IC67|MARINE ONE LINER| PARA 13.2 EXAM|III EXAM

IC67|MARINE ONE LINER| PARA 13.2 EXAM|III EXAM: 

  1. Articles sent by post can be covered by Marine insurance – Yes
  2. Free on Board ( FOB Contract ) Responsibility lies with – The seller is responsible till the goods are placed on board the steamer.  The buyer is responsible thereafter.  He can get the insurance done wherever he likes.
  3. Free on Rail ( FOR Contract ) Responsibility lies with – The provisions are the same as in FOB and this is mainly relevant to Internal transactions 
  4. Cost & Freight ( C&F Contract ) responsibility lies with – buyers responsibility normally attaches once the goods are placed on board. He has to take care from that point
  5. Cost, Insurance& Freight ( CIF Contract ) responsibility lies with – in this case , the seller is responsible for arranging the insurance.  He includes the premium charge as part of the cost of goods in the invoice
  6. The normal practice in export/import trade is for the exporter to ask the importer – to open a letter of credit with a bank in favour of exporter
  7. Marine Insurance Act, 1963 deals with – legal framework for transaction of Marine insurance for both cargo and hull & basic principles, basis of valuation under the policies, basis of settlement of losses etc
  8. For export and import policies which clauses are used – Institute Cargo Clauses are used which were drafted by the Institute of London Underwriters
  9. For inland transit – Inland Transit clauses are used designed by Tariff Advisory Committee
  10. Should every Marine policy must be stamped – Yes in accordance with the provisions of Indian Stamp Act.
  11. The clauses covers:

ICC ( C)

a). fire & explosion

b). Vessel or craft being stranded, grounded, sunk or capsized

c). overturning or derailment of land conveyance

d). collision or contract of vessel, craft or conveyance with any external object other than water

e). discharge of cargo at a port of distress

f) general average sacrifice

g) jettison

ICC ( B)

a). fire & explosion

b). Vessel or craft being stranded, grounded, sunk or capsized

c). overturning or derailment of land conveyance

d). collision or contract of vessel, craft or conveyance with any external object other than water

e). discharge of cargo at a port of distress

f) general average sacrifice

g) jettison

h) earthquake, volcanic eruption or lightning

i) washing overboard

j) entry of sea, lake or river water into vessel, craft, hold, conveyance, container, lift van or place of storage

i) total loss of any package lost overboard or dropped whilst loading on to, or unloading from vessel or craft

Add on cover on payment of extra premium in ICC(B):

a) theft, pilferage and/or non-delivery

b) fresh water and rainwater damage

c) hook and/or oil damage

d) heating and sweating

e) damage by mud, acid and other extraneous substances

f) breakage

g) leakage

i) country damage

j) bursting/tearing of bags

ICC ( A)

These clauses provide cover for all risks of loss or damage, to the subject matter of insured.  The terms all risks means losses which are caused by accidental circumstances only.  Under ICC(C) & ICC(B) the risks covered are specified under ‘A’ clauses the risks covered are not specified and all risks are covered

  1. Time policies means – the policies issued for specified period i.e. 6 months, one year or 2 years etc
  2. In marine insurance time covers under – Duration clause
  3. Duration clause popularly known as – Warehouse to Warehouse clause
  4. Inland Transit ( Rail/Road ) Clauses covers

ITC( RAIL/ROAD) ‘C’

a) fire

b) Lightning

ITC( RAIL/ROAD) ‘B’

a) fire

b) lightning

c) breakage of bridges

d) collision with or by the carrying vehicle

e) overturning of the carrying vehicle

f) derailment or accidents of like nature to the carrying railway wagon/vehicle

Add i  covers on extra premium

theft, pilferage, non-delivery, SRCC etc

ITC( RAIL/ROAD) ‘A’

All risks of loss or damage to the insured goods covered.

