实务-练习题与答案

Chapter 14
一．C hapter Summary
1.Perils of the sea include natural calamities and fortuitous accidents. Extraneous risks are risks
other than perils of the sea, including general extraneous risks and special extraneous risks. 2.Ocean average covers total loss and partial loss. Total loss includes actual total loss and
constructive total loss while partial loss includes particular average and general average.
Particular average is the accidental damage to part of the cargo and is levied on a group of cargo owners and not all of the cargo owners. A general average is a loss caused by or directly consequential on a general average act which must be extraordinary, voluntarily and reasonably made in time of peril and successful. General average requires all parties concerned in the venture to contribute to compensate the losses caused to those whose cargo has been lost and damaged.
3.Sue and Labor expenses are extraordinary expenditures made in time of peril to avert or
minimize any loss of or damage to the subject matter insured. Salvage charges mean charges recoverable by salvor independently of contract.
4.Extraneous losses are losses resulted from risks not incidental to transport by sea, including
losses caused by general extraneous risks and special risks.
5.The Ocean Marine Cargo Clause of the PICC provides two types of insurance covers: basic
cover and additional cover. Basic cover includes FPA, WPA, and All Risks. Additional cover includes general additional covers and special additional covers.
6.Basically FPA eliminates coverage for partial losses resulted from natural calamities while
WPA covers such losses. All Risks provides the widest insurance cover.
7.W/W clause is a marine cargo insurance policy provision that extends the protection from the
warehouse at which the shipment originates to the one at which it terminates.
8.General additional risks cover the damage or losses arising from general additional reasons,
including Risk of Theft, Pilferage and Non-Delivery (TPND), Risks of Fresh Water and/or Rain Damage (FWRD), Risks of Clash and Breakage, Risks of Leakage, Risks of Shortage, Risks of Intermixture and Contamination, Risks of Taint of Odour, Risks of Sear and Heating, Risks of Breakage of Packing and Hook Damage.
9.Special additional risks cover the damage or losses arising from special additional reasons
such as political events, military affairs, national policies and acts, and administrative measures. The special additional risks include War Risk, Strike Risks, Failure to Delivery Risks, Import Duty Risks, On Deck Risks, Rejections Risks, Aflatoxin Risks, Fire Risks Extension Clause (FREC).
10.The new ICC provides five clauses, namely: Institute Cargo Clause A or ICC(A), Institute
Cargo Clause B or ICC(B), Institute Cargo C or ICC(C); Institute War Clause (Cargo) and Institute Strikes Clause (Cargo). The widest insurance cover is provided under ICC(A), a more restrictive cover is under ICC(C).
11.In FOB, CFR or FCA, CPT contracts, the insurance clause may simply be stipulated as:”
Insurance: To be Covered by the Buyer.” In CIF or CIP contracts, the clause should clearly state the party who takes out insurance, the risks covered, the insurance amount as well as the insurance clauses adopted.
12.When export transaction is made on CIF and CIP basis, the Chinese exporter shall arrange
specific insurance policy. It is customary to insure for CIF or CIP value of the shipment, plus 10% of CIF value.
13.When import transaction is made on FOB, CFR, FCA and CPT basis, the Chinese importer
shall take out insurance. In such case, a marine cargo open policy is often underwritten.
14.Claim procedure involves applying for survey, claiming for damages, taking proper measures
and preparing documents for claim.
二．Review Questions
A.Briefly define the concepts
1.actual total loss
2.constructive total loss
3.particular average
4.general average
5.general act
6.sue and labor expenses
7.W/W clause
8.open policy
B.Questions and problems
1What are the three basic insurance in CIC? What are the differences between them/
2What are the differences between general average and particular average?
3In the event of loss or damage for which the insurer may be liable, what should the insured or their agents do to claim for losses?
C.Multiple-choice questions
1.As a type of perils of the sea, tsunami is ＿
A. a natural calamity
B. a fortuitous accident
C.an additional risk
D. a general extraneous risk
2.As a type of perils of the sea, being stranded is ＿
A. a natural calamity
B. a fortuitous accident
C.an additional risk
D. a general extraneous risk
3.In ocean transit, sacrifices resulted from the jettisoning of some cargoes on a ship to keep the
ship afloat during a storm are ＿
A. a general average
B. a particular average
C. a total actual loss
D. a constructive total loss
4. In ocean transit, when the subject matter insured is irretrievably deprived thereof, there is＿
A. a constructive total loss
B.an actual total loss
C. a general average
D. a particular average
5. a ocean transit, the subject matter insured – a precision instrument amounting to US ＄1000,000 was badly damaged. The cost of recovering it would be US＄120,000. In such case, the loss was ＿
A. a constructive total loss
B.an actual total loss
C. a partial loss
D. a total loss
6.When there is a general average, the party on whom it falls is entitled to a ratable contribution
from the other parties interested. Such a contribution is called ＿
A. a total loss contribution
B. a partial total loss
C. a particular average contribution
D. a general average contribution
7.The losses caused by theft in ocean transit are recoverable if the goods had been insured
against＿
A.FAP
B.WPA
C.ALL RISKS
D.any of the general additional insurance in the ICC
8.Which of the following risks is/are covered by ALL RISKS?
