CHAPTER 2 - C Flashcards
What are the main marine classes of business?
Physical damage, liability, and other
Offshore energy is included as a distinct category.
What types of objects can be insured for physical damage in marine insurance?
Ships, cargos, and oil rigs.
What is the coverage provided under the standard construction all risks policy for vessels?
- All risks of physical loss or damage
- Collision liabilities and marine liability
- War
- Strikes, terrorism, malicious acts, and political motives
What are the named perils covered under physical damage insurance for vessels?
- Perils of the seas
- Fire
- Explosion
- Violent theft from outside
- Jettison
- Piracy
- Breakdown or accident to nuclear reactors
- Contact with aircraft or objects
- Earthquake, volcano, or lightning
What are examples of claims that can arise under a construction or builder’s risks policy?
Fires in the shipyard during vessel construction.
What is ‘General Average’ in maritime law?
A principle where if someone incurs costs to save others, everyone contributes to pay them back.
What does ‘sue and labour’ refer to in marine insurance?
Insurers pay reasonable costs incurred to avert or minimize losses.
What exclusions are common in cargo insurance policies?
- Wilful misconduct of the insured
- Inherent vice
- Insufficiency of packing
- Delay
- Insolvency or financial default
- Use of atomic weapons
- Unseaworthiness of the vessel
- War
- Strikes/terrorism
- Radioactive contamination
What is the focus of offshore energy insurance?
Insurance for the exploration and extraction of natural resources like oil and gas.
What does ‘Control of Well’ (COW) coverage entail?
Covers costs to regain control of a well that is out of control.
What are the three main risks insured in offshore energy exploration?
- Blowout
- Costs of re-drilling
- Seepage, pollution, and contamination costs
What does re-drilling cover in offshore energy insurance?
Costs of creating a new well, generally to the point it was before the incident.
Fill in the blank: The hull insurer covers a ship’s share of any reward for __________.
salvage.
True or False: Cargo insurance provides liability cover for damage caused by cargo to the container or vehicle.
False.
What types of vessels can be insured under marine physical damage insurance?
Commercial and privately owned vessels powered by various engines or sails.
What is the difference between named perils and all risks hull insurance policies?
Named perils specify certain covered events, while all risks cover all unless excluded.
What is the significance of ensuring values at risk are kept up-to-date under a construction policy?
To avoid underinsurance during the construction period.
What are the exclusions within the standard market hull wording?
- War
- Strikes and terrorism
- Malicious damage
- Radioactive contamination
What does ‘seepage and contamination/pollution’ coverage address?
Covers costs for remedial measures and damages for bodily injury or property loss caused by pollution.
What does the term ‘barratry’ refer to in marine insurance?
When the master and crew turn against the owner and steal the ship or cargo.
What is required for additional coverage for underground control of well?
Covers scenarios where oil/gas escapes into the rock rather than bursting out of the well.
What does the term ‘spudding’ refer to in offshore energy exploration?
The process of starting the drilling of a well.
What does the insured need to do under a wreck removal requirement?
Remove the wreck and cover reasonable costs
This may be a contractual requirement.
What is covered under care, custody, and control?
Loss of rented equipment or equipment in the insured’s care
This coverage applies even if the equipment is not owned by the insured.