  1. Time limit under Duration clause in Inland Transit clauses – in respect of transits by rail/road until expiry of 7 days after arrival of the railway wagon or vehicle at final destination railway station
  2. Is there any standard set of clauses for Postal sending – no ICC or Inland Transit clauses may be used
  3. First class vessels means – Recognized by Lloyds Register, American Bureau of Shipping, Indian Register of shipping etc
  4. Shall Tramp Vessels follow schedule – No Tramp vessels do no follow fixed schedule but carry cargo wherever it is available and wherever required
  5. Liner vessels – carry cargo according to an advertised schedule between home port and overseas ports of destination, calling en route at intermediate ports on the voyage
  6. Shipments by TRAMP vessels – charges heavy extra premium under cargo policies
  7. The all India Marine Cargo Tariff introduced in the year – 1983
  8. The slip printed in Red and marked “important” is known as – Red Slip
  9. Red slip drawn the attention of consignees to certain procedures to be followed by them to preserve rights of recovery against carriers is attached to – Marine Policy
  10. Open Policy is known as – Floating policy also
  11. An Open Policy is a stamped document and Certificates issued under this policies need not be – Stamped again
  12. Open policies issued to cover – Inland Transits only
  13. Open cover is – not a stamped document and issued to cover imports and exports
  14. Certificates under Open Cover – to be stamped
  15. Limit per Bottom or per conveyance means – shipment declared under open cover should not exceed the stipulated amount
  16. Basis of valuation – Prime cost of goods+ freight and other charges incidental to shipment + cost of Insurance+10% to cover profits
  17. Location clause – limits the liability of the insurers at any one time or place before shipment
  18. Limit is as per the Per bottom in Location clause but some times it may be agreed to an amount – up to 200%
  19. As per the Declaration clause under open cover – the insured shall declare all the consignments 
  20. Special Declaration Policy issued  – if sum insured exceeds more than 2.00 crores for Inland transits only
  21. For Special declaration policy – Proposal form to be used
  22. Special Storage Risks Insurance issued along with – Open policy or a Special Declaration Policy
  23. Special storage risks Insurance purpose is – to cover goods lying at the Railway premises or carrier’s go downs after termination of cover under open or special declaration policy but pending clearance by the consignee
  24. Annual policy issued for 12 months covers – goods not for sale and which are in transit by rail/road from specified depots/processing units to other specified depots/p.units
  25. Warranty 3 provides that – claim under the Duty policy would be payable if the claim under the cargo policy is payable
  26. Duty Insurance is not valid – if effected after the arrival of the vessel at the destination port
  27. When Increased value Insurance policy be taken – if the market value of the goods at destination port on the date of landing is higher than the CIF and Duty value of the cargo
  28. Duty Insurance & Increased Value Insurance issued only – on imports
  29. TAC has formulated package policies to cover transit risks as well as storage risks incidental to transit for – Tea, coffee, cardamom and rubber
  30. Abandonment – Giving up the proprietary rights in insured property to the underwriter in exchange for payment of a constructive total loss
  31. Act of God – An event which no human foresight can prevent e.g. Earthquake
  32. Accident – An unforeseen, accidental and unpremeditated event which leads to damage, injury or death
  33. Accumulation – Two or more risks in close proximity increasing the level of Maximum Possible Loss
  34. Adjoining – Two or more risks close together with likely hood of communication
  35. Adjacent – Two or more risks next to each other which may or may not communicate
  36. Average – In insurance terms, Average is applied at a time of loss, when the insured value is less than the actual value of property insured.  The client carries a part of the claim in  proportion to the amount of under-insurance
  37. Assignee – One who receives rights from an assignor
  38. Assignor – One who assigns his rights to another
  39. Attachment date – The leading underwriter enters this date on the brokers slip to provide a point from which the period allowed in the terms of credit scheme will operate
  40. Attestation clause – The part of a policy in which the Underwriter binds himself to the policy conditions
  41. Avoidance – The right of an underwriter, in the event of a breach of good faith or delay in commencement of an insured voyage, to step aside from the insurance contract and to treat it as though he never accepted the risk
  42. Betterment – Improvement in subject matter’s condition after repair
  43. Burning cost – A loss ratio determined from the statistics of a number of preceding years in order to assess the premium to be charged to the reinsured in connection with excess of loss reinsurance
  44. In excess of – Beyond, over and above a certain figure, usually referring to re-insurers proportion
  45. Escalator Clause – A clause allowing for automatic adjustment of the insured value in certain non-marine material damage insurance
  46. Excess of line Reinsurance – A reinsurance to cover that part of the original underwriters acceptance which is in excess of his retained line
  47. Excess point – Term used in excess of loss reinsurance to determine the point at which the re-insurer comes on risk
  48. FCAR – Free of Claim for accident reported: No claim is payable under the insurance if it arises from an accident which is known to have occurred before acceptance of the risk
  49. Warehouse keepers – Receive the goods for the purpose of storage in their warehouses
  50. Shipping agents – Many merchants prefer to put their shipments in the hands of a shipping agent who, for a consideration, undertakes to attend to the transit operation
  51. Stevedores – are contractors appointed by shipping companies for loading and discharging cargoes
  52. The sales in India is governed by – Sales of Goods Act, 1924
  53. International chamber of commerce have prepared a Brochure attaching to various sales terms – which in terms called INCO terms and are commonly applied internationally
  54. Free on Board ( FOB) – Under FOB contract, the seller undertakes to deliver the goods over the ship’s rail, at which point the risk passes from the seller to the buyer.  The seller responsibility is to pay all expenses until this point
  55. Cost & Freight ( C&F) – under this contract responsibility to arrange insurance is on the buyer
  56. Cost, Insurance & Freight ( CIF ) – under this sale contract the seller is having responsibility to insure the goods.  This policy is truly Warehouse to Warehouse .
  57. Trader will have a control on Insurance arrangements – BUY ON FOB BASIS and SELL ON CIF BASIS this way he will have control of insurance arrangements
