Marine and Aviation Insurance
What the domain tests
This domain tests marine hull and cargo cover, aviation hull and liability cover, and the loss concepts that distinguish marine insurance: particular average, general average, salvage, constructive total loss, and sue-and-labour charges.
Core rules and concepts
- Marine cargo cover may follow Institute Cargo Clauses A, B, or C. Clause A is the widest, but it still has exclusions such as ordinary leakage, insufficient packing, delay, and inherent vice.
- Hull cover insures the vessel, subject to seaworthiness and navigation warranties.
- Particular average is a partial loss borne by the owner of the damaged property. General average is an intentional sacrifice or extraordinary expenditure for the common safety, contributed to by all interests.
- Actual total loss means the subject matter is destroyed or irrecoverably lost. Constructive total loss arises when the cost of recovery or repair would exceed the insured value, allowing abandonment.
- Sue and labour charges are reasonable costs to avert or minimise loss and may be recoverable in addition to the sum insured.
Worked example
A cargo ship encounters heavy weather. To save the vessel and remaining cargo, the master jettisons part of the cargo. The sacrificed cargo’s loss is general average, not merely a loss of the owner whose goods were thrown overboard. All contributing interests share the sacrifice because the act was intentional and for common safety.
Traps that cost marks
Do not call every partial loss general average; general average requires intentional sacrifice for common safety. Do not assume Cargo Clause A covers delay or inherent vice. Do not ignore seaworthiness. Do not confuse constructive total loss with actual total loss. Do not overlook sue-and-labour charges.