Deck 10: Risk Management and Commercial Propertypart II

Question 1

Under the warehouse-to-warehouse clause, protection is provided from the warehouse of the shipper to the warehouse of the carrier.

Answer 1

True

Question 2

If a ship leaves port and is not seaworthy, it has breached an express warranty in most ocean marine contracts.

Answer 2

False

Question 3

When a ship departs without a good reason from its prescribed course, the implied warranty of deviation is broken.

Answer 3

True

Question 4

Special insurance policies are needed for mobile equipment because it is subject to such a wide variety of exposures.

Question 5

The jewelers' block policy also covers the property of the customer bailor.

Question 6

Merchandise credit insurance is a major line of insurance for most insurers.

Question 7

Title insurance premiums are almost entirely intended for investigation expenses instead of loss payments.

Question 8

There is no standard title insurance contract.

Question 9

Title insurance offers coverage for losses occurring before the policy is taken out.

Question 10

Damage to a wharf or pier caused by negligent operation of the vessel is covered under the P&I clause.

Question 11

Particular average is a partial loss to an interest which must be borne entirely by that interest.

Question 12

Under the FC&S clause, war risks are covered in ocean marine insurance.

Question 13

In land transportation, the common carrier is not responsible for acts of negligence only.

Question 14

If goods spoil in transit, the common carrier is probably liable for loss.

Question 15

Insurance against transportation perils is not needed if the seller ships under released bill of lading.

Question 16

The RDC clause is a third-party liability coverage against loss by collision of the vessel.

Question 17

If a sacrifice of goods is voluntarily made for the benefit of the various interests on the voyage, all interests must contribute to the loss, even if the ship is later lost.

Question 18

Under the sue-and-labor clause, the insured is required to take all possible measures to save and preserve the goods in case of loss.

Question 19

The inland transit policy is generally a named-peril contract, not all-risk.

Question 20

The jewelers' block policy is typically a named-peril policy.

Question 21

The jewelers' block policy covers customers' property as well as the jewelers' own property.

Question 22

The contractors' equipment floater covers equipment that is owned, leased, or borrowed.

Question 23

Floater policies are not intended to cover movable goods that are expected to remain at a fixed location.

Question 24

Match the descriptions with their terms:

-Improper loading or packing is _________________.

A) Acts of God
B) acts or negligence of the shipper
C) bailment
D) block policy
E) contractors' equipment floater
F) credit life insurance
G) deposit insurance program
H) freight
I) inherent nature of the goods
J) jewelers' block policy
K) protection and indemnity clause
L) released bill of lading
M) running-down clause
N) scheduled property floater
O) Title insurance

Question 25

Match the descriptions with their terms:

-Losses due to decay, fermentation, and drying are examples of ______________.

A) Acts of God
B) acts or negligence of the shipper
C) bailment
D) block policy
E) contractors' equipment floater
F) credit life insurance
G) deposit insurance program
H) freight
I) inherent nature of the goods
J) jewelers' block policy
K) protection and indemnity clause
L) released bill of lading
M) running-down clause
N) scheduled property floater
O) Title insurance

Question 26

Match the descriptions with their terms:

-Under a/an _________________, a carrier can reduce its liability to the shipper.

A) Acts of God
B) acts or negligence of the shipper
C) bailment
D) block policy
E) contractors' equipment floater
F) credit life insurance
G) deposit insurance program
H) freight
I) inherent nature of the goods
J) jewelers' block policy
K) protection and indemnity clause
L) released bill of lading
M) running-down clause
N) scheduled property floater
O) Title insurance

Question 27

Match the descriptions with their terms:

-In ocean marine insurance, _____________ refers to money paid for the transportation of goods.

A) Acts of God
B) acts or negligence of the shipper
C) bailment
D) block policy
E) contractors' equipment floater
F) credit life insurance
G) deposit insurance program
H) freight
I) inherent nature of the goods
J) jewelers' block policy
K) protection and indemnity clause
L) released bill of lading
M) running-down clause
N) scheduled property floater
O) Title insurance

Question 28

Match the descriptions with their terms:

-The _________________ protects the hull owner against third-party liability claims that arise from collisions.