  58. From Insurer’s point of view – A CIF Contract is preferable because the seller assigns it to the buyer
  59. Ex – Works means – Seller sells their goods from his premises and it is the responsibility of the buyer to take delivery at that point
  60. Free Carrier ( F.C.A.) – the seller delivers the goods to a carrier to be named by the buyer at a place also to be notified by the buyer.  The goods are at risk of seller till such delivery and the risk thereafter is transferred to buyer including all further costs
  61. F.A.S ( Free Alongside Ship ) – The seller undertakes to place the goods on the quay alongside the ship up to which point they remain at his risk
  62. C.P.T. ( Carriage paid to ) – The sellers bear the cost of carriage up to a named point. Position regarding risk is under C&F terms
  63. C.I.P.  Means – Carriage and Insurance paid
  64. D.A.F. ( Delivery at Front ) – the seller undertakes to deliver the goods at a named place at point at the frontier ( i.e. At the border between two nations )
  65. D.E.S. ( Delivery Ex Ship ) – The seller undertakes to arrange shipment up to the destination port and bears costs and as well as risk up to that point
  66. D.E.Q ( Delivery Ex Quay ) – The position is as above except that instead of on board the goods are placed in the quay
  67. D.D.U ( Delivery duty Unpaid ) – The seller undertakes to deliver the goods at named place in the country of importer without payment of the custom duty as applicable in that country
  68. Sellers Contingency Insurance policy to be given to – Seller if the buyer refuses to take the delivery of the goods the interest of the seller will be protected under this policy
  69. Credit Insurances will cover some risks of such rejection but – they are concerned only with the financial aspects and they are not concerned with any loss or damage suffered by the goods
  70. Insurance covers loss or damage to goods but not – the extra expenses incurred by the seller following a reversion of goods to him example warehousing charges and cost of reshipping
  71. Depending on the reason for the repudiation of the sale by the buyer, the above expenses are recoverable by the seller from insurers covering the Credit Risk, namely – Export Credit Guarantee Corporation ( ECGC)
  72. Sellers contingency policy is not – Assignable except to a banker operating in India
  73. On settlement of claim under Sellers contingency policy – subrogates to the insurer all the sellers rights against the buyer himself or the buyers insurance or other third parties
  74. The Sellers contingency policy prohibits – disclosure of its existence to any other party, the buyer in particular
  75. Marine Insurance Act, 1963 Sections 6 to 17 deals with – an Insurable Interest
  76. ICC Clauses which clause deals with Insurable Interest – Clause no.11
  77. Which policies are prohibiting ASSIGNMENT – Duty Insurance Policy, Increased Value Insurance Policy, Special Declaration Policy, Annual Policy, Sellers Interest Contingency Policy, Special Storage Risk Insurance Policy
  78. How many parties to a  Bill of Exchange –  Drawer: the person who writes the bill and called Debtor, Drawee: the person to whom the bill is addressed and if he accepts he will be called acceptor & Payee: The person who is to receive payment and in whose favour the bill is drawn. Usually the drawer is also the payee
  79. Exporter will get money in – 3 ways. Documentary Bills: a documentary bill is a draft with shipping documents attached unless the bill paid or accepted the goods will not be handed over to the buyer. Bank Advance under Letter of Hypothecation: In this method the exporter discounts the documentary bill of exchange with a bank having branches in both the countries. Documentary credits: Bankers safeguard the interest of the Seller and Buyer by way of Letter of credit
  80. Extra premium is charged for – Overage, Under Tonnage of v& Non classification vessel
  81. Buyer or Imported which Marine policy to be issued – Sale on CIF Basis
  82. For Inland Transit Duration clause limits the coverage to – 7 days of arrival of consignment at destination town
  83. Institute Cargo Clauses (A), (B) & (C) replaced the earlier – Institute Cargo clauses ( All risks ), (W.A) & ( F.P.A.)
  84. Sue & labour clause and Waiver Clause were reworded – and embodied in the new clauses
  85. Stamp Duty as per the scale in Indian Stamp Act, 1899 is recoverable from – the assured
  86. There is no Sum Insured for Open Cover.  There are, however two limits namely – Limit per Bottom ( LPB ) & Limit per Location 
  87. Open Cover may be cancelled by either party – giving 30 days notice in writing for Marine risks with the exception of – A)War & SRCC risks which are subject to 7 days notice of cancellation for ocean voyages, other than shipments to or from USA B) War & SRCC risks on shipments from or to USA which are subject to 48 hours notice of cancellation  C) inland transits, Bangladesh, Bhutan, Nepal, Pakistan and Afghanistan ( not in conjunction with overseas voyage ) which are subject to 48 hours notice of cancellation
  88. Basis of Valuation under Open Cover – CIF + 10%
  89. Basis of Valuation under Open Policy – Invoice cost of goods, the freight for which the insured is liable, the cost of insurance + 10%
  90. Notice time for cancellation for Open Policy is – 30 days either side
  91. A ‘Clause Paramount’ can only be removed from the policy by physical deletion; other wise – it overrides all other wording, notwithstanding the rules of interpretation
  92. Stamp duty charged for sea voyages and transit by country craft is – 10 paise for every Rs.1500/- or part thereof
  93. When the rate charges is 1/8th % ( i.e.125% ) or less the stamp duty is – only 10 paise regard less of the sum insured. Total premium charged under the policy, inclusive of premium for war and strikes risks is taken into account when determining whether the rate is 1/8th % or less
  94. When  inland transit is covered in conjunction with a sea voyage – the stamp duty charged as per sea voyage
  95. For the transit purely by road or by rail the stamp duty is – 50 paise when the sum insured is over Rs.5000/- and Rs.1/- when the sum insured is over Rs.5000/-
  96. Exchange control regulations regarding payment of premiums on cargo policies covering exports and imports are called – General Insurance Memorandum ( GIM )
  97. Residents in India are not permitted to take – Marine insurance cover with insurance companies in foreign countries without prior approval from RBI
  98. Marine policies on shipments between India and other countries as also between two points out side India may be – issued in Rupees or in any foreign currency
  99. The “Institute” Clauses are drafted by – The Technical and the Clauses Committee of the Institute of London Underwriters
  100. Comprehensive clause generally is used to extend the cover afforded by ICC(B) when required contains – “including the risks of theft, pilferage and/or non-delivery, fresh water and rain water damage, hooks, oils, mud, acid and other extraneous substances or heating and sweating and damage by other cargo”
