were infested with bugs ( )A container on board the ship that is full of furniture has rusted through and all of its contents are destroyed

One of her propellers was destroyed when she hit an underwater reef

In ocean marine insurance, which of the following is FALSE about the term "general average"? ( )The loss is shared by all interests involved in the voyage. ( )It involves a deliberate sacrifice of property. ( )It refers to a partial loss situation. ( )Only the party having an interest in the lost property suffers a loss.

Only the party having an interest in the lost property suffers a loss.