Florida 2-20 General Lines Agent (Property, Casualty, Commercial Lines and Florida Law)Commercial LinesMedium
A Florida-based import/export company regularly ships high-value, unique artwork and antiques via ocean cargo. Their standard Ocean Marine policy includes a 'Free of Capture & Seizure' (FC&S) clause. What is the practical effect of this clause on their coverage for these shipments?
- AIt provides automatic coverage for general average sacrifices.
- BIt broadens coverage to include acts of war, strikes, and riots.
- CIt limits coverage to only total loss of the vessel and cargo.
- DIt excludes coverage for losses caused by acts of war, strikes, riots, and civil commotion.
Show answer & explanationAnswer & explanation
Correct answer: D. It excludes coverage for losses caused by acts of war, strikes, riots, and civil commotion.
The Free of Capture & Seizure (FC&S) clause is a standard exclusion in Ocean Marine policies. It explicitly removes coverage for losses arising from war, hostile acts, strikes, riots, and civil commotions. For these perils, separate war risk insurance is typically purchased.
Why the other options are wrong
- A. General average sacrifices are typically covered under the main policy or a separate clause, unrelated to FC&S.
- B. This is incorrect; the FC&S clause is an exclusion, not a broadening of coverage.
- C. The FC&S clause addresses specific perils, not the extent of loss covered (total vs. partial).
Free of Capture & Seizure (FC&S) Clause
A standard exclusion in Ocean Marine policies that removes coverage for losses caused by war, strikes, riots, civil commotion, and similar perils. Separate war risk insurance is needed to cover these excluded events.
- Standard Ocean Marine exclusion.
- Excludes war, strikes, riots, civil commotion.
- Requires separate war risk insurance for coverage.
Memory trick: Sea Perils: Some Fights Are Excluded