Maritime Law Marine Insurance Law 2

Question 1

The 'Institute Cargo Clauses (A)' provide the broadest cargo coverage because they use which coverage basis?

Accepted Answer

All risks of loss or damage

Answer

ICC (A) clauses cover all risks of physical loss or damage to the cargo subject to standard exclusions, making them the widest standard cargo coverage available.

Question 2

In marine insurance, 'general average' requires all parties sharing in a maritime venture to contribute to:

Accepted Answer

Losses deliberately incurred to save the venture from a common peril

Answer

General average is the principle that all parties (ship, cargo, freight) must contribute proportionally to extraordinary sacrifices or expenses made to save the whole venture from a common peril.

Question 3

Under U.S. law, which Act governs the general average obligations for voyages to or from the United States?

Accepted Answer

York-Antwerp Rules (incorporated by contract) and the U.S. Carriage of Goods by Sea Act

Answer

General average in U.S. practice is typically governed by the York-Antwerp Rules as incorporated into the bill of lading or charter party, alongside COGSA provisions.

Question 4

A 'constructive total loss' (CTL) in marine insurance arises when:

Accepted Answer

The cost of repair or recovery exceeds the insured value of the vessel

Answer

A CTL occurs when the vessel is not an actual total loss but the cost of recovering or repairing it would exceed its insured value, making it commercially a total loss.

Question 5

When a marine insurer pays a total loss claim, it acquires the insured's rights against third parties through:

Accepted Answer

Subrogation

Answer

Subrogation allows the insurer who has paid a loss to step into the insured's shoes and pursue recovery from the party responsible for the loss.

Maritime Law Practice Test

Maritime Law Practice Test

Maritime Law Marine Insurance Law 2