III IC-67 common mistakes
III IC-67 · Understand the traps and how to avoid them.
Treating the marine insurance contract as a pure indemnity and ignoring the duty of utmost good faith when analysing a fact pattern, so the candidate only computes the payout and never addresses non-disclosure or misrepresentation.
Candidates drilled on loss-adjustment arithmetic default to the calculation and forget that the pre-contractual duty of disclosure sits at the heart of the syllabus; the exam often plants a material fact the assured failed to reveal.
What to do instead
After every scenario, run a two-column check: (1) indemnity/measure of loss, (2) validity defences - disclosure, representation, warranties. Practise drafting a short paragraph on materiality and inducement before touching numbers.
Confusing the insurable interest requirement with ownership, concluding that a person who does not own the cargo or vessel cannot claim.
Everyday intuition equates 'interest' with 'title', but marine insurance recognises any economic interest exposed to loss - freight, commissions, anticipated profit, lender's interest, carrier's liability.
What to do instead
Memorise the categories of insurable interest and, for each practice question, ask 'what economic loss would this party actually suffer?' rather than 'who owns it?'. Test with the classic cases of freight and bottomry-style interests.
Applying the principle of proximate cause loosely, naming the last event in the chain rather than the dominant, efficient cause, and ignoring concurrent causes.
Chronological reasoning is natural; candidates list the sequence of events and pick the final one, missing that a covered peril must be the proximate cause even if an excepted peril follows or co-operates.
What to do instead
For causation questions, write the chain, then identify which link is dominant and whether the policy expressly excludes it. Practise concurrent-cause scenarios (perils of the sea plus inherent vice, or negligence plus unseaworthiness) and state the rule you apply.
Mixing up the perils insured under the standard hull and cargo clauses, attributing cargo cover to hull wording or assuming all-risks cover in a named-perils policy.
The clause sets look similar in structure and candidates revise them as one block, so the specific inclusions, exclusions and the 'all risks' versus 'named perils' distinction blur under exam pressure.
What to do instead
Build a comparison grid: hull perils vs cargo perils, exclusions in each, and the burden of proof that shifts with all-risks cover. Redo past scenarios by first naming the clause set, then applying only that set's wording.
Misapplying the sue-and-labour clause, treating salvage expenditure as a claim on the sum insured or expecting it to be reduced by the deductible.
Candidates conflate general average, salvage and sue-and-labour because all involve money spent to save property; the special status of sue-and-labour as separate from the sum insured and generally not subject to deductible is easily missed.
What to do instead
Write a one-page table distinguishing general average contribution, salvage remuneration and sue-and-labour charges, noting which is subject to the sum insured and which is not. Apply it to a worked scenario with a total loss plus salvage spend.
Calculating general average contribution without correctly identifying the contributory values, or omitting the adjustment of sacrifices and the treatment of freight and ship's stores.
The arithmetic is multi-step and candidates rush to apportion the sacrifice across cargo value only, forgetting that ship, freight and stores contribute and that values are adjusted to the port of destination.
What to do instead
Practise a full York-Antwerp-style computation: establish the general average act, list all contributory interests, adjust each value, then apportion. Show every step so partial credit is earned even if the final figure slips.
Ignoring the effect of a breach of warranty, or assuming breach automatically discharges the insurer for all later losses regardless of causation.
Candidates learn 'breach of warranty = no cover' as a slogan and then apply it mechanically, missing the modern position that suspension of cover applies while the warranty is breached and that causation and the specific policy terms matter.
What to do instead
State the warranty, the date of breach, whether it was remedied, and whether the loss occurred during the period of breach. Always address causation explicitly and cite the governing clause rather than a rule of thumb.
Overlooking subrogation limits and the assured's duties after loss, so the answer ignores the insurer's rights against third parties and the assured's obligation to preserve recoveries.
Subrogation is taught as a definition rather than a set of constraints; candidates forget that the insurer cannot recover more than it paid and that the assured must not prejudice the insurer's rights.
What to do instead
For every loss scenario, add a short section: insurer's subrogation rights, the cap on recovery, the assured's duty to mitigate and to preserve rights, and any waiver of subrogation in the contract. Practise with a collision where a third party is at fault.
Failing to distinguish total loss from partial loss and constructive total loss from actual total loss, then applying the wrong measure of indemnity.
The terms sound interchangeable and the notice-of-abandonment requirement is easy to forget; candidates label a loss 'total' whenever damage is severe and then claim the full sum insured.
What to do instead
Define each term precisely, state the test for constructive total loss (cost of repair exceeding value), and always mention the notice of abandonment and its time limit. Match the measure of indemnity to the loss category in a short concluding sentence.
Answering in generalities - quoting broad principles without applying them to the specific facts, parties and figures in the question.
Under time pressure candidates reproduce memorised definitions and hope the marker infers the application; examiners allocate marks for applied reasoning, so generic answers score poorly even when the law is correct.
What to do instead
Structure each answer as: identify the issue, state the rule and its source, apply it to the named parties and amounts, then conclude. Before moving on, check that every party in the scenario has been addressed and that any figure given in the question has been used.