Ocean Sea Freight Marine Cargo Insurance and Risk Management 2

Question 1

What is 'particular average' in marine cargo insurance?

Accepted Answer

A partial loss that affects only one cargo interest and is borne solely by that owner

Answer

Particular average is a partial loss affecting only the owner of the damaged goods and is not shared among other parties to the voyage, unlike general average.

Question 2

Which Institute Cargo Clause provides the LEAST coverage for cargo?

Accepted Answer

ICC (C)

Answer

ICC (C) is the most restrictive clause, covering only major casualties such as fire, explosion, stranding, sinking, collision, and jettison of cargo.

Question 3

What is a 'deductible' in a marine cargo insurance policy?

Accepted Answer

A predetermined amount that is subtracted from every claim payment, borne by the insured

Answer

A deductible is the portion of any loss the insured must absorb before the insurer covers the remaining amount of the claim.

Question 4

What does 'war risk' coverage in a marine cargo policy protect against?

Accepted Answer

Losses caused by acts of war, mines, torpedoes, and other hostile acts that are excluded from standard policies

Answer

War risk is a separate endorsement or policy that reinstates coverage for losses from hostile acts — such as war, mines, and torpedoes — that are standard exclusions in basic cargo policies.

Question 5

What is a 'constructive total loss' in marine cargo insurance?

Accepted Answer

The cost to recover or repair the cargo exceeds its insured value, making recovery uneconomical

Answer

A constructive total loss occurs when the cost of salvage, repair, or forwarding the cargo to its destination would exceed its insured value, so the insured can claim a total loss.

Ocean Sea Freight Practice Test

Ocean Sea Freight Practice Test

Ocean Sea Freight Marine Cargo Insurance and Risk Management 2