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 the abbreviation SRCC stand for in marine cargo insurance?
Answer: Strikes, Riots, and Civil Commotions
SRCC stands for Strikes, Riots, and Civil Commotions, a coverage extension that protects cargo against losses arising from labor disputes and civil unrest.
What is 'abandonment' in the context of a marine insurance claim?
Answer: The insured surrenders all rights and interest in the cargo to the insurer in exchange for payment of a total loss claim
Abandonment allows the insured to hand over all remaining interest in the cargo to the insurer and receive a total loss settlement, which is most common in constructive total loss situations.
What is the key difference between ICC (A) and ICC (B) cargo coverage?
Answer: ICC (A) is all-risk coverage with named exclusions, while ICC (B) covers only specific named perils listed in the clause
ICC (A) covers all risks of physical loss or damage except those specifically excluded, whereas ICC (B) only covers the specific perils enumerated in the clause, such as fire, earthquake, and washing overboard.
What is a 'valued policy' in marine cargo insurance?
Answer: A policy in which the cargo's insured value is agreed upon at inception and paid in full upon a total loss without further valuation
Under a valued policy, the insured value is fixed at policy inception; if a total loss occurs, the agreed amount is paid without the need to reassess the cargo's value at the time of loss.
What is the primary role of a Protection & Indemnity (P&I) Club in the shipping industry?
Answer: To provide mutual liability insurance to shipowners covering crew injuries, cargo damage claims, and third-party liabilities
P&I Clubs are mutual insurance associations that cover shipowners' liabilities, including crew illness and injury, damage to third-party cargo, collision liability, and pollution claims.
What does 'warehouse to warehouse' coverage mean in a marine cargo insurance policy?
Answer: Coverage begins when cargo leaves the seller's origin warehouse and ends when it arrives at the buyer's destination warehouse, including the sea voyage
Warehouse to warehouse coverage provides seamless protection for the entire journey of the cargo — from the moment it leaves the seller's premises until it is delivered to the buyer's warehouse.
Which of the following is NOT typically covered under a standard marine cargo insurance policy?
Answer: Inherent vice — the natural tendency of cargo to deteriorate or damage itself
Inherent vice, meaning the natural propensity of cargo to deteriorate on its own (such as fruit rotting or rubber oxidizing), is a standard exclusion because it results from the cargo's own nature rather than an external peril.