Ocean Marine Insurance

In Ocean Marine Insurance, which of the following is considered the most important implied warranty? -Seaworthiness -Condition of the cargo -Legality -All of the above

A. All are very important warranties. Probably the most fundamental would be the seaworthiness of the vessel.

Although Ocean Marine Hull and Cargo coverages are usually written on an open peril basis, they exclude losses caused by inherent vice. The term "inherent vice" means: -The potential of property to self - destruct -Negligence by masters or members of the crew. -Losses caused by the dishonesty of crewmembers -Any loss resulting from illegal activities

A. Inherent vice, a term found in many property policies, refers to the potential of the property for self-destruct. Bananas will rot; furniture and clothing will eventually wear out.

Which of the following is not essential in determining if a salvage award is to be made? -Life-saving efforts -The property involved must be in peril from some hazard -The salvage service must be voluntary -The effort must be successful

A. No salvage award is involved solely for life-saving efforts.

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

B. Freight insurance is designed to cover the shipper's fees charged to the shipper. It is the indirect loss/business interruption coverage which comes into play AFTER a direct loss to the vessel.

What is meant by "break bulk" cargo? -Cargo shipped in a tanker ship -Cargo that is loosely packed such as ores -Loose cargo such as cartons -Containerization cargo

C. Break bulk cargo is loose cargo such as cartons stored directly in the ship's hold. Such cargo may be pallets.

In case of a loss, how many days notice does the insured have after notification of a claim to submit the claim to the underwriters of the Ocean Marine coverage? -90 days -60 days -180 days -30 days

C. If notice is not given within 180 days of an accident or occurrence being known to the insured, owners, or managers, no claim is recoverable.

Protection and Indemnity coverage contained in an Ocean Marine policy covers: -Guarantees the purpose of the voyage -Loss of the shipper fees -Marine legal liability for damages caused by the ship -Damage to another vessel caused by collision

C. Protection and Indemnity Coverage provides marine liability for damages caused by the ship (except for collision with another vessel, which is covered under Hull coverage)

In Ocean Marine insurance, what is the purpose of the IVEL clause? -To pay for the loss of shipper's fees -To require the insured to take all reasonable steps to protect the property from further loss -To provide excess hull and collision liability coverage -To cover bulk shipments

C. The purpose of the IVEL clause is to provide excess hull and collision liability coverage

In Ocean Marine insurance, the term "average" means: -The ACV of the ship -The annual premium for the insurance policy -Loss or damage -That coverage is written on a named peril basis

C. The term "average" in Ocean Marine insurance refers to loss or damage. Review in the chapter the difference between general and particular average

Protection and indemnity coverage contained in an Ocean Marine policy covers: -Liability against injuries to seamen -Injury to stevedores, longshoreman and harbor workers -Cargo, if lost or damaged through negligence -All of the above

D. Protection and Indemnity Coverage addresses all of these exposures under ocean marine coverage.