Shipping Lawyer Marine Insurance Law 1

Question 1

What is 'Protection and Indemnity' (P&I) insurance in shipping?

Accepted Answer

Liability insurance covering third-party claims against shipowners including cargo loss, crew injury, and pollution

Answer

P&I clubs provide mutual liability insurance to shipowners and operators, covering third-party liabilities such as cargo claims, crew injuries, collision liability, and pollution.

Question 2

What is 'hull and machinery' (H&M) insurance?

Accepted Answer

Insurance covering physical damage to the vessel and its machinery

Answer

Hull and machinery insurance covers physical loss or damage to the vessel itself and its machinery, protecting the shipowner's investment in the ship.

Question 3

What is the doctrine of 'utmost good faith' (uberrimae fidei) in marine insurance?

Accepted Answer

Both parties must disclose all material facts relevant to the risk, whether or not asked

Answer

Marine insurance requires the highest degree of good faith — the assured must voluntarily disclose all material facts even if the insurer does not ask.

Question 4

What is an 'actual total loss' of a vessel under marine insurance?

Accepted Answer

The vessel is destroyed, irretrievably lost, or ceases to be a vessel

Answer

An actual total loss (ATL) occurs when the vessel is physically destroyed, permanently lost (e.g., sunk beyond recovery), or ceases to exist as a vessel.

Question 5

What is a 'constructive total loss' (CTL) of a vessel?

Accepted Answer

When the cost of recovering and repairing the vessel exceeds its insured value

Answer

A CTL occurs when the cost of saving and repairing the vessel would exceed the vessel's insured value, making it commercially impractical to repair.

Shipping Lawyer Practice Test

Shipping Lawyer Practice Test

Shipping Lawyer Marine Insurance Law 1