P&C Inland Marine and Ocean Marine Insurance 2 — Questions and Answers
Question 1: A contractor's equipment floater is designed to cover mobile equipment:
- Only while permanently installed at a single job site
- Wherever the equipment is located, including job sites, storage, and in transit (Correct answer)
- Only during transit between the contractor's yard and job sites
- Only equipment leased from a third party, not contractor-owned equipment
Correct answer: Wherever the equipment is located, including job sites, storage, and in transit
A contractor's equipment floater covers mobile equipment such as bulldozers, cranes, and compressors wherever they are located — at job sites, in storage, or in transit — because coverage floats with the equipment.
Question 2: Which of the following best describes the purpose of a Camera Floater under inland marine insurance?
- Liability coverage for photographers whose work causes injury to a subject
- Coverage for cameras and photographic equipment wherever they are taken (Correct answer)
- Coverage for a photography studio's building and fixtures
- Coverage for the loss of photographs, film, or digital image files
Correct answer: Coverage for cameras and photographic equipment wherever they are taken
A Camera Floater covers cameras and photographic equipment against loss, damage, or theft wherever the insured takes them, since cameras are portable and used in many different locations.
Question 3: The Bailee's Customer inland marine form is designed to provide coverage for:
- The bailee's own commercial property stored at a fixed location
- Customers' property held by a business for service, repair, or storage (Correct answer)
- Liability for bodily injury to customers on a business's premises
- Property damage caused by a bailee's delivery vehicles
Correct answer: Customers' property held by a business for service, repair, or storage
A Bailee's Customer policy covers the property of customers that has been entrusted to a business for purposes such as dry cleaning, repair, or storage while it is in the bailee's care.
Question 4: Which of the following would NOT typically be classified under inland marine insurance?
- Accounts Receivable coverage for destroyed billing records
- Valuable Papers and Records coverage for important documents
- Commercial Building coverage for a permanently attached structure (Correct answer)
- Electronic Data Processing Equipment coverage for mobile computer hardware
Correct answer: Commercial Building coverage for a permanently attached structure
Commercial Building coverage falls under commercial property insurance because buildings are fixed structures, while inland marine covers mobile, specialty, or intangible property that standard property forms do not adequately address.
Question 5: Accounts Receivable coverage under an inland marine policy protects a business against:
- Customers who dispute invoices or refuse to make payments
- Inability to collect money owed because accounts receivable records were destroyed (Correct answer)
- Bad debts that the business must write off due to customer insolvency
- Employee embezzlement of cash collected from customers
Correct answer: Inability to collect money owed because accounts receivable records were destroyed
Accounts Receivable coverage pays when a business cannot collect money owed because its records were lost or destroyed by a covered peril, making it impossible to prove and bill outstanding balances.
Question 6: In ocean marine insurance, 'hull' coverage refers to:
- The cargo storage area below the ship's main deck
- The physical vessel itself, including its machinery and equipment (Correct answer)
- The ship's freight revenue earned during a voyage
- The personal property of the crew members aboard the vessel
Correct answer: The physical vessel itself, including its machinery and equipment
Hull coverage in ocean marine insurance covers the physical ship — its structure, machinery, and equipment — similar to how physical damage coverage works for automobiles.
Question 7: A 'trip transit' inland marine policy differs from an annual transit policy in that it:
- Only covers motorized vehicles used for a single transport trip
- Covers one specifically identified shipment rather than all shipments over a policy year (Correct answer)
- Provides broader coverage with lower deductibles than an annual policy
- Is only available for shipments crossing international borders
Correct answer: Covers one specifically identified shipment rather than all shipments over a policy year
A trip transit policy is written for a single, specifically identified shipment, while an annual transit policy covers all eligible shipments made during the policy period under one ongoing policy.
P&C Inland Marine and Ocean Marine Insurance 2
A contractor's equipment floater is designed to cover mobile equipment: