Marine *Unit 12* Quiz

Describe an Annual Transit policy.

*A. All of the answers are correct B. Coverage is available on a named perils or "all risks" basis C. It protects the shipper or receiver of goods against loss to goods in transit. D. It is an uncontrolled form

Describe a bailees customer's policy.

A bailee may purchase a bailees customers policy, which reimburses the insured for damage to customer's property in his or her care, whether or not the insured is liable for the damage, provided damage resulted from a peril insured against.

What coverage is provided by the mail coverage form?

A controlled form which is also a type of transportation form. It provides "all risks" coverage against loss to property sent by registered mail, first class mail, certified mail or express mail. A separate non-filed parcel post policy covers mail sent by parcel post. Coverage is issued in a reporting basis wherein the insured reports values of shipments, with separate limits for first class and certified mail, U.S. postal express mail, and registered mail.

What is meant by the terms "controlled" or "uncontrolled" in inland marine insurance?

A controlled line is one wherein a standard provisions form is promulgated by a bureau and filed for uniform use. An uncontrolled inland marine line is one wherein the individual insurer may use its own form and vary it for the individual risk.

Describe domestic shipments in a commercial marine insurance policy?

A wide variety of inland marine transportation forms are designed to provide coverage for domestic shipments, whether they travel by truck, train, air or even mail. Businesses that ship or receive merchandise need coverage against loss to their cargoes while they are in transit.

Describe Valuable Papers coverage

A. "All Risk" coverage B. Reimburses the insured for the cost of replacing damaged manuscripts, films, maps, drawings, deeds, books, or other printed, inscribed or written documents other than money or securities. C. Covers research as well as actual production costs. *D. All of the answers are correct

Describe Valuable Papers coverage.

A. "All Risk" coverage B. Reimburses the insured for the cost of replacing damaged manuscripts, films, maps, drawings, deeds, books, or other printed, inscribed or written documents other than money or securities. C. Covers research as well as actual production costs. *D. All of the answers are correct

Which of the following would describe a "bailment"?

A. A dry cleaner *B. All of the answers are correct Correct C. A fur storage facility D. A warehouse storage facility

Describe a Contractors Equipment floater.

A. Covers heavy machinery, equipment and tools B. Coverage is provided at the job site, on the way to and from a job site, and while the equipment is temporarily stored. *C. All of the answers are correct Correct D. An uncontrolled form

What coverages are included in the Electronic Data Processing coverage?

A. Data and media or software B. Extra expense to cover abnormal expenses of operating following covered damage *C. All of the answers are correct D. Equipment or hardware

Which perils are frequently included in Ocean Marine Insurance?

A. Fire (either direct or consequential losses) *B. All of the answers are correct Correct C. Perils of the Sea (interpreted to include wind, waves, collision, stranding, sinking and other such accidents) D. War (to include war, an endorsement referred to as "free capture and seizure clause)

All of the following are covered by Mail Coverage (Inland Marine Form) except:

A. First Class Mail B. Express Mail C. Registered Mail *D. Parcel Post Correct

Describe an Installment Sales floater.

A. If written for the seller's interest only the form pays off the unpaid balance following a loss B. If written for both buyer and seller, the full value of the insured items is paid *C. All of the answers are correct D. Covers property sold on an installment basis.

Describe an Installment Sales floater

A. If written for the seller's interest only the form pays off the unpaid balance following a loss B. If written for both buyer and seller, the full value of the insured items is paid *C. All of the answers are correct Correct D. Covers property sold on an installment basis.

What are the characteristics, which make coverages eligible for Inland Marine Insurance?

A. None of the answers are correct B. Inland Marine forms do not cover such stationary property as real estate, furniture, fixtures, or merchandise. C. A wide variety of seemingly unrelated risks such as an element of portability Incorrect *D. Both of the answers are correct

Which of the following is one of the six categories of risks in the Nationwide Definition of Inland Marine Insurance?

