Shipping Lawyer Marine Insurance Law 2

Question 1

What is 'average' in marine insurance terminology?

Accepted Answer

A partial loss of or damage to the insured subject matter

Answer

In marine insurance, 'average' refers to a partial loss, distinguishing it from a total loss; it may be 'particular average' (single party's loss) or 'general average.'

Question 2

What does 'particular average' mean in marine cargo insurance?

Accepted Answer

A partial loss of cargo that falls on a single interest, not shared among all cargo owners

Answer

Particular average is a partial loss borne solely by the cargo owner whose goods were damaged, as opposed to general average which is shared by all interests.

Question 3

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

Accepted Answer

A threshold below which no claim is paid, but once exceeded the full loss is covered

Answer

A franchise deductible sets a minimum threshold; if the loss falls below it, nothing is paid, but if the loss exceeds it, the entire loss is recoverable — unlike a true excess deductible.

Question 4

Which of the following is covered under an 'all risks' marine cargo policy?

Accepted Answer

All accidental physical loss or damage from external causes

Answer

An all-risks cargo policy covers accidental physical loss or damage from external causes, but still excludes inherent vice, delay, willful misconduct, and wear and tear.

Question 5

What are 'Institute Cargo Clauses' (ICC) and which version provides the broadest coverage?

Accepted Answer

Standard cargo policy clauses, with ICC (A) being broadest (all risks) and ICC (C) being narrowest

Answer

The Institute Cargo Clauses are standard marine insurance terms; ICC (A) provides all-risks coverage, ICC (B) covers named perils, and ICC (C) is the narrowest named-perils form.

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Shipping Lawyer Marine Insurance Law 2