Exam 2: Inland Marine

Question 1

What does marine cover?

Answer 1

• Imports
• Exports
• Domestic Shipments
• Bridges, tunnels, piers, docks, pipelines, power lines, telephone lines, tv towers

Question 2

Difference between Ocean Marine and Inland Marine

Answer 2

Ocean Marine = Water

Inland Marine = Land

Question 3

Ocean Marine Exposures: Vessel Owner (Carrier)

Answer 3

1) Loss or Damage to Vessel
2) Loss of use to vessel (income loss)
3) Loss of Freight (compensation)
4) Liability for damage to cargo
5) Liability for damage to other vessels
6) Injury to crew or passengers
7) Oil Spills

Question 4

Ocean Marine Exposures: Cargo Owner (Shipper)

Answer 4

1) Loss or damage to cargo

2) Loss of guaranteed freight

Question 5

Cargo Insurance

Answer 5

• Voyage Insurance

- Open Cargo

Question 6

Voyage Insurance

Answer 6

Single Trip

Question 7

Open Cargo

Answer 7

• Covers all goods shipped and received during the policy period
• Premium is paid periodically based on reported shipping amounts

Question 8

Voyage Insurance Valuation

Answer 8

Can be specific or agreed value

Question 9

Open Cargo Valuation

Answer 9

Covers all goods

• amount of invoice plus freight, plus percentage to cover additional expenses (usually 10%)
• Invoice does not capture actual cost only sold for - moral hazard

Question 10

Warehouse to Warehouse Clause

Answer 10

• Many importers’ and exporters’ goods are not only exposed to exposure at sea
• Covers additional transit (including inland)
• Coverage also expanded to include delays caused by: natural disasters, civil authority, and strikes of port workers

Question 11

Covered Causes

Answer 11

• Written on all risk basis
• Exclusions include war, strikes, civil commotion
• Can cover those exclusions with an endorsement

Question 12

Sue and Labor Clause

Answer 12

• Insured must take reasonable measures to protect the property; costs of those measures will be covered by insurer

Question 13

General Average Charges

Answer 13

• Sharing of all losses by all parties to a venture

- Ship cargo is jettisoned to salvage the trip

Question 14

What does maritime law dictate with General Average Charges

Answer 14

Ship owner and all parties share in that loss with the property owner that suffers loss

Question 15

Who incurs expenses to salvage property under General Average Charges

Answer 15

Ship owner

Question 16

Hull Insurance

Answer 16

• Covers physical damage to vessel and or its structure
• Covers machinery, boilers, and fuel supplies
• Excludes cargo on ship
• Can be written on a voyage basis or a time basis

Question 17

Covered Causes of Loss

Answer 17

Specific Perils
Perils of the Sea:
- high winds, rough seas, collisons with other vehicles, and pirates
- Fire, lightning, and earthquake
- Barratry: misconduct of crew that is against the ship owner’s interest

Question 18

Hull Insurance Valuation

Answer 18

Typically on an agreed value bassis

Question 19

Collision Liability Clause

Answer 19

Collision damage to other vessels and their cargo

Question 20

What is not covered under Collision Liability Clause

Answer 20

Does not cover:

1) Liability for bodily injury
2) does not cover collisions other than ships and their cargo

Question 21

Protection and Indemnity

Answer 21

Liability for claims arising out of operations of a vessel

• Damage to bridges, piers, and other water way structures
• Injury to passengers, crew, and others on the ship
• Injury to people on other ships
• Damage to cargo of others on the vessel