A. Personal Property Floater Risks and Commercial Property Floater Risks *B. All of the answers are correct C. Instrumentalities of Transportation or Communication D. Imports, Exports and Domestic Shipments

Describe Accounts Receivable coverage

A. Reimburses the insured for amounts which can't be collected from customers due to covered damage to the accounts receivable records *B. All of the answers are correct C. "All Risk" coverage D. Covers extra collection expenses, costs to reestablish records and interest on any loans the insured must obtain to stay in business while collections are impaired.

Describe Accounts Receivable coverage.

A. Reimburses the insured for amounts which can't be collected from customers due to covered damage to the accounts receivable records *B. All of the answers are correct C. "All Risk" coverage D. Covers extra collection expenses, costs to reestablish records and interest on any loans the insured must obtain to stay in business while collections are impaired.

Describe a Bailees Customers policy.

A. Whether or not the insured is liable for the damage *B. All of the answers are correct C. Provided damage resulted from a peril insured against D. Reimburses the insured for damage to customer's property in his or her care

When is a motor truck cargo policy used?

An uncontrolled form designed to protect the carrier, instead of the shipper. There are only a few things, such as an act of God (flood, tornado, etc.) or the shipper's own neglect (poor packing, etc.), for which the carrier is not liable. This form provides protection for the carrier's broad liability, insuring against loss to cargo belonging to others (the shipper) for which the carrier is liable.

A company shipping numerous shipments by independent carrier during the year would need what kind of policy?

Annual transit policy

What can be covered by the instrumentalities of transportation and communication form?

Bridges, tunnels, oil pipelines, dams, piers, docks, radio and TV towers can be covered under uncontrolled forms. While this property itself in not portable, it does have a direct connection with transportation and is subject to many of the same perils as property in transit. Coverage is for both direct damage and loss of revenues caused by damage.

Which shipping term describes a buyer purchasing his own insurance?

C.F. - Cost and Freight

Which shipping term describes a seller assuming responsibility for securing all necessary insurance?

C.I.F - Cost, Insurance and Freight

Who may be covered under a "bailees form"?

Cleaners, dyers and laundries; furriers, and warehouse owners.

What is Hull coverage in Ocean Marine Insurance?

Coverage for loss of or damage to the vessel for perils of fire, lightning, earthquake, assailing thieves, "perils of the seas", jettisons, barratry of the master or mariners and "all other like perils."

Define Liability coverage in Ocean Marine Insurance

Covers the risk that the ship will collide with another vessel.

Define Liability coverage in Ocean Marine Insurance.

Covers the risk that the ship will collide with another vessel.

What are the specific controlled coverage forms for inland marine insurance policies?

Each of the following forms provide the very broad "all risk" coverage typical of inland marine coverages: accounts receivable, camera and musical instrument dealers; commercial articles; equipment dealers; film; jewelers block; mail coverage; physicians and surgeons equipment; signs; theatrical property; and valuable papers and records.

Which shipping term describes a seller assuming cost and risk until the goods are delivered along side an overseas vessel and within reach of its loading tackle?

F.A.S. - Free Along side

Which shipping term describes a buyer assuming responsibility for the cargo after the goods reach the designated point?

F.O.B - Free on Board

T & L Enterprises ships ceramic tile in cartons on the deck of a commercial ship from the manufacturer in Spain to their distribution plant in Ft. Lauderdale. During a shipment, the ship starts to sink. Heavy barrels of oil are jettisoned by the master of the ship to keep the ship from sinking. Which clause would cover T & L Enterprises for their contribution to the loss of the barrels of oil?

General Average clause

What is considered the function of inland marine insurance?

Generally considered to be covering property; in transit or subject to transit, land mobile equipment (but not licensed highway equipment), an "instrumentalities of transportation and communication" (bridges, tunnels, radio and TV towers, aerial navigation beacons, dams, piers and docks, pipelines and power transmission lines).

Which of the six categories of the Nationwide Definition of inland marine insurance are the subject of marine insurance, commercial inland marine forms, and personal inland marine policies?

Imports and exports are the subject of marine insurance; domestic shipments, instrumentalities of transportation or communication represent risks eligible for commercial inland marine forms; and the personal property floater risk category is provided by the personal inland marine policies.