  101. “Excluding Shortage” from sound bags/packages unless shortage is caused by an insured peril” – this clause is generally used with bagged cargo in order to eliminate ordinary or inevitable loss
  102. Institute Replacement Clause is generally used – whenever machinery, plant or equipment is required to be insured. This clause limits any claim for loss or damage to part or parts of the insured machine
  103. Using “Pair and set clause” the underwriter limits his liability – to the insured value of the lost or damaged part
  104. “Cutting clause” – states that the damaged portion should be cut off and the balance utilized.  This is used in policies covering pipes or similar items of length
  105. Label Clause is used in – Tinned food stuffs
  106. The Pickings Clause provides that – the insurer will pay the cost of picking and the cost of re baling both sound and damaged material because the damaged material does have salvage value and this implements in Cotton, Wool and similar commodities
  107. Garbling Clause provides that – the insurer will pay the cost of garbling ( means sift, to cleanse, to separate sound from the whose )as such an exercise prevents further damage and reduces the claim
  108. The difference between the Institute Commodity Trades Clauses (A), (B)&(C) and ICC(A), ICC(B)&ICC(C) is –  1. Clause relating to insolvency and financial default of the ship owner etc and  2. The treatment of unseaworthiness /unfitness of the vessel etc
  109. The difference between ICC(B) and Institute Coal clauses is – it extends Fire and Explosion cover to include heating even when caused by spontaneous combustion and inherent vice
  110. Institute Jute clauses is similar to Institute Commodity Trade clauses (B) with the difference – Earthquake, Volcanic eruption and lightning are not covered and the cover is attached when jute is boarded on vessel and the time limit 60 days after discharge at the port is reduced to 30 days in Jute Clauses
  111. Institute Natural Rubber Clauses is similar to Institute Commodity Trade Clauses (B) with the difference – In ICTC(B)  loss or damage to rubber due to water from any source or by hooks, spilling or leakage of any substance or liquid, other cargo or moisture from wet or damp also covered.  In addition to that this clause covers theft, pilferage and non-delivery
  112. Institute Bulk Oil Clauses covers – as per ICC(B) and Leakage of oil from connecting pipelines in loading, transshipment or discharge and negligence of master, officers and crew in pumping cargo and contamination due to stress of weather is covered
  113. Trade clauses except Institute Bulk Oil Clauses and Timber Trade Federation clauses – are not commonly used in India
  114. What ‘Process clause’ says – which states that when the subject matter is undergoing any process, no claim will attach for loss or damage except by fire, burglary and theft
  115. The valuation for all Marine risks is CIF + 10% but for Rejection risks – it is CIF value only
  116. Special covers for Tea, Coffee, Cardamom and Rubber for tea the coverage is – from the time the green leaves plucked at the garden, and continues whilst being carried to, and stored and processed, at the factory, and further continues whilst in transit until solt at the Auction centre in India
  117. The total period of storage in the above does not exceed – at various locations cannot exceed 120 days
  118. Special cover for Tea, Coffee, Cardamom and Rubber are equal to All Risks policy but some exclusions are – for TEA policy loss or damage due to defect in the manufacturing process and for CARDAMOM policy excludes loss or damage due to vermin, insects, natural  etc and SRCC risks can be covered at additional premium
  119. How the above policy operates – it is an Annual Policy and the insured has to declare the total value and as per that the premium will be adjusted.  
  120. Package policy for Exporters can be issued to – exporters who have been granted an Advance License under the Duty Exemption Scheme by the Government Of India
  121. How many sections are there in Package Policy for Exporters – Three sections one is Inward transit from Air/Sea/Road to warehouse.  Section 2 covers Storage cum Processing and Section 3 covers Outward transit by Air/Sea/Road/Rail but Under section 2 the sum insured shall not be less than 20% of the sum insured under section 3 of the policy
  122. The All India Marine Cargo Tariffs was – discontinued with effect from 1.4.1994
  123. Who many sections are there in erstwhile All India Marine Cargo Tariff – 13 sections
  124. Rejection risks policy in Marine designed for – Exporters excluding frog legs in any form
  125. Insurance underwritten by UIIC as a Flag company in South India the sharing pattern is – 31:23:23:23
  126. Market Agreement is there for –  a)Export of Diamond, Precious stones and Jewelry b) Despatch through Courier Service
  127. Minimum premium for Marine policy is – Rs.50/- for a specific marine policy; Rs.20/- for a Open cover Certificate; for endorsement Rs.15/- 
  128. Liner means – vessels which are over 15 years of age and below 25 years and maintained a regular pattern of trading on an advertised schedule between ports 
  129. The premium will be loaded 50% if – the despatches by open wagon or open vehicle
  130. If despatches are at carriers risk ( rail/road ) – 10% discount in premium to be allowed
  131. If despatches by private carrier – the liability of the insurer is limited to 75% of the loss assessed
  132. It is prohibited to issue policies to – Transport companies, transport contractors, Freight Forwarders either in their own name or jointly with the owner of the goods, except on goods owned by them
  133. Minimum annual estimated despatches ie. Annual turnover – shall be Rs.2.00 Crores
  134. Special Declaration policy shall  not be given – in joint names
  135. SPD is not – Transferable and Proposal form is must 
  136. Sum insured under SPD shall not be less than – Previous year actual turnover
  137. Mid term increase is allowed – only once and second time increase with the prior approval of the Regional Office
  138. Minimum Sum Insured under SDP is – Rs.2.00 Crores
  139. If Sum insured is less than Rs.2.00 Crores at ending of the policy – normal rate should be charged
  140. Upward adjustment in Special Declaration Policy – is not permitted
  141. If SDP is cancelled by the assured – the minimum premium retention is Rs.5000/-
  142. Downward adjustment of premium can be made after receiving the final declaration – which must be submitted by the insured within 60 days of expiry of the policy
  143. Annual policy issued to – cover goods belonging to the assured are held in trust by him, not under contract of sale or purchase, which are in transit by rail or road from specified depots/processing units to other specified depots/processing units
  144. The Annual Policy insurance is subject to the warranty of – warranted that the depots from which the transit commences and at which the transit ends are owned or hired by the assured
  145. The Annual policy shall not be issued for the Sum Insured less than – 

