AMIM cheat sheet

Ocean marine is the oldest property line; it covers perils of the sea and is generally written on all-risk or named-perils forms depending on the coverage part.

Four traditional ocean marine coverage parts: hull, cargo, freight, and protection and indemnity (P&I).

Perils of the sea include wind, waves, stranding, collision, sinking, and piracy; ordinary wear, inherent vice, and delay are excluded.

General average: a voluntary sacrifice of part of the venture for the safety of the whole, shared proportionally by all cargo, ship, and freight interests saved.

Particular average is a partial loss borne solely by the owner of the damaged property; it is not shared across interests.

Sue and labor clause obligates the insured to act to mitigate loss and entitles it to reimbursement of reasonable expenses incurred, even if the loss is not otherwise recoverable.

Hull policies are typically valued (agreed value) and written on a time basis (e.g., 12 months) or a voyage basis.

Free of particular average (FPA) and with average (WA) clauses limit partial-loss recovery on cargo; WA pays partial losses above a franchise or deductible.

Both-to-blame collision clause addresses cargo's right of recovery when both vessels are at fault under a collision liability clause.

Inland marine covers property in transit, property of a mobile nature, and property held by bailees; it grew from ocean marine and is generally all-risk.

Nationwide Marine Definition (1933, as amended) defines what risks are eligible for inland marine treatment.

Commercial property forms use causes-of-loss designations: basic, broad, and special (all-risk) forms.

Business income with extra expense covers lost net income plus continuing expenses during restoration; a period-of-indemnity is typically 12 months.

Commercial property coinsurance: recovery = (limit carried / limit required) x loss, applied when the insured carries less than the required percentage.

Equipment floater covers mobile contractors' equipment; motor truck cargo covers goods in the insured's care while in transit.

Bailee's customers' goods coverage protects property of others in the insured's care, custody, or control.

Difference in conditions (DIC) fills gaps in a primary property program, often adding flood, earthquake, and collapse.

Scheduled vs. blanket limits: scheduled applies to specific items; blanket applies a single limit across multiple locations or items.

P&I covers third-party liabilities: bodily injury and death of crew, passengers, and others; cargo damage; pollution; wreck removal; and fines.

P&I mutual clubs are owned by members and assess calls (premiums) rather than issue fixed-premium policies; commercial P&I also exists.

Collision liability (RDC) under a hull policy is capped at the insured value and typically limited to three-fourths; the remaining one-fourth is covered by P&I.

Protection covers liabilities arising from ownership; indemnity covers liabilities from operation, including cargo and crew claims.

Hull and machinery covers damage to the vessel; P&I covers liabilities to third parties - the two are complementary, not overlapping.

Limitation of liability conventions (e.g., LLMC) allow shipowners to cap liability by tonnage for certain claims.

Maritime employer liability: the Jones Act provides crew negligence remedies; the Longshore and Harbor Workers' Compensation Act covers certain land-based maritime workers.

Charterer's legal liability and shiprepairer's legal liability cover liabilities for vessels not owned by the insured.

Pollution liability under P&I responds to oil and hazardous substance spills, often subject to statutory financial responsibility limits.

Institute Cargo Clauses A, B, and C: A is all-risk; B and C are named-perils with progressively narrower coverage.

Cargo transit coverage attaches warehouse-to-warehouse; the 110% insured value convention reflects invoice cost plus freight plus 10% expected profit.

Incoterms determine who bears transit risk and who insures: CIF and CIP require the seller to insure; FOB and EXW shift risk to the buyer at defined points.

Cargo exclusions under ICC A include insufficient packing, inherent vice, delay, ordinary leakage, and insolvency of the carrier.

Hull perils include heavy weather, grounding, collision, fire, and piracy; hull policies carry warranties such as class maintained and seaworthiness.

Hull deductibles apply per occurrence; machinery damage additional deductibles may apply to engine damage.

Lay-up and trading warranties restrict where and when a vessel may operate; breach can void coverage.

Transit risk mitigation includes survey of packing, route selection, carrier vetting, and cargo security (e.g., CTU packing guidelines).

Freight coverage protects the earnings of the vessel; freight is earned on delivery, so loss of freight is a separate insurable interest.

Claims handling requires notice, proof of loss, survey or average adjustment, and subrogation against responsible third parties.

Average adjusters apportion general average contributions and prepare statements of general average.

Subrogation lets the insurer pursue recovery from negligent third parties after paying the insured; the insured must not prejudice that right.

Underwriting factors: vessel type, age, tonnage, class society, flag, trading routes, crew, cargo, and loss history.

Loss ratios and experience modification drive renewal pricing; mutual P&I clubs levy supplementary calls when claims exceed forecasts.

Reinsurance (facultative or treaty, proportional or excess of loss) is used to cap marine exposures, especially catastrophic cargo and hull accumulations.

Total loss forms: actual total loss (property destroyed or irrecoverable) vs. constructive total loss (repair cost exceeds value; insured may abandon the vessel).

Salvage charges are recoverable under sue and labor and are distinct from general average contributions.

Marine insurance is subject to the doctrine of utmost good faith (uberrimae fidei) and the duty of disclosure of material facts.