Anysshan/marine ins544

Lesson1
Describe the following type of losses in marine insurance: i) total loss (5 marks) ii) partial loss (5 marks) iii) expenses. (3 marks) Explain four (4) benefits of marine insurance. (8 marks) A vessel heavily laden with a cargo consignment comprising auto equipment from Korea collided with another vessel heading in the opposite direction near Pulau Ketam. The cargo which was insured for RMIO million experienced partial damage. The sound value of the cargo if it had arrived safely at the final port of destination was estimated to be RM15 million and the damaged value was now valued at RM12 million. Calculate:i) the percentage of depreciation (2.5 marks) ii) the claim amount (2.5 marks) A cargo consignment of glassware due for New Zealand was insured for RM100,000. The cargo is expected to fetch a sound value of RM150,000 if arrived safely at the final destination. Nevertheless, part of the consignment was found to be damaged due to fire that occurred on board the vessel. The damaged value is estimated at RM90,000. Based on the above information, calculate : i) the percentage of depreciation (5 marks) ii) claims on the partial loss. (5 marks)

Lesson2
Subrogation and contribution principles must be applied in marine insurance policies. Discuss the importance of the application of these principles and illustrate examples of circumstances if subrogation and contribution rights are not applied. (10 marks) Describe the following terms in respect of marine insurance: i) seaworthiness of vessel (5 marks) ii) subrogation (5 marks) iii) valued policy. (5 marks) Marine insurance policy can be classified as an agreed valued policy. Comment on this statement. (5 marks)

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Lesson3
Constructive total loss is a commercial total loss and not an actual physical total loss. What does this mean? (5 marks) Describe a constructive total loss in a hull and cargo loss situation. (5 marks) There are two categories of total loss covered by the Institute Cargo Clause. Describe the circumstances that qualify for such losses. (15 marks A container vessel 'Angkasa' sustained heavy damages when it went aground after colliding with an oil tanker at the South China Sea. After analyzing the losses incurred, the owner decides to claim for constructive total loss. As the insurance broker for the shipping company, advise them on the procedures to be taken before the claim settlement could be made. Explain the implications of filing for a constructive total loss. (10 marks) Explain the relevance of the sue and labor clause in a marine insurance policy. (5 marks) A consignment of computer equipment from Japan would have fetched a sound value of RM200,000 if arrived safely at the final port in Penang. It was insured for RM150,000 with YBWA Insurance company. Unfortunately, the vessel carrying it encountered bad weather, causing damage to the cargo carried before reaching the final destination. The damaged cargo is now valued at RM180,000. Based on the above, calculate :i) the amount of depreciation (3 marks) ii) amount payable by the insurance company.(3 marks) Discuss the main features associated with general average. (14 marks) Explain what is meant by ' loss of specie' and provide an example of such loss.(5 marks) The sue and labour clause is now embodied in the ITC (1983) cl. 13.2. Discuss the provision of this clause. (7 marks) How is a constructive total loss different from an actual total loss? (10 marks) Describe the applications of the principles of subrogation and contribution in the context of marine insurance. Illustrate your answers with examples. (15 marks) Distinguish between general average and particular average and discuss the main features associated with each of them. (13 marks) Define warranty (5 marks) What is the purpose of warranties in marine insurance policies? (5 marks) Provide two (2) examples of express and implied warranties in both marine hull and cargo insurance and explain the implications of non compliance to such warranties. (5 marks) Explain the contents of the relevant clause in the marine insurance policies pertaining to sue and labor charges. (10 marks)

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LESSON4
Two important documents that are used in a contract of carriage are the bill of lading and the charter party: i) Explain the role of these documents (7.5 marks) ii) Discuss the various types and use of the stated documents.(7.5 marks) From the insurer's point of view, why is the classification of a vessel is an important underwriting factor in cargo insurance? (5 marks) Differentiate between charter party and bill of lading. (8 marks) Explain five (5) limitations for an exporter in choosing sea transportation. (10 marks) Identify and explain four (4) underwriting elements in cargo insurance underwriting. (20 marks) Identify and explain five (5) factors that must be seriously considered before selecting a certain mode of transportation. (10 marks) Discuss two (2) benefits and limitations in using the following modes of transportation : i) sea (5 marks) ii) air (5 marks) iii) road(5 marks) How do insurers deal with extra risks? (5marks) How do insurers deal with extra risks in marine insurance? Provide examples. (8 marks) Two important documents that are used in contracts of carriage are the bill of lading and the charter party. Discuss the roles and functions of these documents. (13 marks) Discuss the major distinctions between the bill of lading and charter party. (6 marks)

