(a) State three marine perils. (b) List and explain three types of cover available under marine insurance.

Answer Details

(a) Three marine perils

1. Perils of the sea, such as storms, heavy weather, rough seas and sinking.
2. Collision of the ship with another vessel or with a fixed object.
3. Stranding or running aground of the vessel.
4. Fire and explosion on board the ship.
5. Jettison (deliberate throwing of cargo overboard to lighten the ship in danger).
6. Piracy, theft and barratry of the master or crew.

(b) Three types of cover available under marine insurance

1. Hull insurance: This covers loss of or damage to the ship or vessel itself, including its machinery and equipment, against marine perils such as sinking, collision and stranding.
2. Cargo insurance: This covers loss of or damage to the goods or merchandise carried on board the vessel during the voyage, protecting the owner of the cargo from perils such as water damage, jettison and theft.
3. Freight insurance: This covers the loss of freight, that is the money payable to the shipowner for carrying the cargo, which the shipowner would lose if the cargo or ship is lost before the freight is earned.