I.A.(MR) flashcards

32 cards. Read the term and the definition here. The deck at the top of this page is optional.

Insurable interest

A pecuniary or legal relationship between the insured and the subject matter such that the insured benefits from its preservation or is prejudiced by its loss.

Utmost good faith

A mutual duty requiring disclosure of all material facts and avoidance of misrepresentation, breach of which allows the insurer to avoid the contract.

Indemnity principle

The insured is restored to the financial position held immediately before the loss, no better and no worse, subject to policy limits and deductibles.

Proximate cause

The dominant, effective and efficient cause of a loss; it is the cause to which the loss is attributed for coverage purposes.

Subrogation

After paying a claim, the insurer acquires the insured's right to recover from a third party responsible for the loss, limited to the amount paid.

Average clause

A condition reducing a claim proportionately where the sum insured is less than the value at risk: claim equals sum insured divided by value, times the loss.

Contribution

The right of an insurer that has paid a loss to recover a proportionate share from other insurers covering the same interest against the same peril.

Survey report structure

A survey report typically sets out the instructions, documents reviewed, factual findings, cause analysis, quantum computation and recommendations, each supported by evidence.

Marine perils

Fortunes of the sea including perils of the seas, fire, jettison, piracy, violent theft and contact with land transport or harbour equipment.

Constructive total loss

A loss where the subject matter is reasonably abandoned because actual total loss appears unavoidable or recovery and repair costs would exceed its recovered value.

Sue and labour clause

A clause obliging the assured to take reasonable steps to avert or minimise loss, with those costs recoverable in addition to the sum insured.

General average

A voluntary and intentional sacrifice or extraordinary expenditure for the common safety of ship and cargo, with contributions apportioned by arrived values.

Particular average

Accidental partial damage to ship or cargo borne solely by the owner of the damaged property, not apportioned among other parties.

Running down clause

A hull policy clause covering the assured's legal liability to third parties for collision damage, typically limited to three-fourths of the liability.

Valued hull policy

A policy stating an agreed value for the vessel; in a total loss that value is paid, and partial claims are limited by it.

Sister-ship clause

A clause allowing recovery where a vessel collides with another ship under the same ownership, treating the claim as if the ships were separately owned.

ICC (A) cover

Institute Cargo Clauses (A) provide all-risks cover for loss or damage to cargo, subject only to the exclusions expressly listed in the clauses.

ICC (B) cover

A named-perils cargo cover adding earthquake, volcanic eruption, lightning, water entry, washing overboard and package loss overboard to the ICC (C) perils.

ICC (C) cover

The narrowest cargo cover, restricted to losses from stranding, sinking, burning, collision and specified discharge-port events such as fire or explosion.

Inherent vice exclusion

Loss caused by the natural behaviour of the goods, such as decay or deterioration, is excluded from cargo cover under all Institute Cargo Clauses.

Warehouse-to-warehouse

Cargo cover attaches when goods leave the named warehouse and ends on delivery to the consignee's warehouse or 60 days after discharge, whichever first.

CIF valuation

Cargo claims are valued at prime cost plus insurance and freight, plus ten per cent, unless the policy specifies a different agreed basis.

Cargo underwriting factors

Rating considers commodity and packing, route and transit mode, carrier and vessel quality, season, claims history and the deductible selected.

Transhipment clause

Cover continues during transhipment and deviation without prejudice, provided the assured gives prompt notice and pays any additional premium required.

Cargo claim documents

A cargo claim typically requires the original policy or certificate, bill of lading, invoice, packing list, survey report and notice to the carrier.

Salvage loss settlement

Where damaged goods are sold at an intermediate port, the claim is the insured value less the net proceeds of sale.

Partial loss of cargo

Settlement based on the sound value at destination less the damaged value, applied proportionately to the insured value of the goods.

Notice of loss

The assured must promptly notify the insurer of a loss and take reasonable steps to prevent or minimise further damage to the goods.

Surveyor's role

A surveyor ascertains the cause and extent of damage, preserves evidence, quantifies the loss and advises on salvage or disposal of damaged goods.

Mitigation costs

Reasonable costs incurred by the assured to avert or minimise a loss are recoverable as sue and labour charges in addition to the sum insured.

Carrier rights protection

Insurers exercising subrogation must protect time limits and notice requirements under carriage conventions to preserve recovery rights against carriers.

Fraudulent claim

A deliberately exaggerated or fabricated claim may entitle the insurer to reject it and, in many jurisdictions, to avoid the policy entirely.