Lesson5
Explain seaworthiness of vessel under the Hague -Visby rule 1968. (5 marks) Discuss the obligations of the carrier under the Hague Visby Rule 1968. (15 marks Explain the obligations of carriers under the Hague Visby Rule 1968. (12 marks Explain the obligation of the carrier to provide a seaworthy vessel under the Hague - Visby 1968. (7 marks)

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LESSON6
Explain the rationale for having incoterms in international trade. (5 marks) What are incoterms? Why are they important in international trade? (5 marks)

Lesson 7
Use of containers is replacing traditional cargo handling methods. Describe the factors that need to be seriously considered when using containers in the shipment of cargo. (15 marks) Containers are seen as the mode of transportation replacing the traditional mode. What are the benefits to the cargo owners when using containers? (8 marks) Discuss what is meant by the following: i) container must be cargo worthy ii) cargo must be packed for export packing (6 marks) Although containerization has helped to reduce cargo losses, it does have certain setbacks. Discuss the problems associated with containerization. (6 marks) Outline the general procedures of stowage in the containerization of cargo. (5 marks)

Lesson8
Define marine underwriting. (2 marks) Explain any two (2) underwriting factors that will affect the judgement of cargo insurance underwriters to avoid adverse selection.(10 marks) Besides the classification of the vessel, explain four (4) important underwriting factors to be considered in the cargo underwriting process. (15 marks)

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Lesson9
Marine cargo insurance policies basically cover most maritime risks and also land risks, such as derailment and overturning of land conveyance. Explain why this is so. (5 marks) The "Sue and Labour" clause is replaced by the "Duty of Assured" clause under theITCHulls(1983). Explain the provision of this clause. With reference to the Institute Cargo Clause, the Institute of War Clause and the Institute of Strike Clause, state briefly whether the following losses are covered and if so under which clause: i) Cargoes were robbed by armed robbers whilst on the way to the seller's warehouse. (4 marks) ii) Workers in protest over salary revision set fire to the warehouse at the port damaging most of the cargo. (4 marks) iii) Due to insufficient funds, the carrier could not leave on the scheduled date. This resulted in loss in the value of the cargo. (4 marks) iv) Vessel carrying immigrants was mistaken for a pirate ship and was attacked by marine patrol. Many of the immigrants on board were injured. (4 marks) v) The lorry carrying the cargo overturned causing massive damage to the cargo carried. The lorry was leaving to a warehouse in Tanjung Malim instead of the warehouse in Petaling Jaya initially stated in the policy. (4 marks) On arrival at the port of destination, a consignment of fresh fruits from China was found to be badly damaged. The cargo was insured under the Institute Cargo Clause A (ICC A). Upon inspection, the loss surveyor concluded that the cause of damage was due to inadequate and insufficient packaging. With reference to the ICC A, will the insured be successful in obtaining compensation from the insurer? Justify your answers. (5 marks) With reference to the Transit Clause (Clause 8) of the Institute Cargo Clause, discuss whether the following losses are covered : i) Goods damaged when one of the workers accidentally dropped it whilst loading it onto the container lorry before leaving for the port of shipment. (3 marks) ii) The security guard at the warehouse at the port of shipment left a lighted cigarette butt causing a major fire damaging a substantial portion of the cargo. (3 marks) iii) The container carrying the cargo overturned damaging some of the cargo carried. The incident happened when the container was on its way to the buyer's warehouse. (3 marks) iv) The cargo was accidentally dropped during the loading process onto a lighter. (3 marks) v) The container was hijacked whilst on its return after discharging cargo at the port. (3 marks)

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Lesson 10
Explain why the following losses are excluded under the relevant Institute Cargo Clause: i) insolvency or financial default of carrier (5 marks) lesson 10 ii) improper or inadequate packing (5 marks) lesson 10 Explain why the following losses are excluded in cargo policies subject to ICC: i) inherent vice and nature (4 marks) ii) inadequate and insufficient packing. (4 marks)

