Insurance May/June 2015

Question 5

  • Explain the following terms under marine insurance:

    (a)       hull policy;
    (b)       cargo policy;
    (c)       freight policy;
    (d)       marine perils;
    (e)       average.


The performance of the candidates on this question was poor.  Some of the responses expected from the candidates are as follows:

Explanation of terms used under marine Insurance

(a)        Hull policy      -           This covers loss or damage to ship, tankers, bulk carriers and
smaller vessels arising from the perils of the sea, rivers, lake or other navigable water caused by fire, collusion, explosion and sinking.

(b)        Cargo policy    -           Cargo policy in marine insurance is a cover effected to protect
goods being transported from the country of origin to port of destination.

(c)        Freight policy  -           This is a policy that covers the cost of transporting a cargo from
port of origin to port of destination arising from loss of or damage to the cargo due to perils of the sea.