What three forms are required when the commercial inland marine coverage part is written as part of a CPP?

In addition to common policy declarations and the common policy conditions the following must be included; commercial inland marine declarations form; commercial inland marine general conditions form and one or more of a specific group of controlled coverage forms.

How was Inland Marine insurance developed?

Inland Marine insurance was first as an extension of Ocean Marine coverage to provide coverage for cargo traveling over land instead of by sea.

Joe Brown is awarded a contract to install an air conditioning system at the premises of a local bar owned by Jim Smith. During the time work is being done, a major fire occurs overnight and destroys $50,000 worth of the Joe Brown's property located at Jim Smith's bar. This loss is best covered by a (n):

Installation Floater

When is an annual transit policy used?

It is an uncontrolled form that protects the shipper or receiver of goods against loss to goods in transit. Coverage is available on a named perils basis or "all risk" basis.

When is a trip transit policy used?

It is an uncontrolled form very similar to the annual transit policy. However, it is used to insure single shipments of goods for companies who have only occasional shipments to insure. Coverage extends from the time and point of origination to the time and point of destination.

n terms of perils, how are the uncontrolled lines of inland marine insurance policies written?

May be written on an "all risk" or named peril basis.

A carrier providing shipping for others would need what kind of a policy?

Motor truck cargo policy

What is meant by "Controlled" coverages?

One wherein a standard provisions form is promulgated by a bureau and filed for uniform use.

What is Freight coverage in Ocean Marine Insurance?

Provides protection for the vessel owner in the event freight charges are not paid

Stan is driving his yacht when he runs into another boat doing $30,000 of damage to the other boat. Where would Stan have coverage for the other boat under his ocean marine policy?

Running Down clause

W & P Enterprises ships ceramic tile in cartons on the deck of a commercial ship from the manufacturer in Spain to their distribution plant in Ft. Lauderdale. During a shipment, the ship starts to sink. Rather than try to off load the ceramic tile to another ship standing by, W & P Enterprises allows the tile cartons to sink knowing their insurance will cover their loss. Which clause would their insurer use to deny the claim?

Sue & Labor clause

Define Cargo coverage in Ocean Marine Insurance.

The coverage for loss or damage to goods

Name the six categories of risks in the Nationwide Definition of inland marine insurance?

The six categories are: Imports; Exports; Domestic Shipments; Instrumentalities of Transportation or Communication; Personal Property Floater Risks; and Commercial Property Floater Risks.

What are the "uncontrolled" forms for inland marine insurance policies?

There are an endless variety of uncontrolled marine forms. Some of the more widely used include: annual transit, trip transit, motor truck cargo, instrumentalities of transportation or communication (bridges, tunnels, piers etc., bailees customers (cleaners, dyers and laundries, furriers etc.), furriers customers, contractor's equipment, installation, installment sales, electronic data processing equipment, and dealers (furriers block, art, coin and stamp).

Describe the contractor's equipment floater.

This form is uncontrolled and covers the heavy machinery, equipment and tools a contractor needs to conduct business. Contractor's equipment needs to be protected while on the job site, on the way to and from a job site, and while equipment is temporarily stored. Coverage is provided on a named perils or "all risk " basis. Tools, machinery and equipment owned, rented or borrowed by the insured can be covered.

Describe electrical data processing Insurance (EDP).

This form provides a package of coverages including: (1) Property coverage for equipment ("hardware"), data and media (recorded information and the software on which it is recorded). Coverage is also provided for extra expense to cover abnormal expenses of operating following covered damage, and business interruption to cover losses resulting from having to shut down operations because of covered damage; and (2) Liability insurance, which covers the insured's liability arising from handling and storing data for other firms (data processing service firms).

What is the Nationwide Definition of Inland Marine insurance?

To help identify the kinds of risks, which are eligible for either Ocean or Inland Marine insurance, the industry developed a Nationwide Definition, which is a list of six categories of eligible Marine risks.

A company shipping two shipments by independent carrier during the year would need what type of policy?

Trip transit policy