Lesson 11
The vessel "Diamond" which was insured for RM4 million was on a consignment to Guangzho when it collided with another cargo carrying vessel "Luxury" near the port of Shenzen. The insured value for "Luxury" was RM10 million. Both vessels suffered severe damages in the incident. Based on the adjuster's report, the vessel "Diamond" was found to be the negligent party in this tragedy. With reference to the Collision Liability Clause, describe whether the following losses are payable under the hull insurance policy of the negligent vessel . In cases where the losses are payable, calculate the amount compensated by the insurer. In cases where it is not insurable, provide options where compensation can be made. (Assuming that there is no deductible applied, treat each case separately). i) Both vessels had to be entered into dry dock; "Diamond" incurring fees of RM6 million whilst Luxury incurred RM1 million. (4 marks) ii) Divers were hired to trace the missing anchor belonging to Luxury. Cost incurred was RM1 million. (4 marks) iii) Several crew members from both vessels suffered injuries in the incident. Total hospital charges were estimated at RM50.000. (4 marks) iv) Massive pollution resulted from the collision. Cost to clean up the debris amounted to RM4 million.(4 marks) v) Cargoes carried on both vessels were damaged as a result of the collision. The owners of the cargo on the vessel "Diamond" is claiming for losses amounting to RM10 million whilst the cargo owner of cargo carried on "Luxury" is filing for RM8 million in losses. (4 marks)

Anysshan/marine ins544 The vessel "Sunrise" which was insured for RM1 million was on a voyage to New Zealand when it collided with another vessel "Winner" near the port of Auckland. Both vessels suffered severe damage in the incident. Based on the adjuster's report, the vessel "Sunrise" was found to be the negligent party in this tragedy. With reference to the "Collision Liability" clause, describe whether the following losses are payable under the hull insurance policy of the negligent vessel. Where the losses are payable, calculate the amount to be compensated by the insurer. (Assuming that no deductible is applied, treat each case separately). i) The vessel "Winner" incurred dry dock fees of RM60.000. (3 marks) ii) Towage costs of both the vessels to safety amounted to RM1 million. (3 marks) iii) Both vessels suffered particular average losses. Machinery parts amounting to RM8 million had to be replaced by the owner of "Winner" whilst "Sunrise" incurred losses amounting to RM200, 000. (3 marks) iv) Atan, a crew member of "Sunrise", was injured in the incident. He is claiming RM50.000 in damages. (3 marks) v) Cargoes carried on both vessels were damaged as a result of the collision. The owners of the cargo on the vessel "Winner" is claiming for losses amounting to RM10 million whilst the cargo owner of cargo carried on "Sunrise" is filing for unspecified losses. (3 marks) vi) Oil leakage from the damaged vessels caused a major environmental disaster. Cleaning up costs was billed at RM3 million. (3 marks) A vessel insured with MXI Insurance Company had its policy terminated. The reason given by the insurer was related to the classification of the vessel. Discuss the relevant provision under the ITC- Hull policy pertaining to this issue. (8 marks) The following losses were incurred in a collision between Vessel X and Vessel Y. Justify whether the claims below are recoverable under the marine hull policies of both the vessels (assuming in this case Vessel X is the negligent party). i) Towage costs were incurred by the hull owners since both the vessels had to be repaired at the dry docks.(4 marks) ii) A crewman on Vessel Y was badly injured and had to be rushed by helicopter to the nearest hospital. Emergency and hospital expenses estimated to be at least RM30.000.(4 marks) iii) Oil slick from the collision caused massive pollution. Cleaning up costs was billed at RM 1 million.(4 marks) iv) Part of Vessel X valued at RM50,000 was jettisoned from the main vessel to prevent the vessel from capsizing.(4 marks) v) Vessel Y's anchor was missing during the commotion. Divers had to be engaged to trace the loss anchor. The divers are claiming for RM50.000(4 marks)

Anysshan/marine ins544 A vessel "Kunang" is insured for RM15 million under the Institute Time Clause 1.10.83 with a deductible of RM50.000. During the voyage between Singapore and Malaysia, "Kunang" negligently collided with another vessel. The following losses were discovered as a result of the collision. Discuss whether the following losses would be recoverable under the Collision Liability Clause of the Institute Time Clause 1.10.83. i) Cost to clean up oil spill amounting to RM1.8 million. (5 marks) ii) Cargo damage carried on the vessel estimated at RM800,000. (5 marks) iii) Bodily injuries to nine of Kunang's crew resulting in claims of RM45,000. (5 marks) iv) Dry dock expenses of RM16,000 incurred by Kunang. (5 marks) v) Damage to the vessel estimated at RM3.8 million. (5 marks) In a collision incident at the Panama Canal between the vessel 'Star Cruise' and the passenger liner' Cleopatra', damage was occasioned to the latter. Claims made by 'Cleopatra' are as follows:I) salvage charges RM 400,000 ii) removal of wreckage fees RM 2,000,000 iii) cleaning of oil slick RM 6,000,000 iv) compensation for injuries to crew and passengers RM10,000,000. The vessel 'Star Cruise' which was insured for RM 10,000,000 under the ITC-Hull policy was found to be negligent in this incident. Explain whether the claims above are payable under its hull insurance policy and if so, what would be the amount? If the claims are not payable, state the reason why and under what policy would they be payable? (Treat each claim separately.)(10 marks)

