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Marine Insurance
Stack #35168
| Question | Answer | misc info |
|---|---|---|
| what is the oldest thype of insurance in the world? | ocean marine | |
| how did Lloyds of London begin? | Edward Lloyd opened a coffee house in London in 1869 and it became a meeting place for people buying and selling insurance. | |
| What does Lloyd's list provide? | name, position, destination and other important data of every mechant ship in free world? | |
| when were most Ocean Marine policies adopted by Lloyd's | around 1870 with little change since. forms are full of archaic terms but have proved reliable in courts and Lloyds is reluctant to make changes. | |
| how are Lloyd's forms brought up to date | by adding printed institute clauses to them. | |
| adventure | trip or voyage | |
| assured | insured | |
| average | loss | |
| constructive total loss | means expense to repair/recover exceeding value or policy limit. | |
| demurrage | delay of vessel beyond normal time to on-load or off-load or a charge for the delay | |
| laid up | means in port or at anchor | |
| loss of specie | means subject matter ceases to be a thing of the kind insured | |
| misfortune | is an accident or occurrence | |
| particular | means partial | |
| touching | means applying to | |
| what are the several implied warranties in the Ocean Marine policies? | (not actually written) seaworthiness, legality, & no deviation in voyage. | |
| seaworthiness | ship must be fit for voyage and not overloaded the master & crew must be competent & cargo must be sound and properly packed | |
| legality | everything must be lawful and not involve contraband, smuggling, or any other illegal activity | |
| no deviation in voyage- | voyage must follow an agreed route without unnecessary delays. prudent changes to avoid loss & humanitarian deviations will not affect the coverage. | |
| 4 major types of Ocean Marine policies: | hull for physical damage/loss of ship itself; cargo for what shp is hauling; freight for loss of revenue if ship owner cannot deliver cargo; & protection & indemnity (P&I) for liability. | |
| assured | insured | |
| hull coverage agreed value | are written on an agreed value basis; insured and insurer agree upon the value of ship at time contract made. in event of total loss, this amt is paid. | |
| deductible for hull coverage: | any deductible applying will be expres as a dollar amt in policy. | |
| how will premium be returned on hull coverage | be returned on pro rata basis upon change of ownership of vessel. premium will also be returned on pro rata basis for each 30 consecutive days period laid up in port not under repair and not used for storage/lighting. insurer cancels-prorata refund; | |
| if hull coverage is cancelled by assured, | short rate refund is due. | |
| an adventure | trip or voyage | |
| what perils do hull policies cover? | losses covered by perils of fire, lighting, earthquake, assailing thieves, jettison, barratry of master & mariners & all other perils come to hurt, detriment/damage of vessel. | |
| what additional perils are also covered in hull coverage? | accidents in loading/discharging/handling cargo/bunkering; accidents in going on or off while in dry docks, graving docks, ways, gridirons/pontoons, explosions on or off ship; breakdown of motor generators/other electrical machinery/bursting boilers; | |
| what additional perils are also covered provided no such loss or damage has not resulted from want of dilligence by assured | owners or managers of vessel | commonly called the Inchmaree Clause |
| what does the Inchmaree clause cover? | accidents in loading, discharging, or handling carog, or in bunkering; accidents in going on or off, while on dry docks, graving docks, ways gridirons or pontoons; explosions on shipboard or elsewhere; | breakdown of motor generators or other electrical machinery, bursting of boilers, breakihng of shafts, or any latent defect in machinery or hull; breakdown of or accident to nuclear installations/reactors not on board vessel insured; |
| additional perils covered under Inchmaree Clause | contacft with aircraft, rockets or similar missiles or with any land conveyance, negligence of charterers & or repairers and negligence of masters, officers, crew/pilots. | (blank) |
| how much notice must be provided in event of an accident or occurrence which could lead to claim | prompt notice must be given to underwriters | (blank) |
| what rights due underwriters have to decide regarding repair? | where vessel shall proceed for repair; and have right to veto any repair firm proposed. | (blank) |
| who can the underwriters appoint to determine extent of damage? | right to appoint their own surveyor to determine extent of damages. | (blank) |
| who will the insurer pay if the underwriters direct the vessel proceed to a particular port for repair? | insurer will pay expenses of doing so including wages and maintenance for master, officers, & crew. | (blank) |
| what will also be paid for the master, officers, and crew during any trip to test repairs/ | maintenance and wages will also be paid for hte master, officers, and crew. | (blank) |
| when will maintenance and wages be paid? | only when the vessel is underway. | (blank) |
| does the policy for scraping and painting the bottom? | in no case will the policy pay. | (blank) |
| will the expenses be paid new for old without deduction even if no damages are found for sitting at bottom after stranding? | yes | (blank) |
| will any equipment be covered? | insurer will also pay for loss or damage to equipment not owned by assured but installed for use on board the vessel and for which the assured has assumed responsibilty. | (blank) |
| AVERAGE | means loss or damage | (blank) |
| general average | is some sort of loss which all association with voage help pay for. | (blank) |
| particular average | is loss or damage that only the particular people involbved in a loss help pay for. | (blank) |
| what is paid in the event of a total loss? | agreed value | (blank) |
| what two ways can total loss occur? | actual total loss in which all property is destroyed or insured is deprived of all proeprty even though not destroyed; & constructive total loss in which cost to repair/replace exceeds policy limit. | (blank) |