A) Acts of God
B) acts or negligence of the shipper
C) bailment
D) block policy
E) contractors' equipment floater
F) credit life insurance
G) deposit insurance program
H) freight
I) inherent nature of the goods
J) jewelers' block policy
K) protection and indemnity clause
L) released bill of lading
M) running-down clause
N) scheduled property floater
O) Title insurance

Question 29

Match the descriptions with their terms:

-The _________________ provides liability coverage for personal injuries, loss of life, or property damage other than vessels.

A) Acts of God
B) acts or negligence of the shipper
C) bailment
D) block policy
E) contractors' equipment floater
F) credit life insurance
G) deposit insurance program
H) freight
I) inherent nature of the goods
J) jewelers' block policy
K) protection and indemnity clause
L) released bill of lading
M) running-down clause
N) scheduled property floater
O) Title insurance

Question 30

Match the descriptions with their terms:

-A/An _________________ covers the stock in trade or the equipment belonging to a business firm on an all-risk basis at various locations.

A) Acts of God
B) acts or negligence of the shipper
C) bailment
D) block policy
E) contractors' equipment floater
F) credit life insurance
G) deposit insurance program
H) freight
I) inherent nature of the goods
J) jewelers' block policy
K) protection and indemnity clause
L) released bill of lading
M) running-down clause
N) scheduled property floater
O) Title insurance

Question 31

Match the descriptions with their terms:

-A/An _________________ exists when one has entrusted personal property to another.

A) Acts of God
B) acts or negligence of the shipper
C) bailment
D) block policy
E) contractors' equipment floater
F) credit life insurance
G) deposit insurance program
H) freight
I) inherent nature of the goods
J) jewelers' block policy
K) protection and indemnity clause
L) released bill of lading
M) running-down clause
N) scheduled property floater
O) Title insurance

Question 32

Match the descriptions with their terms:

-A/An _________________ is written to insure all the stock in trade of a typical jeweler on an all-risk basis.

A) Acts of God
B) acts or negligence of the shipper
C) bailment
D) block policy
E) contractors' equipment floater
F) credit life insurance
G) deposit insurance program
H) freight
I) inherent nature of the goods
J) jewelers' block policy
K) protection and indemnity clause
L) released bill of lading
M) running-down clause
N) scheduled property floater
O) Title insurance

Question 33

Match the descriptions with their terms:

-Often a business will insure movable business property under a/an _____________________.

A) Acts of God
B) acts or negligence of the shipper
C) bailment
D) block policy
E) contractors' equipment floater
F) credit life insurance
G) deposit insurance program
H) freight
I) inherent nature of the goods
J) jewelers' block policy
K) protection and indemnity clause
L) released bill of lading
M) running-down clause
N) scheduled property floater
O) Title insurance

Question 34

Match the descriptions with their terms:

-A building contractor's mobile equipment is often insured under a/an ____________________.

A) Acts of God
B) acts or negligence of the shipper
C) bailment
D) block policy
E) contractors' equipment floater
F) credit life insurance
G) deposit insurance program
H) freight
I) inherent nature of the goods
J) jewelers' block policy
K) protection and indemnity clause
L) released bill of lading
M) running-down clause
N) scheduled property floater
O) Title insurance

Question 35

Match the descriptions with their terms:

-_________________ have been interpreted to mean perils such as earthquakes, storms, and floods.

A) Acts of God
B) acts or negligence of the shipper
C) bailment
D) block policy
E) contractors' equipment floater
F) credit life insurance
G) deposit insurance program
H) freight
I) inherent nature of the goods
J) jewelers' block policy
K) protection and indemnity clause
L) released bill of lading
M) running-down clause
N) scheduled property floater
O) Title insurance

Question 36

Match the descriptions with their terms:

-Insurance against failure to pay a debt because of the death of the borrower is known as _________________.

