Chapter 2C - Marine

Question 1

Marine classes

Answer 1

Physical damage
Liability
‘other’
Onshore energy (same as in property)
Offshore energy

Question 2

Physical damage Insurance for vessels - types of policies

Answer 2

Construction - shipbuilder and eventual owner can both be covered

Physical damage to vessel - main LM wordings are named perils eg. Sea, fire, explosion

Collision liability- standard hull policy only covers 75% liability (3/4)

General average- someone makes sacrifice to save someone else and everyone chips in to pay them back

Salvage - reward for someone rescuing you when you are in trouble at sea

Sue and labour - insurer keen to minimise losses that might otherwise be claimed from the policy and will pay reasonable costs incurred in addition to any total loss user policy

Question 3

Cargo insurance- three levels of cover

Answer 3

A - All risks

C - named perils: fire, collision, general average, jettison, overturning, sinking, discharge at a port of distress

B- all above plus: earthquake/volcano/lightning, entry of sea water, total loss of any package overboard

Question 4

Cargo claims - what must the claims adjuster consider?

Answer 4

• where damage might have occurred
• if good were the responsibility or property of the insured at the time
• whether any exclusions may apply

Question 5

When looking for oil or gas other than physical damage what are the 3 main risks?

Answer 5

• A blowout where oil/gas comes to surface uncontrollably
• Costs of redrilling a well should that happen
• Any seepage, pollution, contamination costs

There is a policy which covers these three

Question 6

Main LM exploration policy covers..

Answer 6

Any well…

• being drilled or worked on until complete
• while producing (oil/gas coming out controlled)
• while shut in (May be closed temporarily if a problem occurs)
• while plugged or abandoned (stopped extracting)

Question 7

Three areas covered under exploration policy…

Answer 7

Control of well (COW)
Re-drilling
Seepage and contamination/pollution

Additional covers:

• making the well safe
• underground control of well
• removal of wreck
• care, custody and control

Question 8

LM Energy related CAR policy

Answer 8

Section 1:
Physical damage.
Removal of wreck.

Section 2:
Liability
Bodily injury or property damage arising out of project by law or because of contract

Expediting expenses can be added as policy extension

Question 9

What is operational cover for?

Answer 9

Business as usual once construction has been completed and project handed over

Question 10

Marine liability- shipowners liability

Answer 10

Many of these policies offered by Mutuals (P and I clubs)

Question 11

Risks covered by Marine Liability Insurers

Answer 11

Cargo
Crew
Collision
3rd Party Liability
Pollution
Wreck removal
Fines

Question 12

What does Maritime EL cover?

Answer 12

Employees who work in the marine world but would not be categorised as ships crew

Question 13

Professional negligence

Answer 13

Provided by specialist insurers which focus on certain professions only.
Surveyors, ship agents, ship brokers, naval architects, ship managers

Question 14

Ports liability insurance

Answer 14

Property insurance, public liability, employers liability

for vessels and personnel using water areas for which port authority is responsible liability needs careful consideration

Question 15

Loss of hire/earnings insurance

Answer 15

• works like BI
• pays out if ship damaged and can’t work
• other variations might pay out if ship has been seized and can’t be used. This could also trigger physical damage under war policy.

Question 16

Specie/jewellers block insurance

Answer 16

• physical damage and liability to trade of gems, metals, docs and jewellery
• good covered in vaults and in transit
• exclusions such as unattended vehicles, theft, fire etc

Question 17

Fine art insurance

Answer 17

• covers public and private collections museums and exhibitions
• covers dealers, restorers and other professions
• covers cost of repair and depreciation in value
• covers goods being moved around
• exclusions such as vermin, reframing, cyber

Question 18

Cash in transit

Answer 18

Money being moved between banks and ATM

Key element is security

Exclusions such as collusion, or use of key or combination

Question 19

Political risks insurance

Answer 19

• Confiscation, Expropriation, Deprivation of Assets insurance: insured may have complied with overseas regulations but assets seized etc
• insurance can cover costs incurred if a shipment which started out legal became illegal due to an embargo or sanction

Question 20

Contract frustration or trade credit insurance

Answer 20

Performance of contract is frustrated (cannot be fulfilled)

• cover for losses arising from unilateral of a contract for no legit reason
• used when counterparty is gov organisation. Trade credit insurance used when commercial organisation

Question 21

Bond risks insurance

Answer 21

• insurer may have to post bond to cover other party should they default on the contract
• other party may try to call bond outside terms of contract, banks require cover to be obtained in order to provide bond

Question 22

Overseas Motor insurance

Answer 22

To satisfy reporting requirements, split into:

EU/EAA (not UK)
USA and Canada
Rest of world

Can be written for both physical damage and liability

LM use delegated uw contacts to write risks on their behalf