Marine Cargo Insurance and Risk Management Flashcards
7 cards from real Ocean Sea Freight practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Marine Cargo Insurance and Risk Management flashcards as text
What does Institute Cargo Clauses (ICC) A (All Risk) primarily cover?
Answer: All physical loss or damage from any external cause except named exclusions
ICC A is the broadest form of coverage, protecting against all physical loss or damage from any external cause except those explicitly excluded in the policy.
What is 'general average' in maritime shipping?
Answer: A voluntary sacrifice or expenditure made to save the voyage, shared proportionally by all cargo interests and the shipowner
General average requires all parties — cargo owners and the shipowner — to share proportionally in losses when a deliberate sacrifice is made to save the ship and remaining cargo from a common peril.
Under the CIF Incoterm, who is responsible for obtaining marine cargo insurance?
Answer: The seller at origin
Under CIF (Cost, Insurance, and Freight), the seller must arrange and pay for marine cargo insurance up to the named port of destination.
What does 'Free of Particular Average' (FPA) mean in a marine insurance policy?
Answer: The insurer only pays for total losses and partial losses caused by specific major casualties such as stranding or sinking
FPA coverage limits the insurer's liability to total losses and partial losses resulting only from major casualties like stranding, sinking, burning, or collision.
What is 'subrogation' in the context of marine cargo insurance?
Answer: The insurer's right to pursue a third party responsible for a loss after paying the insured's claim
Subrogation transfers to the insurer the right to recover the amount paid in a claim from the party legally responsible for causing the loss.
What is the primary purpose of a marine survey conducted after cargo damage?
Answer: To assess and document the extent and cause of loss or damage to support an insurance claim
A marine survey is conducted to document the nature, extent, and cause of cargo damage, providing the evidence needed to process an insurance claim.
What does the 'insurable interest' requirement mean in marine cargo insurance?
Answer: The policyholder must have a financial stake in the cargo and stand to suffer a loss if it is damaged or lost
Insurable interest requires that the policyholder has a financial relationship with the cargo and would suffer a monetary loss if it were lost or damaged.