A) Acts of God
B) acts or negligence of the shipper
C) bailment
D) block policy
E) contractors' equipment floater
F) credit life insurance
G) deposit insurance program
H) freight
I) inherent nature of the goods
J) jewelers' block policy
K) protection and indemnity clause
L) released bill of lading
M) running-down clause
N) scheduled property floater
O) Title insurance

Question 37

Match the descriptions with their terms:

-In the _________________, the United States government insures accounts held in insured institutions.

A) Acts of God
B) acts or negligence of the shipper
C) bailment
D) block policy
E) contractors' equipment floater
F) credit life insurance
G) deposit insurance program
H) freight
I) inherent nature of the goods
J) jewelers' block policy
K) protection and indemnity clause
L) released bill of lading
M) running-down clause
N) scheduled property floater
O) Title insurance

Question 38

Match the descriptions with their terms:

-_________________ is a device by which the purchaser of real estate may protect against losses in case the obtained title is not legitimate.

A) Acts of God
B) acts or negligence of the shipper
C) bailment
D) block policy
E) contractors' equipment floater
F) credit life insurance
G) deposit insurance program
H) freight
I) inherent nature of the goods
J) jewelers' block policy
K) protection and indemnity clause
L) released bill of lading
M) running-down clause
N) scheduled property floater
O) Title insurance

Question 39

If Johnson suffers a $4,000 loss on cargo worth $100,000 and his FPA deductible is 5 percent, he will receive

A) $0,
B) $4,000,
C) $5,000.

Question 40

Coinsurance clauses in ocean marine insurance policies

A) normally have an 80 percent clause,
B) are valued policies,
C) do not concern themselves with insurance to value.

Question 41

Deviation may be allowed to

A) abandon the trip,
B) change the course of the ship to pick up more passengers at another location,
C) help a ship in distress.

Question 42

Inland marine transit policies usually exclude loss due to

A) strikes,
B) collisions,
C) rising water.

Question 43

The trip transit policy is used

A) by common carriers,
B) by private carriers,
C) for a specific shipment between named locations.

Question 44

The major advantages of credit insurance include all but one of the following:

A) Credit insurance offers a way of transferring a significant economic risk to those better able to bear it,
B) Credit insurance generally represents the only feasible solution to the problem it is designed to meet,
C) Credit insurance stabilizes a firm's profits by tending to place definite limits on the size of bad debt losses,
D) Credit insurance has certain psychological benefits for encouraging sales,
E) Credit insurance may enable a firm to accept accounts it would not otherwise accept.

Question 45

All but one of the following represent important differences between title insurance and other contracts of property and liability insurance:

A) Under title insurance no losses, as such, are expected,
B) Any losses payable under the title insurance contract must have had their origin prior to the effective date of the policy,
C) Title insurance is noncancellable,
D) There is no expiration date in title insurance,
E) Title insurance may contain certain excluded sources of loss.

Question 46

If a ship changes course, insurance coverage may be voided because of the operation of the implied warranty of

A) seaworthiness,
B) legality,
C) deviation,
D) delay,
E) none of these.

Question 47

In the absence of negligence, an ocean-going common carrier is legally liable for

A) errors in navigation or management of the vessel,
B) strikes or lockouts,
C) inherent vice of goods,
D) perils of the seas,
E) none of these.

Question 48

In the absence of negligence, a land common carrier is liable for

A) fire,
B) enemy soldiers who attack the vehicle,
C) government confiscation of cargo that is held to be contraband,
D) breakage due to poor packing of fragile articles by the shipper,
E) none of these.

Question 49

A certain shipper sends 20 boxes of farm equipment by ocean vessel to Europe. On the way, four boxes are immersed in seawater and totally destroyed, and two boxes are 50 percent damaged. The damage to the boxes that were partially destroyed would be

A) a general average claim,
B) a particular average claim,
C) paid in full under the sue-and-labor clause,
D) denied by the insurer.

Question 50

In general, a floater policy does not cover goods that

A) may be moved at any time,
B) are being moved from one location to another,
C) are at a fixed location permanently,
D) belong to the named insured,
E) are used for business purposes.