| if total loss is paid, what does the insured do with their interest? | insured unconditionally abandons their interest to insurer. | (blank) |
| who has rights to salvage? | insurer has rights of salvage. | (blank) |
| what are the master & crews required to do in the event of loss or misfortune? | master and crew are required to sue and labor to prevent further loss & keep loss as small as possible. | insurer will pay reasonable expenses in doing so. |
| if the master and crew do not sue and labor to prevent further loss: | insurer could refuse to pay the claim. | (blank) |
| collission liability? | collision clause of Hull policy is actually a type of liability coverage since it pays for damage to another's ship the assured's ship has collided with. Of course, assured must have been at fault. | (blank) |
| limitations of liability | while most Ocean Marine insurance is written on all=risk basis, its intent is to cover the perils of the sea; losses due to war, strikers, civil commotion, decay, deterioration & inherent vice are not covered. | (blank) |
| pilotage and towing services | used in areas of world there exists narrow waters (ports, straits,etc) so as to complete the voyage in a timely manner. | insurance coverage remains in effect while vessel is under two or control of specially qualified pilot in areas where pilotage and towage are common practices. |
| who would be liable for paying for damages if caused by pilotage or towing firm? | they would be reponsible for damage and liable for paying. | (blank) |
| when does coverage terminate if ship sold? | coverage automatically terminates at time or if teh ship is at sea, upon arrival at final port. | in event of involuntary temporary transfer, automatic termination wil be 15 days after such transfer. |
| additional insurances | other insurance is not allowed except to cover perils excluded by policy or to cover the difference between teh amount insured hereunder & agreed value. | (blank) |
| does hull policy cover war, strikes & related exclusions? | losses caused by war, strikes & related actions not covered by hull policy. | (blank) |
| what are cargo coverage characteristics and purpose? | cargo policies are written to cover loss or damage to cargo. owner of cargo certifies that cargo is suitable for shipment. amt of premium will be partly determined by packing method used and partly by type of ship providing transportation. | (blank) |
| what are the types of cargo losses? | total loss, actual total loss versus constructive total loss | (blank) |
| actual total loss-cargo coverage | is damage to entire property | (blank) |
| constructive total loss-cargo coverage | is when cost to repair or recover exceeds the policy limit and the insurer pays the policy's agreed value. | (blank) |
| when does an actual loss occur (cargo coverage)> | when all property has been destroyed, when there is loss of specie, or if an inured is irretrivably deprived of all property, even if not totally destroyed. | l |
| what is loss of specie? | when all property is damaged as to cease to be a thing of the kind insured. | (blank) |
| a loss of specie is payable as? | total loss. | (blank) |
| parital loss could be either: | particular average in which only those involved in loss are affected or general average in which all those involved in voyage share in loss. | (blank) |
| what are the master and crew required to do in event of loss (cargo coverage) | to sue and labor to protect insured property from further loss. policy will pay cost of doing so. | (blank) |
| what happens if crew does not sue or labor to keep losses as small as possible (cargo coverage) | insurer could refuse to pay for loss. | (blank) |
| when may an agent of an insured agree to sell cargo at best price? | if cargo is damaged short of destination port. | (blank) |
| how will settlement value be determined if insurer sells cargo? | settlement will be based on difference between insured value & net proceeds of sale | (blank) |
| what is a salvage loss? | difference between insured value & net proceeds of sale. | (blank) |
| what is protection & liabitlity insurance under an Ocean Marine policy? | essentially liabiltiy insurance that protects owner of ship from consequenes of his negligent acts or negligent acts of his agent. | (blank) |
| when would the PI coverage under cargo policy provide protection against financial losses by paying those sums that insured became legally liable to pay as damages | if owner is held legally liable for damages to third party. | (blank) |
| What does PI coverage provide? | indemnifies the insured by paying those sums the insured becomes legallyobligatged to pay as damages under maritime law. | (blank) |
| when will a P&I policy cover loss (liability for vessel owner) | when the insured is legally liable for loss. vessel owner may be held liable for the actions of master, officers, & crew of their ship. | (blank) |
| what common covered losses are there for protection and indemnity insurance? | PI insures shp owner against liability to seamen for injureis resulting in unseaworthiness of vessel & other negligent acts; to stevedores (laborer who load /unload vessels in port), longshoreman, and habor workers; for cargo lost/damaged by negligence; | for damage to other property including fixed objects; and for damage to other vessels not caused by collission |
| what is excluded under protection and indemnity insurance | losses caused by insured's intention acts | (blank) |
| when does P&I coverage provide marine liability coverage for thei ship owner | in event that they are sued for negligence. | under Jones Act, seamen covered for their injuries while working on ship. law allows seamen may also sue ship owner for negligence & general damages as a result of such injuries caused by negligence. |
| when would coverage PI apply? | to suits against ship owner arising from injuries to longshoremen and harobor workers, loss of cargo caused by negligence, and damages to other vessels caused by collision if insured's ship negligent. | (blank) |
| how may the Protection & Indemnity Coverage be written? | written with other maritime coverage or may be written as standalone policy. | (blank) |
Created by:
jsl122171