CPCU 552 Flashcards – Module 8
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[h] CPCU 552 – Module 8
[q] Primary marine liability loss exposures
[a] Primary marine liability loss exposures:
Injury or illness.
Property damage.
Pollution.
[q] Factors potentially leading to liability for injury or death of crew members
[a] Liability can be based on:
The vessel owner’s obligation to provide maintenance and cure.
The vessel owner’s warranty of seaworthiness.
The Merchant Marine Act of 1920.
The Death on the High Seas Act.
General maritime law.
[q] Types of property damage a vessel owner can be liable for
[a] A vessel owner may be liable for:
Damage to other vessels and their cargoes.
Cargo owned by ochers on board the vessel.
Structures on or near the water.
[q] Freight
[a] The compensation a carrier receives for transporting cargo.
[q] Harter Act
[a] A U.S. statute that governs domestic shipments. Under the Act, a carrier is liable for cargo losses if the carrier failed to make the vessel seaworthy when the voyage began, even if the cargo loss was not caused by the unseaworthy condition.
[q] Tramp shipping
[a] Ocean shipping by cargo vessels that have no fixed schedule of sailings.
[q] Voyage charterer
[a] A shipper that charters a vessel for a particular voyage.
[q] Time charterer
[a] A shipper that charters a vessel for a specified time period.
[q] Charter party
[a] The contract of carriage used for tramp shipping.
[q] General average
[a] Partial loss that must, according to maritime law, be shared by all parties to a voyage (cargo owners and vessel owner).
[q] York-Antwerp Rules
[a] An international code that governs general average. These rules do not have the force of law.
[q] Protection and indemnity insurance
[a] Insurance that covers various liability claims resulting from operation of a vessel. Similar to auto insurance liability coverage.
[q] Hull insurance
[a] Insurance that covers physical damage to vessels, including machinery and fuel. Does not cover cargo.
[q] P&l Insurance coverages
[a] Coverages include:
Defense costs.
Bodily injury.
Property damage.
Unique coverages.
[q] P&l Insurance bodily injury coverages
[a] Coverages include:
Loss of life, injury, and illness.
Repatriation expenses.
[q] P&l Insurance property damage coverages
[a] Coverages include:
Other vessels – collision.
Other vessels – not caused by collision.
Property other than vessels.
Wreck removal expenses.
Cargo of others.
[q] P&l Insurance unique coverages
[a] Coverages include:
Fines and Penalties.
Cost of resisting mutiny/misconduct.
Quarantine.
Putting-in expenses.
Cargo’s proportion of general average.
[q] P&I policy general exclusions
[a] General exclusions:
War or vessel seizure or detention.
Towage of any other vessel, unless the purpose is to assist a vessel in distress.
Liability exceeding the liability that would be imposed by law in absence of a contract.
[q] Hull policy exclusions
[a] General exclusions:
Cargo.
Cargo containers.
Passengers’ or crew’s property.
Barges.
[q] Hull policy coverages
[a] Coverage is usually provided for:
Perils of the seas.
Fire, lightning, and earthquake.
Assailing thieves.
Jettison.
Barratry.
All other like perils.
[q] Bareboat charterer
[a] A charterer that agrees to be responsible for actually operating and insuring the vessel.
[q] Hull policy – amount payable for partial losses
[a] Amount payable is limited to the reasonable cost to repair the vessel using new materials, not to exceed the amount of insurance.
[q] Barratry
[a] Serious misconduct by a vessel’s master or crew that is contrary to the owner’s interest.
[q] Salvage
[a] The service rendered by those who rescue a ship or cargo from peril and restore it to its rightful owners.
[q] Sue and labor clause
[a] A clause found in a hull insurance policy that covers the cost of reasonable measures to protect property from damage at the time of loss.
[q] General average and salvage clause
[a] A clause found in a hull insurance policy in which the insured pays the assured’s contributions to general average and pays for salvage.
[q] Collision liability clause
[a] A clause found in a hull insurance policy providing that collision liability claims are payable subject to a separate amount of insurance equal to the policy limit.
