Florida 2-20 General Lines Agent (Property, Casualty, Commercial Lines and Florida Law)Commercial LinesHard
A Florida-based import/export company regularly ships high-value, unique artwork and antique artifacts globally. Their standard Ocean Marine policy covers basic perils for cargo. However, they are concerned about losses from non-standard perils like war, strikes, riots, or civil commotions, which are typically excluded. What specific type of coverage would address these excluded perils for their cargo?
- AWar, Strikes, Riots, and Civil Commotions (SR&CC) clauses.
- BGeneral Average coverage.
- CFreight coverage.
- DProtection and Indemnity (P&I) coverage.
Show answer & explanationAnswer & explanation
Correct answer: A. War, Strikes, Riots, and Civil Commotions (SR&CC) clauses.
Standard Ocean Marine cargo policies typically exclude perils like war, strikes, riots, and civil commotions. To cover these specific risks, an insured must add specific clauses or endorsements, often referred to as War, Strikes, Riots, and Civil Commotions (SR&CC) clauses, which extend coverage beyond the basic 'perils of the sea.'
Why the other options are wrong
- B. General Average deals with shared losses when a voluntary sacrifice is made to save the entire venture, not specific perils like war or strikes.
- C. Freight coverage protects against the loss of shipping income, not damage to the cargo itself.
- D. P&I coverage addresses third-party liabilities, not direct damage to the insured's own cargo from specific perils.
Ocean Marine War & SR&CC
Specific clauses or endorsements in Ocean Marine insurance that extend cargo coverage to include perils of war, strikes, riots, and civil commotions, which are typically excluded from standard policies.
- Addresses non-standard, political, and social unrest risks.
- Must be specifically added to a basic cargo policy.
- Crucial for shipments to volatile regions.
Memory trick: SR&CC: Safeguard Risky Cargo from Chaos.