CPCU 551 Flashcards – Module 8
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[h] CPCU 551 – Module 8
[q] Inland marine insurance
[a] Insurance that covers different classes of property that usually involve some element of transportation.
[q] Marine insurance
[a] Insurance that includes both inland and ocean marine coverage.
[q] Nationwide Marine Definition
[a] A definition adopted in 1933 by the National Association of Insurance Commissioners (NAIC ) used to determine which property could be insured on inland marine and ocean marine insurance forms.
[q] Types of coverage that can be classified as marine
[a] Types of property:
Imports, exports, and domestic shipments.
Instrumentalities of transportation and communication, such as bridges, docks, pipelines, and power lines.
Jewelry, furs, musical instruments, silverware, coin collections, and stamps.
Various types of business property.
[q] Ocean marine insurance
[a] Insurance that covers vessels and their cargo.
[q] Filed classes of business
[a] Inland marine insurance in which policy forms and rates must be filed with the state insurance department.
[q] Characteristics of filed classes of inland marine insurance
[a] Characteristics:
Large number of insureds.
Reasonably homogeneous loss exposures.
Many perils are covered.
[q] Nonfiled classes of business
[a] Inland marine insurance in which policy forms and rates are not filed with the state insurance department.
[q] Characteristics of nonfiled classes of inland marine insurance
[a] Characteristics:
Relatively small number of insureds.
Diverse loss exposures.
[q] Shipper
[a] An organization that is shipping goods. The same organization is also often the seller of the goods.
[q] Consignee
[a] An organization that receives property being transported by a carrier.
[q] Carrier
[a] A party that transports goods and is often legally liable for loss or damage to the goods in its custody.
[q] FOB Point of Origin
[a] Terms of sale in which the risk of loss passes from the seller to the buyer when the goods are accepted by the carrier for transit.
[q] FOB (Free on Board) Destination
[a] Terms of sale in which the risk of loss passes from the seller to the buyer when the goods are delivered to the buyer’s premises.
[q] Ex Point of Origin
[a] Terms of sale, applicable to international commerce, in which the buyer is responsible for any loss that occurs after taking delivery of goods.
[q] Free on Board (FOB) Vessel
[a] Terms of sale, applicable to international commerce, in which the buyer assumes responsibility for loss as soon as the goods are placed aboard the vessel at the port named in the terms.
[q] Free Along Side (FAS) Vessel
[a] Terms of sale, applicable to international commerce, in which the buyer assumes responsibility for loss as soon as the goods are placed alongside the vessel at the port named in the terms.
[q] Cost, Insurance, Freight (CIF)
[a] Terms of sale, applicable to international commerce, in which the buyer assumes responsibility for loss as soon as the goods are placed into the custody of the ocean carrier or delivered on board the vessel.
[q] Common carrier
[a] An organization that offers transportation services to the general public. Includes airlines and trucking companies.
[q] Contract carrier
[a] An organization that furnishes transportation services to shippers with whom they have contracts.
[q] Act of God
[a] A natural catastrophe that interrupts the expected course of events.
[q] Inherent vice
[a] A destructive condition within property.
[q] Bill of lading
[a] A document, given by the carrier, acknowledging receipt of goods from the shipper.
[q] Chartering
[a] Contract carriage by water.
[q] Annual transit insurance
[a] Insurance that covers all shipments made by the insured throughout a one-year policy period.
[q] Annual transit insurance exclusions
[a] Typical exclusions:
Contraband.
Precious metals.
Furs and jewelry.
Money and securities.
Imports if covered under ocean marine policy.
[q] Trip transit insurance
[a] Insurance that covers a particular shipment of goods specified in the policy.
[q] Motor truck cargo liability insurance
[a] Insurance that covers the insured’s legal liability as a motor carrier for loss to customers’ property in its custody.
[q] Owners’ goods on owners’ trucks insurance
[a] A type of motor truck cargo policy that covers any type of organization for damage to its own cargo while being transported on its own trucks.
[q] Open cargo insurance
[a] Insurance that is designed for frequent shippers. Covers loss to property shipped overseas primarily by water or air.
[q] Assured
[a] The named insured under an ocean marine policy.
[q] General average
[a] An expenditure or sacrifice of part of the vessel or cargo, made in a time of danger, to save the voyage.
[q] Sue and labor clause
[a] A clause that covers the cost of reasonable measures the insured is required to take to protect property from damage at the time of a loss.
[q] Warehouse-to-warehouse coverage
[a] A clause in an open cargo policy that covers insured cargo from the time the cargo leaves the point of shipment until it is delivered.
[q] lnchmaree clause
[a] A clause in an open cargo policy that adds coverage for loss resulting from the bursting of boilers, latent defects in the vessel, and errors in the navigation of the vessel.
[q] Assailing thieves
[a] A common peril found in an ocean cargo Perils clause that refers to the theft of cargo by force. Does not include theft by the passengers or the crew.
[q] Jettison
[a] A common peril found in an ocean cargo Perils clause that refers to the voluntary throwing overboard of cargo in an emergency.
[q] Barratry
[a] A common peril found in an ocean cargo Perils clause that refers to any wrongful act willfully committed by the master or crew with criminal intent.
[q] Free of capture and seizure warranty
[a] A warranty that excludes loss by war, piracy, mine, torpedo, or taking of the vessel.
[q] Strikes, riots, and civil commotion warranty
[a] A warranty that excludes loss by riot, labor dispute, vandalism, or sabotage.
[q] Delay clause
[a] A clause that excludes coverage for loss caused by shipment delay, such as spoilage or business interruption.
[q] Accumulation clause
[a] A clause in open cargo policies that doubles the policy limit when shipments accumulate at some point in transit.
[q] Contractors equipment floater
[a] A policy that covers mobile equipment or tools located anywhere in the coverage territory. Represents the largest class of commercial inland marine insurance.
[q] Builders risk policy
[a] A policy that covers:
A building under construction.
Temporary structures at the building site.
Uninstalled building materials.
[q] Installation floater
[a] A policy that covers a contractor’s interest in building supplies or fixtures that the contractor has been hired to install.
[q] Warehouse operator’s legal liability policy
[a] A policy that covers warehouse operators against liability for damage to the property of others being stored in the warehouse.
[q] Bailees’ customers policy
[a] A policy that covers loss to customers’ property regardless of whether the bailee is legally liable for the loss.
[q] Processing floater
[a] A policy that covers property a subcontractor is actually working on.
[q] Dealers policy
[a] A policy that covers the inventory and other property of any of the types of dealers that qualify for inland marine coverage.
[q] Types of dealers eligible for inland marine Dealer policies
[a] Eligible:
Jewelers.
Equipment dealers.
Fine arts dealers.
Furriers.
Camera dealers.
Musical instrument dealers.
Stamp and coin dealers.
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