[q] Towers liability coverage
[a] Optional coverage that can be added to a hull policy by endorsement for tugs or towboats . The endorsement broadens the collision liability clause to cover damage to other vessels or structures resulting from collision by the insured vessel or a barge being propelled by the insured vessel.
[q] Marine builders risk policy
[a] A specialized type of marine insurance that covers the builder or owner of a vessel during the course of its construction. Coverage is provided for physical loss of or damage to the vessel and related property.
[q] Ship repairers liability policy
[a] A specialized type of marine insurance that covers bailee liability loss exposure to the shipyard from the possession and repair of vessels.
[q] Terminal operators liability policy
[a] A specialized type of marine insurance that covers the bailee liability loss exposures of an owner of a facility for docking and loading vessels.
[q] Marina operators liability policy
[a] A specialized type of marine insurance that covers liability for damage to boats in the care of the operator.
[q] Boat dealers policy
[a] A specialized type of marine insurance that covers both property and liability loss exposures of boat dealers.
[q] Marine coverages for offshore oil and gas facilities
[a] Available coverages include:
Builders risk coverage.
Physical damage coverage after property becomes operational.
Loss of business income coverage.
Wreck removal coverage.
Coverage for the costs of controlling well blowouts.
P&I and other liability coverages.
[q] General aviation sector
[a] A sector of the aviation industry that consists of all civil aviation that does not involve passenger airlines.
[q] Airline sector
[a] A sector of the aviation industry that consists of major and national airlines.
[q] Aviation manufacturing and distribution
[a] A sector of the aviation industry that consists of manufacturers of general aviation and airline aircraft, engines, and equipment.
[q] Airports and fixed base operators sector
[a] A sector of the aviation industry that consists of airports and repair operations.
[q] Pool
[a] A group of organizations that band together to insure each other’s loss exposures.
[q] Common elements of aviation loss exposures
[a] Common elements:
Catastrophic loss potential.
Limited spread of risk.
Legal foundations of aircraft liability.
[q] Legal foundations of aircraft
[a] In general, the liability of an aircraft owner is determined according to the law of the state where an aircraft accident occurs or the state that has the most significant legal relationship with the accident or parties involved.
[q] Purpose-of-use categories
[a] Categories of airplane use that are used in aviation insurance classification and rating.
[q] Typical insurance coverages available for general aviation sector
[a] Typical coverages:
Liability coverage on owned aircraft.
Coverage for use of nonowned aircraft.
Physical damage coverage on owned aircraft.
Medical expense coverage.
Passenger voluntary settlement coverage.
[q] All-risks – ground and flight coverage
[a] A type of aircraft hull insurance that provides all-risks coverage whether or not the aircraft is in flight at the time of the loss.
[q] All-risks – not in motion coverage
[a] A type of aircraft hull insurance that provides all-risks coverage only while the aircraft is on the ground and not moving under its own power.
[q] All-risks – not in flight coverage
[a] A type of aircraft hull insurance that provides the same coverage as all-risks – not in motion coverage, plus also provides coverage while the aircraft is taxiing.
[q] Agreed value coverage
[a] An approach to physical damage coverage that represents an agreement between the insurer and the insured as to the value of each insured aircraft.
[q] Passenger voluntary settlement coverage
[a] Coverage available under aircraft insurance policies that provides scheduled benefits if a passenger suffers death, dismemberment, or loss of sight.
[q] Small Unmanned Aircraft Systems Regulations (Part 107)
[a] A Federal Aviation Administration regulation that contains the operational rules for the commercial use of unmanned aircraft systems weighing less than 55 pounds.
[q] Small Unmanned Aircraft Systems Regulations (Part 107) requirements
[a] Requirements:
Operations must take place in daylight only.
Flights near major airports require Air Traffic Services’ approval.
Operations cannot take place from a moving vehicle.
No flights may take place over persons not directly involved in the operation.
Operators must meet specific qualifications.
Ground speed may not exceed 100 mph.
Altitude may not exceed 400 feet.
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