Texas General Lines — Property and CasualtyCommercial LinesEasy
A shipping company is transporting a cargo of high-value electronics from Houston, Texas, to Rotterdam, Netherlands, via ocean vessel. They need comprehensive coverage for this cargo against perils such as sinking, stranding, collision, and piracy. Which type of insurance would provide this specific coverage?
- AEquipment Breakdown Insurance
- BCommercial Property - Transit Coverage
- CInland Marine - Motor Truck Cargo Policy
- DOcean Marine - Cargo Insurance
Show answer & explanationAnswer & explanation
Correct answer: D. Ocean Marine - Cargo Insurance
Ocean Marine Cargo Insurance is specifically designed to cover goods while they are being transported over water, including perils associated with sea travel like sinking, stranding, collision, and piracy.
Why the other options are wrong
- A. This covers mechanical or electrical breakdown of equipment, completely unrelated to cargo in transit.
- B. While some commercial property policies have limited transit coverage, it's typically for land-based transit or much less comprehensive than specialized ocean marine coverage.
- C. This covers goods transported by truck over land, not by ocean vessel.
Ocean Marine Cargo Insurance
Insurance that covers goods being transported by sea against maritime perils such as sinking, stranding, collision, piracy, and sometimes general average.
- Covers goods transported by sea
- Protects against maritime perils
- Can be 'all-risk' or 'named perils'
Memory trick: Ocean Marine: Cargo sailing the sea, protected by thee.