Distance of specified transit Turnover Single Carrying Limit Percentage of Estimated 80 Km or less Twice or 1% Over 80 Km upto 500 Km Four Times or 2% More than 500 Km Six Times or 3% Which ever is more

  1. Minimum premium for Annual Policy is – Rs.5000/-
  2. Reinstatement of Sum Insured is to be done in – Annual policy
  3. Total liability of the Insurer shall not be more than twice the Sum insured stated in – Annual Policy
  4. For Cargo transported in Inland Vessels the discounts depends upon distance of transit in water ways – for transits not exceeding 80 km 10% and for transits between 80 to 200 km 5%
  5. For cargo transported in Inland Vessels policy is subject to – INLAND TRANSIT ( INLAND VESSSELS) CLAUSE(BASIC COVER) the scope of this is equal to ICC(C) except that Loss due to General Average Sacrifice and Jettison are not included
  6. Category A Ports – Mumbai, Nhava Sheva, Calcutta, Cochin, Kandla, Madras, Visakhapatnam, Haldia, Mangalore, Marmugao and Tuticorin
  7. Category B Ports – Alleppy, Bedi, Rozi, Calicut, Kakinada, Mandvi, Navlakkhi, Panaji, Paradeep, Portbunder, Port Blair, Port Okha, Sikka and Veraval
  8. Category C Ports – Bhatkal, Bhavnagar, Coondapur, Honavar, Karwar, Machilipatnam, Pondicherry, Port Reddi, Tallicherry and Trivandrum
  9. Category D Ports – All ports on the Indian coast other those above, Andaman, Nicobar and Lakshadeweep Islanads, Nagapatnam and Neendakara
  10. The rates between A ports is lower and the rates between D ports are – Higher
  11. Two types of covers are available i.e ICC(B) & ICC ( C ) – Cover against total loss of vessel only may be granted at 75% of ICC ( C ) rate
  12. For DECK Cargoes like Timber stowed on deck insurance shall be limited to – FAA( Free of All Average ) and ICC ( C ) Cover only, both including Jettison and washing overboard. The rate charged shall not be less than double the under-deck ICC ( C) rate for the same voyage
  13. For FPA ( Free of Particular Average ) COVER INCLUDING Jettison and washing overboard the rate should be – 3 times the under deck ICC ( C ) rate is charged
  14. When the terms of sale are FOB the insurance is arranged by – the Buyer
  15. Risk under FOB ( buyers policy) commences on loading of the cargo on the overseas vessel – because it is at that juncture of transit that the risk passes from the seller to the b uyer
  16. What is Short Cut Cargo – it relates to goods which arrives too late for a vessel at a loading port or else the goods are not loaded because the vessel has a full cargo load
  17. BUILLION means – Raw gold or silver in lump
  18. SPECIE means – metal in the form of minted pieces
  19. Mechanized Sailing Vessel means – as a vessel registered with Government Authority as having auxiliary engines
  20. How many type of covers available in Section 8 Sailing vessels – there are three types as ‘A’ , ‘B’ and ‘C’
  21. ‘A’ Covers – Total and/or Constructive total loss of the subject matter insured due to total loss and/or constructive total loss of the vessel only
  22. ‘B’ covers – loss reasonable attributable to (i) vessel being burnt  (ii) vessel being sunk. And loss to subject matter insured caused by jettison, if necessitated by stress of weather only
  23. ‘C’ covers – (i) vessel being burnt (ii) vessel being stranded or sunk.  And loss due to jettison due to stress of weather, stranding, sinking or burning or collisions at sea
  24. For shipments by mechanized sailing vessels – a discount of 33 1/3% on the premium may be allowed
  25. Shipments of Timber and Tiles attract a loading of – 25% rate under Sailing Vessels
  26. Minimum premium under Sailing Vessels – Rs.30/- only
  27. As per Marine Insurance Act all Marine policies are valued policies but DUTY policy – is not a valued policy and if any claim it will be paid as per the duty paid or on the basis of the Sum Insured whichever is less
  28. The rate of premium for Duty Policy is – 75% of the rate charged on cargo
  29. In Increased Value policy ‘Lost or not Lost’ provision of the Standard policy shall not apply , unless the insurance has been effected in terms of – a standing open policy or Open Cover
  30. The assured will be required to bear 25% of the claim amount payable under – the Increased Value component of the policy
  31. Increased value policy shall be given for the insured for more than – 100% of the CIF value of the cargo
  32. War risk is excluded for sending except – at a transshipment ( or Air port ), when cover is allowed to continue for a maximum period of 15 days on board or on land, whilst awaiting on-carriage
  33. The tariff provides for Minimum rates for War and SRCC in respect of –  1. crude oil stored afloat for government account  2. cargo stored afloat in mechanically self-propelled vessels
  34. Special Storage Risk Insurance policy is to be given in conjunction with – an Open policy or a Special Declaration  Policy covering the transit of goods by rail or road
  35. SSRI Policy will be issued to – only Consignors or Suppliers 
  36. Insurance interest in SSRI policy is – not transferable
  37. Agency commission and Special discount in lieu of Agency Commission – is 5% only under SSRI Policy
  38. Short period policies are not permitted – under SSRI policy
  39. Five principal factors are involved in the consideration of a cargo risk they are – The vessel, The voyage or Transit, The nature of cargo to be insured, The type of packing and last one is Type of Insurance cover
  40. An Ocean going vessel usually in – the 5000 to 15000 Gross Register Weight (GRT ) 
  41. Vessel is sub – divided in to – LINERS and TRAMPS
  42. Tramp means – Carriers mostly bulk cargoes very often seasonal in character for which she is specially chartered.  Tramps will carry large cargoes
  43. A Cargo Liner is better risk than – Tramp
  44. The details of vessel can be found by the underwriters with – “Register of Ships” or “Loyd’s Shipping Index”
  45. BUREAU VERITAS the Vessel Classification Society from 1.4.1994 deleted thereby that society will not comply with – requirements of the Institute Classification of Clause
  46. Age of the vessel is restricted to – 15 years other than liner vessels in which case it may be extended to 25 years
  47. For tankers overage is set at – 11 years
  48. Chartered vessels and vessels under 1000 GRT must be classed and should not be  – over 15 years of age
  49. The following are Classification Societies – 
  • Lloyd’s Register
  • American Bureau of Shipping
  • Bureau Veritas
  • Germanischer Lloyd
  • Korean Register of Shipping
  • Nippon Kaiji Kyokai
  • Norsk Veritas
  • Registaro Italiano
  • Register of Shipping of Russia
  • Polish Register of Shipping
  • Indian insurers recognize also the Indian Register of Shipping ( IRS )
  1. Underwriters are seriously concerned regarding – Flag of Convenience Vessels ( F.O.C.)
