Lesson 7: Marine Insurance Flashcards
1
Q
Marine Insurance Types
A
- Hull and Machinery Insurance
- Cargo Insurance
- Protection and Indemnity Insurance (P&I)
2
Q
How does the formation of contract works?
A
- Like a staircase, the broker goes with underwriters asking to insure their product, to be cover 100% (Insured Value). The one taking more risk is the lead underwriter.
3
Q
Marine Insurance Act 1906 vs. Insurance Act 2015
A
- IA partly repealed MIA
- Both apply general principles that apply in Marine Insurance
- MIA section 4: The assured has to have insurable interest, if not void
- Duty of Fair Presentation (IA): the insured must make a fair presentation of the risks to the insurer. Disclosure requieres
- Material circumstances: physical and moral hazards - The Duty of Utmost Good Faith (MIA): parties to reveal any information that may change the decision making
4
Q
Insurance Premium
A
- Amount of money the assured pays for an insurance policy.
- In Marine Insurance the premium the assured pays the premium for the amount coverage provided by the policy
5
Q
International Hull Clauses
A
- Losses from perils of the sea
- Fire and explosion
- Theft and Piracy
- Volcanic eruptions and lightning
- Accidents in loading and discharging
Second set of perils - Bursting of boilers
- Negligence of crew, repairers or charters
- Latent defects in machinery
6
Q
CENDOR MOPU
A
- Rule 7 MIA: refers only to fortuitous accidents, not include the ordinary actions of wind and waves.
- Loss is covered if there is an unexpected accident as an extraordinary result of the wind and waves. (extraordinary effect)
7
Q
Marine losses
A
- The loss has to be fortuitous (most not be inevitable or intentional)
- With absent fortuity, there is no valid loss under a marine insurance policy.
8
Q
Inchmaree Clause
A
- Covers damages for the negligence of the crew
9
Q
Protection and Indemnity P&I
A
- Provide third-party liability insurance
- P&I loss include: Cargo claims, personal injuries and loss of life, collision claims, pollution claims and wreck removals
- Paid to be paid Rule: The insured has to be held liable and pay the claim in other to have reimbursement.
10
Q
Letter of Undertaking
A
- Purpose: to ensure that the vessel is not arrested in port
- the P&I Club provides security for the debt of the shipowner
11
Q
Institute Cargo Clauses
A
Three set of clauses:
- A: all risks
- B: 9 risks
- C: 7 risks
12
Q
Scope of policy (Cargo)
A
- Cargo policies are voyage policies, deviation the risks does not attach.
- Principle of innocent cargo: Cargo owner can be unaware of the lack of seaworthiness
13
Q
Duration (Cargo
A
Clauses 1982: Warehouse to Warehouse
Clauses 2009: Shelf to Shelf
Exclusion: inherent vice, insufficient packaging and stowage