A.War
B.Strike and delay
C.TPND
D.Aflatoxin and on deck
9.Which of the following does not cover partial loss or damage caused by natural calamities?
A.WA
B.FPA
C.ALL RISKS
D.ICC(A)
10.Which of the following is NOT an exclusion of ICC(A)?
A.Civil war
B.Ordinary leakage
C.Unsuitable packing
D.Wrongful act of any person than other the assured
11.The widest insurance coverage in ICC is ＿
A.ICC(A)
B.ICC(B)
C.ICC(C)
D.ICC(D)
12.If the insured amount is not clearly stated in CIF contract, it is customary to insure for＿
A.100% CIF price
B.110% CIF price
C.115% CIF price
D.120% CIF price
D. True or false questions
1. The losses shall be admitted as general average if they are a direct consequence of a general average act.
2. General average and salvage charges are covered in both FPA and W A.
3. Warehouse to warehouse clause is a shipment clause meaning that the carrier is responsible for shipping the goods from the seller’s warehouse to the buyer’s warehouse.
4. Both general additional risks and special additional risks in the Ocean Marine Cargo Clause of the PICC can be covered independently.
5. ICC(C) does not cover risks of war, strike, but covers loss of or damage to cargo caused by earthquake.
6. The exclusions of ICC(C) are the same as that of ICC (B).
7. ICC (A) is close to All Risks of the Ocean Marine Cargo Clause of the PICC in terms of scope of coverage.
8.
Although All Risks in the Ocean Marine Cargo Clause of the PICC does nor cover special additional risks, it covers general additional risks.
E. Calculation
1. Company A exported frozen food on CIF terms. The total contract amount was US＄10,000 and insurance was effected for 110% CIF value. The insurance premium rate was 0.8%. How much was the insurance premium?
2. Company A sold a batch of goods. The quotation was US＄235per M/T CIF Liverpool.
Insurance was effected for 110% of the invoice amount against All Risks and War Risks, the
total premium rate of which was 0.7%. The importer requested A to make a new quotation on CFR terms. How much should A quote on condition that its foreign exchange income was not impacted.
3. The original export price was US＄19,800 CFR Singapore. Now the importer asked for a new quotation on CIF and insurance was covered for 120% CIF price against All Risks. Suppose the premium rate of All Risks was 1%. How much was the CIF price?
4.The original quotation was US＄1,250 per M/T CIF New York. Now the importer intended to arrange insurance by itself and asked for a new quotation on CIF terms. The original quotation includes insurance of WPA and Risk of fresh water and/or rain damage, the premium rate of which was 2.4% and 0.1% respectively and insurance was effected for 110% CIF price. Calculate CFR price.
F. Case study
1. A vessel carrying a bulk good of ore was stranded. Some goods were damaged. In an attempt to get free, some ore were jettisoned, both the engine and the ship were damaged, and a salvage vessel was employed. The ship was refloated in a days and put into a port of refuge for repair. The damage, charges were as follows:
1) Goods damaged because of stranding: US＄10,000.
2) Jettisoned cargo: US＄20,000.
3) Service of salvage vessel: US＄65,000.
4) Refugee and other charge: US＄35,000.
Which of the above damages or charges shall be allowed as general average? Why?
2. Company A exported a batch of chemical raw materials on CIF. Insurance had been effected against FPA for 110% of the invoice value. After the goods being loaded at the beginning of May, the vessel departed. On May 10, the vessel was again stranded and another part of the goods were damaged. The losses were:
1) Losses caused by heavy weather: US＄30,000.
2) Losses caused by stranding: US＄20,000.
Could the insured claim for all the losses? Why?
三、Answers to Review Questions
A. Briefly define the concepts
1. Actual total loss: Where the subject matter insured is destroyed, or so damaged as to cease to be
a thing of the kind insured, or where the assured is irretrievably deprived thereof, there is an actual total loss.
2. Constructive total loss: In insurance, not an “actual total loss” but a situation where 1) the actual total loss appears unavoidable (as in case of perishable goods), or 2) a partial loss has occurred to an extent that the property is beyond economical repair (cost of restoring it exceeds its insured value). In constructive total loss cases, the insured may (if terms of the insurance policy permit) abandon the property by giving a “notice of abandonment”to the insurer who then assumes all rights to the property.