The Collision Liability cover can be found in clause 8 of the Institute Time Clause 1983. Explain the scope of cover under this clause. (7.5 marks) The Collision Liability Clause does not cover certain liability of the assured. Explain these instances of liability. (7.5 marks) The "Collision Liability" clause under the ITC- Hull policy compensates the insured for liability claims due to collision. Explain the application of this clause and provide your answers with an example. (9 marks) Discuss the relevant clauses in both cargo and hull insurances with respect to the importance of classification of vessels. (15 marks)

Anysshan/marine ins544 Discuss the important information that can be considered as "material facts" to be disclosed by a proposer of hull insurance. (9 marks) There are certain risks faced by shipowners that are not covered under the traditional hull insurance policies. Identify and explain any three (3) of such risks. (6 marks) (war, strike, malicious, nuclear) Discuss how ship owners safeguard themselves against the above risks. Describe the operation of such association. (10 marks)

The Collision liability Clause under the ITC-Hull policy compensates the insured for liability claims due to collision. Explain the scope and exclusion of this clause. (13 marks) Explain the implications of the Termination Clause of the Institute Time Clause Hull 1.10.83. (10 marks) A vessel is insured under the Institute Time Clause-Hull 1.10.83 for RM10 million, with a deductible of RM50,000. The following losses were encountered by the shipowner due to collision caused by the negligence of its captain. Justify whether these losses would be recoverable under the Collision Liability Clause of the policy. (Treat each case separately) i) Damage to insured vessel amounting to RM2 million (2 marks) ii) Salvage charges of RM100,000 incurred when towing insured vessel to safety (2 marks) iii) Cost to clean up oil spill RM1.5 million (2 marks) iv) Cargo damage carried on the other vessel estimated at RM500,000 (2 marks) v) Dry dock expenses of RM200.000 incurred by the other vessel and RM50.000 by insured (2 marks) vi) Injuries to crew of insured vessel resulting in claims of RM300.000 (2 marks)

Why are deductibles inserted in marine policies? (5 marks)

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Lesson 12
Justify as to why the following information is material in the underwriting of hull insurance:i) type and trade of vessel (4 marks) ii) age and valuation of vessel. (4 marks) Discuss the relevant clauses in both cargo and hull insurances with respect to the importance of classification of vessels. (15 marks) A practical trainee student is assigned to the marine underwriting department to examine the underwriting factors of marine hull insurance. In her report she is to discuss four (4) main factors in the assessment of hull underwriting. Describe these factors. (20 marks) Marine cargo insurance, unlike motor insurance, is not compulsory but is deemed necessary. Explain two (2) benefits derived from having marine cargo insurance. (5 marks) Classification societies play an important role in marine hull insurance. Discuss their functions with respect to the underwriting of vessels. (5 marks) Why are the following information important in the underwriting of hull insurance? i) Classification of vessel (4 marks) ii) Type and trade of vessel (4 marks) iii) Valuation of vessel. (4 marks) What role does the 'slip' play in marine underwriting? What information are listed in the 'slip'? (10 marks) A vessel insured with Hippy Insurance Company had its policy terminated. The reason for the termination was related to the classification of the vessel. Discuss the relevant provision under the ITC- Hull policy pertaining to this issue.(7.5 marks)

LESSON 13
Discuss the contributions of the following associations to the marine insurance industry: i) Protection and Indemnity Club (5 marks) ii) Institute of London Underwriters. (5 marks) Discuss the contributions of the following associations to the marine insurance industry: i) Lloyds Register of Shipping (5 marks) ii) Salvage Associations.(5 marks) Explain the role of the Protection & Indemnity Clubs and list the risks commonly insured by these clubs. (10 marks) Discuss the role of Salvage Associations in the marine insurance market. (9 marks) 10