PGI Marine Insurance 2

Question 1

Under the Institute Hull Clauses, what is the meaning of 'Total Loss Only' (TLO) cover?

Accepted Answer

The policy pays only in the event of actual or constructive total loss of the vessel

Answer

The policy covers only losses where the cargo is fully destroyed by fire

Answer

The policy covers total loss of freight but not the vessel

Answer

The policy applies only on the final voyage before a vessel is scrapped

Question 2

What does 'constructive total loss' (CTL) mean in marine hull insurance?

Accepted Answer

The cost of recovering or repairing the vessel would exceed its insured value

Answer

The vessel is completely destroyed with no salvage value remaining

Answer

The vessel is lost and its location is completely unknown after 30 days

Answer

The vessel is confiscated by a foreign government permanently

Question 3

What is the purpose of the 'deductible' (franchise) in a marine cargo insurance policy?

Accepted Answer

To limit the insurer's liability to large losses only, with the insured bearing small losses

Answer

To increase the premium payable by high-risk cargo owners

Answer

To restrict coverage to losses occurring within Singapore territorial waters

Answer

To allow the insurer to share risk with a reinsurer

Question 4

Institute Cargo Clauses (C) provides the NARROWEST cargo cover. Which of the following perils is covered under Clauses (C)?

Accepted Answer

Loss due to washing overboard

Answer

Theft or pilferage of cargo

Answer

Damage caused by condensation inside the container

Answer

Loss arising from delay in delivery

Question 5

In Singapore, the Maritime and Port Authority (MPA) primarily regulates which aspect relevant to marine insurance?

Accepted Answer

The registration, safety, and seaworthiness standards of vessels

Answer

Marine insurance premium rates and policy wording

Answer

The licensing of marine insurance brokers

Answer

The settlement of general average disputes

Question 6

What is 'freight insurance' in the context of marine insurance?

Accepted Answer

Insurance protecting the shipowner's or charterer's expected income from carrying cargo

Answer

Insurance covering the physical cargo loaded on a vessel

Answer

Insurance covering the vessel's hull and machinery

Answer

Insurance against legal liability for pollution caused by vessels

Question 7

What is a 'war risk' exclusion in standard marine cargo policies, and how is it typically addressed?

Accepted Answer

War risks are excluded from standard cargo clauses but can be reinstated by purchasing a separate war risk extension

Answer

War risks are automatically included in all Institute Cargo Clauses at no extra cost

Answer

War risks are covered under the Institute Cargo Clauses (A) up to a sublimit of 50% of the sum insured

Answer

War risks are uninsurable in Singapore under MAS regulations