Texas General Lines — Property and CasualtyCommercial LinesHard
A shipping company is preparing to transport a large consignment of goods across the Atlantic Ocean. They are concerned about potential damage to the cargo if the vessel encounters severe weather or is involved in a collision. Which type of insurance coverage would primarily address the physical loss or damage to the goods themselves during the ocean voyage?
- AHull Insurance
- BProtection and Indemnity (P&I) Insurance
- CFreight Insurance
- DCargo Insurance
Show answer & explanationAnswer & explanation
Correct answer: D. Cargo Insurance
Cargo Insurance is specifically designed to cover the physical loss or damage to the goods being shipped during an ocean voyage. Hull insurance covers the vessel itself, P&I covers liability to third parties, and Freight insurance covers the loss of income from carrying the cargo.
Why the other options are wrong
- A. Hull Insurance covers the physical damage to the vessel itself, not the cargo it carries.
- B. Protection and Indemnity (P&I) Insurance covers liability for bodily injury or property damage to third parties, not damage to the insured cargo.
- C. Freight Insurance covers the loss of anticipated income from transporting cargo, not the physical cargo itself.
Ocean Marine Cargo Insurance
A type of Ocean Marine insurance that covers the physical loss or damage to goods being transported over water, including during loading, unloading, and land transit associated with the voyage.
- Protects owners of goods from financial loss.
- Coverage can be 'named perils' or 'all-risks'.
- Can include General Average contributions.
Memory trick: For the open sea, 'HPC' is the key.