I.A.(MR) cheat sheet

Insurable interest requires a pecuniary relationship to the subject matter at the time of loss (indemnity policies) or at inception (life policies).

Utmost good faith (uberrimae fidei) obliges the proposer to disclose all material facts a prudent underwriter would consider relevant to acceptance or rating.

Indemnity restores the insured to the pre-loss financial position; valued policies, reinstatement and new-for-old are recognised exceptions.

Proximate cause is the dominant, effective and efficient cause of loss, not necessarily the last event in the chain.

Subrogation transfers the insured's recovery rights to the insurer after payment, limited to the amount paid and only against negligent third parties.

Contribution applies where two or more indemnity policies cover the same loss; each pays rateably unless a rateable proportion or non-contribution clause governs.

Average clause: claim paid = (sum insured / value at risk) x loss, applied where the sum insured is below the actual value.

Survey report structure: scope and instructions, documents examined, factual findings, cause analysis, quantum computation, and recommendations.

Marine perils under an Institute Time Clauses Hulls cover: perils of the seas, rivers, lakes; fire, explosion; violent theft by persons outside the vessel; jettison; piracy; contact with aircraft, land transport, dock or harbour equipment.

Hull cover is on a valued basis; in a total loss the agreed value is paid, and in a partial loss a claim is limited by the insured value.

Constructive total loss arises where the subject matter is reasonably abandoned because actual total loss appears unavoidable or cost of recovery and repair would exceed its value when recovered.

Sue and labour clause obliges the assured to take reasonable steps to avert or minimise loss; such charges are payable in addition to the sum insured.

General average requires a voluntary and intentional sacrifice or extraordinary expenditure for the common safety; contributions are apportioned by arrived values.

Particular average is accidental partial damage borne solely by the owner of the damaged property, not apportioned among cargo and ship.

Collision liability (RDC) is limited to three-fourths of the amount the assured is legally liable to pay, unless the full cover is agreed.

Running down clause and sister-ship clause address liability to third-party vessels and claims between vessels under the same ownership.

Institute Cargo Clauses (A) cover all risks of loss or damage except those expressly excluded; (B) and (C) are named-perils covers, with (C) narrower than (B).

ICC (B) adds earthquake, volcanic eruption, lightning, water damage from entry, washing overboard and total loss of package overboard; ICC (C) is limited to stranding, sinking, burning, collision and specified discharge-port events.

Common exclusions across ICC (A), (B) and (C): wilful misconduct of the assured, ordinary leakage, ordinary wear and tear, insufficient packing, inherent vice, delay, insolvency of carriers, and nuclear war weapons.

Cargo cover attaches when goods leave the warehouse named in the policy (warehouse-to-warehouse) and terminates on delivery to the consignee's warehouse or on expiry of 60 days after discharge, whichever first.

The duration clause permits deviation, delay, transhipment and change of voyage without prejudicing cover, subject to prompt notice and additional premium where required.

Valuation under ICC is the prime cost plus insurance and freight (CIF) plus 10 per cent, unless otherwise agreed.

Underwriting factors: commodity and packing, route and transit mode, carrier and vessel quality, season and climatic risk, claims history, and deductible selection.

FOB and CIF terms allocate risk differently; under CIF the seller arranges insurance, and the buyer's interest begins on shipment, affecting who claims.

Claim documentation for cargo: original policy or certificate, bill of lading, commercial invoice, packing list, survey report, and notice of claim to carriers.

Notice of loss must be given promptly; under ICC the assured must notify the insurer and take reasonable steps to minimise loss.

Surveyor's role: ascertain cause and extent of damage, preserve evidence, quantify loss, and advise on salvage and disposal of damaged goods.

Salvage loss is settled as the insured value less net proceeds of sale of the damaged goods, where goods are sold at an intermediate port.

Partial loss of cargo is generally settled on the basis of the sound value at destination less the damaged value, applied to the insured value.

Duty of the assured to mitigate: costs reasonably incurred to avert or minimise loss are recoverable as sue and labour charges.

Subrogation and rights against carriers: the insurer takes over the assured's rights, and time limits under carriage conventions must be protected.

Fraudulent claims may entitle the insurer to reject the claim and, depending on jurisdiction, avoid the policy; deliberate concealment is a material breach.