Test 2

Question 1

Partial loss is known as

Answer 1

Average

Question 2

What are the two types of average?

Answer 2

General and particular

Question 3

What are the three types of total loss?

Answer 3

Destruction
Loss of specie
Irretrievable deprivation

Question 4

Example of loss of specie

Answer 4

Cement dampened by seawater becomes concrete

Question 5

A total loss may be either an

Answer 5

Actual total loss

Constructive total loss

Question 6

A voyage policy covers

Answer 6

Generally applies to cargo from one port or place to another

Question 7

Time policy traditionally covers for

Answer 7

12 months, but can go to 18

Question 8

A mixed policy covers subject matter insured for a

Answer 8

Voyage and a period of time either before, after, or during the voyage

Question 9

A long term contract in which underwriters agree to cover all the assured’s shipments as described and to destinations specified during the period of the contract

Answer 9

Open policy

Question 10

A policy that doesn’t specify any value and the Insurable value has to be determined iaw section 16 of MIA 1906

Answer 10

Un valued policy

Question 11

The value at which the ship or goods is valued is

Answer 11

Insured value

Question 12

The total of the insurers subscriptions to the insurance and is therefore the maximum amount payable in respect of a claim is the

Answer 12

Sum insured

Question 13

The contract of marine insurance is a contract of

Answer 13

Indemnity.

The goal is to place the assures where they were as if no loss occurred

Question 14

When a ship is damaged, but not totally lost, the measure of indemnity is the

Answer 14

Reasonable cost of repairs, less the customary deductions, but not exceeding the sum insured.

Question 15

Freight formula

Answer 15

Freight at risk - freight paid / freight at risk x 100= percentage x sum insured loss= claim

Question 16

Freight is invariably insured by an

Answer 16

Unvalued policy

Question 17

When freight is prepaid it is agreed in contract of carriage that it is non returnable in the event of non delivery. Under such contract, the freight is

Answer 17

At the risk of the shipper

Question 18

Salvage service rendered is on the principle of

Answer 18

No cure-no pay

Question 19

No cure-no pay means

Answer 19

The salvor receives no reward if they are unsuccessful and they bear any costs of damage to their own property

Question 20

A maritime salvor has a

Answer 20

Lien on salved property, but this does not grant him proprietary rights.

Question 21

A lien prevents the

Answer 21

Owner from occupying or using the salved property until a deposit or award is made

Question 22

A salvage service given voluntarily by a third party independently of contract, and is successful in preserving or saving property exposed to maritime perils.

Answer 22

Pure salvage

Question 23

Subrogation is

Answer 23

The transfer of rights and duties

Question 24

What rights is the insured entitled to upon payment of a claim for partial loss?

Answer 24

Rights of subrogation against third parties. Recovery limites to 100% of the claim paid. Excess of this must go to assured.

Question 25

What rights is the insurer entitled to upon payment of a total loss claim?

Answer 25

Same as partial loss, but also proprietary rights of abandonment and any amount recovered in respect of the property is unlimited

Question 26

The amount of compensation determined by the courts when negligence is the cause

Answer 26

Tort

Question 27

The guilty party in a tort

Answer 27

Tortfeasor

Question 28

Contractual liability involves the

Answer 28

Agreement of two parties

Question 29

Liability arising outside a contract is known as

Answer 29

Third party liability.

Loss of life or damage to property is caused by negligence by someone not party to a contract with the insured party.

Question 30

Who can be at fault in a collision?

Answer 30

Neither vessel (force majeure)
One vessel
Both vessels

Question 31

An act where any extraordinary sacrifice or expenditure is voluntarily and reasonably made or incurred in time of peril for the purpose of preserving the property imperiled in the common adventure.

Answer 31

General average

Question 32

Three basic interests in general average

Answer 32

The ship and its appurtenances
Cargo
Freight

Question 33

A general average act may be a

Answer 33

Sacrifice, expenditure, or both

Question 34

General average is an action taken to

Answer 34

Preserve all interests involved in a marine adventure when such an adventure is threatened by a common peril

Question 35

What are the four essential features of general average?

Answer 35

Extraordinary sacrifice or expenditure
Voluntary
Reasonable
Imperiled in the common adventure

Question 36

In regards to general average; whatever measures are taken by way of sacrifice or expenditure, they must be

Answer 36

Successful