  2. Flag of Convenience Countries are – Costa Rica, Cyprus, Dominican Republic, Greece, Honduras, Lebanon, Liberia, Maldive Islands, Malata, Morocco, Nicaragua, Panama, Singapore, Sri Lanka and Vanuatu
  3. Crafts ( barges or lighters ) carrying goods to or from the overseas vessel need not be so classed, nor are – they subject to an age limit
  4. Except War risks the cover granted under the Institute Cargo Clauses is from – Warehouse to Warehouse
  5. If cargo is shipped on vessel referred to GIC but not approved by GIC or not referred to GIC at all – then 1% additional premium will be charged on cargo carried by such vessels
  6. As per Carriage of Goods Act, 1925 for cargo stowed on Deck – prospects of recovery from carriers does not come hence it attracts Higher premium
  7. Lighterage means – increased handling and therefore greater exposure to loss/damage
  8. Ullage means – Shortage
  9. Most cargoes which contain excess of humidity when shipped are susceptible to – heating and spontaneous combustion ex: Jute Fibres, Cotton in fully pressed bales
  10. There are cargoes which are Odorous or Aromatic – Ex: Lemons, Oranges, Fertilizers , Cloves, cheese, essential oil, soap, rubber, spices tobacco, garlic, hides and skins
  11. Some cargoes are Hygroscopic – that means deliquescent, becoming liquid ex: caustic soda, nitrates, salt, sugar
  12. When Asbestos Cement sheets cargo insured policy must be subject to – Cutting Clause
  13. Cement is usually packed in – Multi-ply paper bags
  14. Copra is shipped in – Hessain bags
  15. Efflorescent means – When a substance evolves moisture upon exposure to the atmosphere it is said to be Efflorescent ex: chemicals
  16. ICC (B) and ICC ( C ) extended to cover on additional premium the extraneous perils of – Theft, Pilferage & Non Delivery7, Fresh Water & Rain water damage, Damage by hooks, oils, mud, acid & other extraneous substances, Heating & sweating AND Damage by other Cargo
  17. Variations of temperature in badly ventilated holds can cause condensation and consequent – sweat damage to the goods
  18. Oils , Liquid items generally stored in drums or barrels and there is a possibility of leakage of cargo and this is called – Customary Ullage hence for this excess to be imposed in the policy
  19. For export consignments use as Corrugated Box of at least – 19.25 Kg. Per Sq. Cm.
  20. CF boxes should not be used for – Pilferable Products
  21. “Palletizing” means – is the assembly of one or more packages on a pallet ( platform, usually wooden ) base and properly secured to it
  22. “Unitizing” means – is the assembling of one or more packages or items into a compact load, secured together and provided with skids for easy handling
  23. In LIFTVAN the van part was called ‘Lift van’ and the chassis – was called as “flat”
  24. Lift van main usage is to – inland transit by rail or road
  25. Containerization is a wider application of the concept of – Unitization
  26. FCL means – Full container load and LCL means – Less than a container load
  27. LCL attracts – more premium than FCL
  28. Containers sizes as per International Standard Organization are – 8 or 8.5 feet high by 8 feet wide and 10 or 20 or 30 or 40 feet long
  29. Main standard used is 20 feet in length expressed as TEU means – Twenty Foot Container Equivalent Unit
  30. “Intermodalism” means – is a concept which embraces the rapid movement and transfer of standardized cargo containers by sea, air, and land
  31. TOFC means – Trailer – on – Flatcar
  32. “Piggy – backing” are highway trailers – on specially equipped rail flatcars
  33. COFC means – Container – on – Flatcar
  34. RO-RO means – Roll On, Roll Off
  35. LASH means – Lighters Abroad Ship
  36. Jawaharlal Nehru Port at Nhava Sheva off the coast of Mumbai has one of the most – automated Container Terminal Management Systems in the World
  37. “Unitization between ports” , that is – a “port to port” service
  38. Multi Modal Transportation of Goods Act passed in – 1993
  39. An interesting feature of ICC ( B ) and ICC ( C ) covers is the “impersonal” nature of the risks covered, that is – risks which are closely related to the process of the transit itself and which are largely beyond the control of the assured
  40. Main underwriting of hull insurance in India is performed at Head Office level, except – for insurance of Fishing vessels, Trawlers, Dredgers, Inland and Sailing vessels for which Tariffs are available
  41. Who are the clients for Hull Insurance – Ship owners and Ship Builders 
  42. GRT is calculated by dividing the volume in cubic feet of the ship’s hull – below the tonnage deck, plus all spaces above the deck with permanent means of closing., by 100 
  43. DWT means – Dead Weight Tonnage that means the capacity in tons of the cargo required to load a ship to her load line level
  44. Tonnage for assessing the “other than total loss element of risk” ( often termed “ex TL”) is – GRT or DWT
  45. To retain its CLASS the ship has to go various surveys as – “Special Survey” every four years and Dry Docking Survey for every two years in addition to an Annual Survey afloat
  46. How many type of Sea Vessels – Four and they are General cargo vessels, Dry Bulk Carriers, Liquid Bulk Carriers & Passenger Vessels
  47. All the above further divided into – Ocean Going and Coastal Tonnage vessels
  48. The Ocean going vessel usually in the – 5000  to 15000 GRT range
  49. General Cargo vessels sub divided into – Liners and Tramps
  50. Coastal vessels enter and leave ports more frequently than – Ocean going vessels
  51. VLCC means Very Large Crude Carrier and ULCC means – Ultra Large Crude Carrier used for 75000 to 150000 DWT Tons, 150000 to 300000 DWT tons & 300000 DWT Tons and over respectively
  52. VLCC s are unable to pass through the Suez Canal – when fully laden and they take longer sea passage via the Cape of Good Hope and return in ballast via Suez
  53. How many types of Combination carriers are there – Two types they are OBOs ( Ore/Bulk/Oil) in 70000 to 150000 DWT range and Oil/Ore vessels in 150000 to 250000 DWT Tonnage
  54. Container vessels carrying capacity normally referred to – TEUs ( 20 foot equivalent units, means up to 20 tons capacity ) or FEUs ( 40 foot equivalent units , means up to 40 tons capacity)
  55. LASH and See Bee vessels are mother ships which carry “floating containers” in the form of barges  – up to 1000 tons displacement
  56. Hull Insurance shall be granted – Time Basis or Voyage basis
  57. Time policy maximum period is – 12 months only sec 27 ( 2 ) of the Marine Insurance Act 1963 prohibits granting a Marine policy exceeding a period of 12 months
  58. Voyage policy period is – designated voyage or voyages
  59. Who are introduced Hull Clauses for Time and Voyage Policies – The Institute of London Underwriters
  60. Institute Time clauses  ( 1.10.83 )are as follows:

