Ocean Sea Freight Marine Cargo Insurance and Risk Management 3

Question 1

What does the abbreviation SRCC stand for in marine cargo insurance?

Accepted Answer

Strikes, Riots, and Civil Commotions

Answer

Shipping Risk and Cargo Coverage

Answer

Standard Rate and Cargo Clause

Answer

Sea Route and Container Conditions

Question 2

What is 'abandonment' in the context of a marine insurance claim?

Accepted Answer

The insured surrenders all rights and interest in the cargo to the insurer in exchange for payment of a total loss claim

Answer

The shipper cancels the shipping contract while the vessel is at sea

Answer

The vessel diverts from its scheduled route due to severe weather

Answer

Cargo is left at the port because of unresolved customs issues

Question 3

What is the key difference between ICC (A) and ICC (B) cargo coverage?

Accepted Answer

ICC (A) is all-risk coverage with named exclusions, while ICC (B) covers only specific named perils listed in the clause

Answer

ICC (A) covers only ocean perils while ICC (B) extends to air freight

Answer

ICC (A) applies to new goods only, while ICC (B) covers used or second-hand cargo

Answer

ICC (A) is for full container loads, while ICC (B) is for LCL shipments

Question 4

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

Accepted 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

Answer

A policy in which the insured value of the cargo is determined after a loss occurs

Answer

A specialized policy that covers only high-value luxury or fine art cargo

Answer

A policy with a premium that varies based on current market value of the cargo

Question 5

What is the primary role of a Protection & Indemnity (P&I) Club in the shipping industry?

Accepted Answer

To provide mutual liability insurance to shipowners covering crew injuries, cargo damage claims, and third-party liabilities

Answer

To provide cargo insurance directly to importers and exporters

Answer

To regulate and set standard freight rates across major shipping lanes

Answer

To conduct vessel inspections and certify seaworthiness

Question 6

What does 'warehouse to warehouse' coverage mean in a marine cargo insurance policy?

Accepted 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

Answer

Coverage applies only while cargo is stored in certified bonded warehouses

Answer

Coverage is provided by the warehouse operator rather than the marine insurer

Answer

Coverage applies only to inland storage transit and not the sea leg of the journey

Question 7

Which of the following is NOT typically covered under a standard marine cargo insurance policy?

Accepted Answer

Inherent vice — the natural tendency of cargo to deteriorate or damage itself

Answer

Fire and explosion damage during sea transit

Answer

Theft of cargo from the vessel

Answer

Damage caused by collision of the carrying vessel