3. Particular average: If the average (damage) is accidently occasioned by some perils insured
against, and not by the deliberate act of the common benefit, that loss must be sustained exclusively by the person upon whom the damage falls and is termed a particular average.
4. General average: A general average is a loss caused by or directly consequential on a general average act. It includes a general average expenditure as well as a general average sacrifice.
5. General act: There is a general average 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.
6. Sue and labor expenses: Extraordinary expenditures made in time of peril to avert or minimize any loss of or damage to the subject matter insured.
7. W/W clause: The clause in the Insurance Policy that defines when coverage commences and terminates, which means insurance coverage of risks to a shipment of goods from the time the goods leave the warehouse for commencement of transit and continue during ordinary course of transit until delivered to final warehouse at destination, or until the expiration of 60 days as of the moment of the insured goods are unloaded (if the shipment fails to reach the aforesaid warehouse), but with exception that the goods be transported to other place of destination not indicated on the insurance documents.
8. Open policy: Also called open cover, in the context of insurance, it is an agreement between the insured and the insurer to insure all goods in transit within the agreement.
B. Questions and problems
1. The three basic insurance in CIC are FPA (free from particular average), WPA (with particular average) and ALL RISKS. The differences between them are: 1) WPA differs from FPA in that aside from the risks covered under FPA. condition, WPA also covers partial losses of the insured goods caused by heavy weather, lighting, tsunami, earthquake and/or flood; 2)ALL RISKS differs from FPA and WPA in that aside from the risks covered under the FPA. and W A conditions, this insurance covers all risks of loss of or damage to the insured goods whether partial or total, arising from general extraneous risks in the course of transit.
2. A general average is a loss caused by or directly consequential on a general average act which consists of any sacrifice or expenditure made intentionally and reasonably to preserve property involved in a sea voyage. The party on whom the general average falls is entitled to a ratable contribution from the other parties interested. By contrast, particular average relates purely to marine insurance. It consists of any partial loss that is not a general-average loss (for example, the damage of cargo by seawater). It is therefore borne purely the person suffering it and is frequently covered by a policy only in limited circumstances.
3. In the event of loss or damage for which the insurer may be liable, the insured or their agents should following steps to claim for losses:
1) Apply for survey. In the event of any damage to the goods, the insured shall immediately
apply for survey to the Surveyor stipulated in the policy.
2) Claim for damages on the carrier and/or other parties concerned: If the carrier and the other
relevant authorities (Customs and Port Authorities etc.) are responsible for such damages, the insured shall lodge a claim with them in writing and, if necessary, obtain their confirmation of an extension of the time limit of validity of such claim. In addition, the insured shall obtain from the carrier or other relevant authorities certificate of loss or damage.
3) Take proper measures: The insured shall also, take proper measures immediately in salvaging
the goods or preventing or minimizing a loss or damage thereto.
4) Prepare documents for claim: To enable claims to be dealt with promptly, the insured or their agents should submit all available supporting documents without delay.
C. Multiple-choice questions
1. A
2. B
3.A
4.B
5.A
6.D
7.C
8.D
9.B 10.D 11.A 12.B
E. True or false questions
1.T
2.T
3.F
4.F
5.F
6.T
7.T
8. T
1. Insurance premium= insurance amount* insurance premium rate
=10,000*110%*0.8%
=US＄88
2. CFR=CIF- insurance premium
=CIF-insurance amount * insurance premium ate
=CIF-CIF* 110%* 0.7%
=235-235*110%*0.7%
=US＄233.19
3. CIF(or CIP) price= CIF(or CIP) price /﹛1-［premium rate * (1+ addition rate) ］﹜
=19,800/［1- 1%*(1+20%) ］
=US＄20,040.49
CIF(or CIP) price= CFR (or CPT) price /﹛1- ［premium rate * (1+addition rate)］﹜
1,250=CFR /﹛1-［(.4%+0.1%)* (1+10%)］﹜
4. CFR=1,250* (1-2.5%*1.1)
= US＄1,215.63
E. Case study
1. All the items except Item 1) shall be allowed as general average because the damage in Item 1)
was in case of accidental stranding, not a voluntary stranding. The damages and charges in other three items were a direct consequence of general average act.
2. The insured could claim for all the losses because in the light of provisions of the Ocean Marine Cargo Clause of the PICC, FPA covers: 1) Total loss or partial loss caused by fortuitous accidents such as stranding, striking upon the rocks, icebergs or other objects, collision, fire and explosion. Thus the US＄20,000 loss caused by stranding was within the scope of insurance; 2) Partial loss of the insured goods attributable to heavy weather, lighting and/or tsunami, where the conveyance has been grounded, stranded, sunk or burnt irrespective of whether the event or events took place or after such accidents. Thus the US＄30,000 loss caused by heavy weather was also within the scope of insurance.。