Ocean Sea Freight Marine Cargo Insurance and Risk Management 1

Question 1

What does Institute Cargo Clauses (ICC) A (All Risk) primarily cover?

Accepted Answer

All physical loss or damage from any external cause except named exclusions

Answer

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.

Question 2

What is 'general average' in maritime shipping?

Accepted Answer

A voluntary sacrifice or expenditure made to save the voyage, shared proportionally by all cargo interests and the shipowner

Answer

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.

Question 3

Under the CIF Incoterm, who is responsible for obtaining marine cargo insurance?

Accepted Answer

The seller at origin

Answer

Under CIF (Cost, Insurance, and Freight), the seller must arrange and pay for marine cargo insurance up to the named port of destination.

Question 4

What does 'Free of Particular Average' (FPA) mean in a marine insurance policy?

Accepted Answer

The insurer only pays for total losses and partial losses caused by specific major casualties such as stranding or sinking

Answer

FPA coverage limits the insurer's liability to total losses and partial losses resulting only from major casualties like stranding, sinking, burning, or collision.

Question 5

What is 'subrogation' in the context of marine cargo insurance?

Accepted Answer

The insurer's right to pursue a third party responsible for a loss after paying the insured's claim

Answer

Subrogation transfers to the insurer the right to recover the amount paid in a claim from the party legally responsible for causing the loss.

Ocean Sea Freight Practice Test

Ocean Sea Freight Practice Test

Ocean Sea Freight Marine Cargo Insurance and Risk Management 1