( i ) Institute Time Clauses – Hulls – Total loss, General Average and three fourths (3/4th) Collision liability

( ii ) Institute Time clauses – Hulls – Total loss only ( including Salvage, Salvage charges, and Sue and Labour )

( iii ) Institute Time clauses – Hulls – Disbursement and Increased Value ( Total loss only, including Excess Liabilities)

( iv ) Institute Time Clauses – Hulls – Excess Liabilities

  1. As per the Termination Clause ( No.4 ) the insurance shall terminate automatically if any of the following occur during the policy period – a. Change of Classification Society  b. Change, suspension, discontinuance, withdrawal or expiry of Class of vessel C. Ownership or flag transfer to new management,  charter on bare boat basis, requisition for title or use of the vessel
  2. If vessel is at Sea such automatic termination shall be deferred until – arrival at her next port of call
  3. When Termination Clause operates a prorate daily net return of – premium is allowed
  4. Assignment Clause ( NO.5 )  requirements for assignment to be valid – ( I ) Notice of assignment must be given to the underwriter  ( ii ) The notice must be dated and endorsed on the policy  ( iii ) The notice must be signed by the assured and the assignor  ( iv ) No claim or return of premium will be paid to an assignee without production  of endorsed policy
  5. Perils will be dealt by – PERILS Clause No.6
  6. Pollution Hazard dealt by – Pollution Hazard Clause NO.7
  7. ¾ th Collision Liability Clause no is – 8
  8. ¾ Collision Liability Clause No.8 Covers loss or damage to other vessel/ship in respect of – Total loss of other ship, Cost of repairing of other ship, Financial loss that is Demurrage of other ship etc
  9. There is no Protection & Indemnity ( P&I) club in India hence the ship owners of India should join P&I Club at – abroad
  10. What are called “calls” – Each member of P&I Club contributes an initial premium based on the tonnage of vessels he has entered in the Club and may be called up on to pay further premiums, termed as “calls” , to enable the club to meet its liabilities and expenses
  11. Fishing vessels should are allowed only 50 nautical miles from shore to sea as per the – Fishing Vessels Tariff and clauses
  12. Under Clause No.22 Returns for Lay-up and Cancellation – pro rata monthly net return for each un commenced month is allowed ( premium )
  13. Under “Premium Installment Clause” , facility for payment of premiums by 4 equal installment is allowed but – full Stamp Duty becomes payable with the first installment
  14.  The TAC has agreed to accept Hull Insurance of all vessels including cargo vessels up to a – value of Rs.10.00 Crores
  15. Discounts on premium for Trawlers  is exceeding 100 GRT, Tugs exceeding 250 BHP and – Barges exceeding 500 GRT if classed with IRS
  16. War Risks Time Policy issued under Government of India War Risks Scheme for Marine Hulls – has no Stamp Duty and the premium can be paid in Quarterly Installments and to be paid in advance
  17. The policy period of the above policy will be – from 1st July to 30th June and if suppose the policy issued other than the above date then the expiry date will be 30th June only
  18. War Risks Scheme came in to force from – 1ST July, 1976
  19. International Maritime Bureau , 1981 ( IMB ) job is – engaged in the prevention of Maritime and Commercial frauds 
  20. The originator of the IMB is – Mr.Eric Allen
  21. FERIT means – Far East Regional Investigation Team
  22. Clause 4.7 of ICC ( B ) & ICC ( C ) excludes “deliberate damage to or deliberate destruction of the subject matter insured or any part thereof by the wrongful act of any person or persons” but if insured wants to cover this he has to pay additional premium and subject to the  – “Malicious Damage Clause” Covers the same
  23. A Pirate who is a Rioter and who attacks the ship from shore, is covered by the Institute Strike  Clauses ( Cargo ) and not by ICC ( A ) and is covered by ICC ( A ) but this Piracy is not covered by – ICC ( B ) & ICC ( C )
  24. “Barratry” means – is defined as including every wrongful act willfully committed by the master or crew to the prejudice of the owner, or, as the case may be, the charterer.  Barratry is associated with Smuggling
  25. Classification of Maritime Crimes are – (a) Scuttling of Ships  (b) Documentary frauds  ( c ) Cargo Thefts  ( d ) Frauds in connection with charters
  26. Scuttling Frauds ( also called Rust Bucket Fraud ) – this involves deliberate sinking of vessels in pursuance of fraud against both cargo and hull interests
  27. D.C.O.P – During currency of policy
  28. A.G.W.I – Atlantic / Gulf / West Indies
  29. a.a. – After Arrival
  30. L.Y.N.D. – Liability not yet determined ( used in collision cases )
  31. N.K.K. – Nippon Kaiji Kyokai ( classification Society )
  32. If a Marine Consignment is being sent to a appreciating market, what clause can be attached to ensure that the appreciation of value of consignment is covered in case of loss – Increased Value Clause
  33. In case of various consignors are affected due to operation of a common peril, for saving a marine adventure, the loss would be apportioned by declaration of – General Average
