CMI CMI Marine Insurance & Casualty Assessment 2 — Questions and Answers
Question 1: What is the primary function of a marine surveyor retained by an insurer after a casualty?
- To assess the nature and extent of damage and determine the cause for insurance purposes (Correct answer)
- To serve as the vessel's classification society representative during repairs
- To negotiate the salvage award on behalf of the insurer
- To re-flag the vessel under a more favorable jurisdiction
Correct answer: To assess the nature and extent of damage and determine the cause for insurance purposes
An insurance surveyor evaluates the damage, establishes the circumstances and cause of loss, and provides the insurer with a technical basis for evaluating the claim.
Question 2: In marine casualty assessment, 'proximate cause' is best defined as:
- The dominant, effective cause of a loss without which the loss would not have occurred (Correct answer)
- The most geographically nearby contributing factor to a casualty
- The first event in a chain of causation regardless of its relative importance
- A term used exclusively in US admiralty court proceedings
Correct answer: The dominant, effective cause of a loss without which the loss would not have occurred
Proximate cause is the legally operative cause — the efficient cause that sets other events in motion and directly produces the loss.
Question 3: Under US maritime law, the concept of 'seaworthiness' for insurance purposes means that:
- The vessel must be reasonably fit for the intended voyage at the time it commences (Correct answer)
- The vessel must hold a current Coast Guard Certificate of Inspection at all times
- The vessel must be able to survive any foreseeable weather condition during the policy period
- The vessel must pass an annual dry-dock survey with no deficiencies noted
Correct answer: The vessel must be reasonably fit for the intended voyage at the time it commences
Seaworthiness requires that the vessel, crew, equipment, and cargo preparation be reasonably adequate for the particular voyage undertaken at its start.
Question 4: A CMI investigator finds that a vessel owner deliberately scuttled the vessel to collect insurance proceeds. This act is classified as:
- Marine insurance fraud, which voids the policy and may result in criminal prosecution (Correct answer)
- A constructive total loss eligible for full policy settlement under US law
- An acceptable business decision if the vessel's market value exceeded the insured value
- A general average act shared proportionally among all interested parties
Correct answer: Marine insurance fraud, which voids the policy and may result in criminal prosecution
Scuttling to collect insurance is a criminal act of fraud that voids coverage and can result in federal charges under the US Mail Fraud and insurance fraud statutes.
Question 5: Which of the following best describes a 'general average' contribution in maritime law?
- A voluntary sacrifice or expenditure made for the common safety of the ship and cargo, shared by all interests (Correct answer)
- The total average cost of vessel repairs following any accidental casualty
- A penalty assessed equally against all crew members after a major casualty
- A standard depreciation formula applied to vessel hull value after a loss
Correct answer: A voluntary sacrifice or expenditure made for the common safety of the ship and cargo, shared by all interests
Under the York-Antwerp Rules, general average requires all parties whose property was saved by a voluntary sacrifice to share proportionally in that loss.
Question 6: In evaluating a marine casualty for insurance purposes, a CMI investigator should review the vessel's class survey records primarily to:
- Identify pre-existing deficiencies or deferred maintenance that may have contributed to the loss (Correct answer)
- Confirm that the vessel's flag state registration was current at the time of the incident
- Verify that all crew members completed mandatory safety drills before departure
- Determine the vessel's maximum cargo capacity under load line regulations
Correct answer: Identify pre-existing deficiencies or deferred maintenance that may have contributed to the loss
Class survey records reveal the vessel's maintenance history and any outstanding conditions of class, which may establish whether a defect pre-dated the casualty.
CMI CMI Marine Insurance & Casualty Assessment 2
What is the primary function of a marine surveyor retained by an insurer after a casualty?