  34. In case additional expenses are incurred to save an unrelated marine voyage the charges incurred would be recovered under – Sue & Labor Charges
  35. For Inland transit, ‘duration clause’ limits the coverage to – 7 days of arrival of consignment at the destination town
  36. Under a marine Hull cover a loss can be declared as CTL if – the cost of recovery of salvage exceeds the sum insured
  37. Trade Ullage means – Natural loss of fluid
  38. Sue and Labor charges generally paid – in addition to damage to goods and can exceed the sum insured
  39. Franchise in Marine Hull policy means – Claim amount to reach the franchise amount and on exceeding the amount paid in full
  40. In marine Hull policy Freight – has to be insured separately or to be included in the Hull Policy itself
  41. For covering various risks associated with port operation which cover should be given – Port Package Policy, which is an internationally accepted cover
  42. What does the term “Panthom Vessel” in maritime frauds denotes – Non Existent vessels which are shown transporting goods
  43. In which year Marine Insurance business Detariffed  – 1st April, 1994
  44. What is the qualifying Sum Insured of Marine Special Declaration Policy – 300 Lakhs
  45. What are the special discounts available in Marine SDP Policy – Turnover Discount & Good feature discount
  46. Duration clause in Marine Policy for overseas consignment suggest cessation of Risk – reaches consignees Warehouse within forty – five days from the date of discharge at port of destination
  47. For Damage of Cargo monetary claim notice with the SHIP OWNERS should be lodged within – Five days from the date of arrival of cargo
  48. General Average arises when property involved in common Maritime Adventure – Cargo is discharged and or jettisoned to save the ship
  49. Special Storage Risk Insurance Policy does not cover –  ( A ) Consignment dispatches as stock transferred or inter depot transfer by the insured ( B ) Losses attributable to the willful misconduct of the assured  ( C ) Insufficient / unsuitable packing
  50. Recoveries from Third parties are allowed under Marine Policy is under – Doctrine of Contribution & Subrogation
  51. Insurance of Cargo on Sailing Vessels has the following exclusions –  ( A ) General Average Contribution  ( B )  Loss or damage or expenses caused by Inherent Vice  ( C ) Loss or damage or expenses caused by proximately caused by delay in even though delay be caused by a risk insured against
  52. Shipping documents are – Bill of lading, Bill of Entry, Mate Receipt
  53. Bill of Entry is prepared for  – Custom Duty
  54. In cargo insurance the additional insurance is termed a – Increased Value Policy
  55. Cross Liability Clause is not a – Marine Insurance clause
  56. ICC ( C ) does not cover – Earthquake, Volcanic Eruption or Lightning
  57. The maximum indemnity available under a marine open policy in respect of a consignment awaiting shipment at the port is – Limit per Location
  58. RUNNING DOWN Clause relates to – Collision
  59. Liability under “Both to Blame Collision” Clause of ICC (A) has a reference to – BILL OF LADING
  60. Reconditioning cost incurred at an Intermediate Port is an – Extra charge under a Marine cargo policy
  61. Independent of any Contract differentiates the – Salvage Charges from the Sue and Labor Charges 
  62. Shut out cargo” means a Cargo which is – Not loaded on the ship due to late arrival
  63. PPI means – Policy proof of Interest
  64. Marine policy offers – Modified from of Indemnity
  65. Survey fee reimbursable to the Insured in a Marine policy to the extent of – 100%
  66. Loss assessed is not ratably reduced in the proportion of Sum Insured bears to the value at risk is under – Sue and Labor Charges
  67. The following are exclusions under ¾ Collision Clause of ITC-Hulls – Loss of life in other vessel & Loss of life in insured vessel
  68. ¼ Collision Liability is covered by – P & I Club
  69. Partial loss means – Particular Average, Salvage Charges, General Average
  70. Not covered by Marine Hull Policy – Negligence of Master, Officers or Pilot
  71. What differentiates the Marine Insurance Contract from a Wagering Contract – Principle of Insurable Interest
  72. Which of the following information is not reflected on the schedule of Marine Insurance Policy ( Cargo ) – Invoice details issued by Seller
  73. Sellers Contingency Policy cover can be issued in case of – FOB Contract
  74. In case of CIF contract the Insurable Interest of the seller ceases – Once the goods leave the factory gate
  75. “Washing Overboard” Peril not covered by – ICC ( C ) Clause
  76. When GRT is increases then the – Risk will be decreases
  77. If the vessel loaded with full ship of cargo is transported through duly ‘Approved’ Vessel then the – Exclusion of loss/damage/expense arising from insolvency or financial default of the owner, managers, charters or operators of the vessel will be deleted
  78. In which of the following forms of contract, it is the buyer who normally takes the Insurance policy – C&F ( After all goods reach ships rail)
  79. In Marine Insurance, even a voluntary and deliberate loss can be paid under – General Average
ALL THE BEST
“BE AMBITIOUS”
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