A commercial fishing operation based in Florida regularly sends its vessels into international waters. They are concerned about potential losses resulting from piracy or seizure by foreign governments. Which specific coverage part of an Ocean Marine policy would address these risks?
- AHull Coverage
- BProtection and Indemnity (P&I)
- CWar and Strikes, Riots, and Civil Commotion (SR&CC) Clause
- DCargo Coverage
Show answer & explanationAnswer & explanation
Correct answer: C. War and Strikes, Riots, and Civil Commotion (SR&CC) Clause
Ocean Marine policies typically exclude war, piracy, and civil commotion risks under standard coverage. These perils are usually added back through a specific clause, often referred to as the War and Strikes, Riots, and Civil Commotion (SR&CC) Clause, which provides coverage for such extraordinary events.
Why the other options are wrong
- A. Hull Coverage protects the vessel itself from perils of the sea, but typically excludes war and piracy.
- B. P&I coverage protects the shipowner against third-party liabilities, such as bodily injury or property damage to others, not the vessel or cargo from acts of war or piracy.
- D. Cargo Coverage protects the goods being transported, not the vessel, and usually excludes war and piracy.
Ocean Marine War and SR&CC Clause
This clause adds back coverage for perils typically excluded from standard Ocean Marine policies, such as war, piracy, seizure, strikes, riots, and civil commotions, which can cause significant loss to vessels or cargo.
- Covers perils of war, including piracy and seizure.
- Often purchased as an add-on or separate policy.
- Addresses political and social unrest risks at sea.
Memory trick: When the seas get rough with 'War' and 'Pirates', standard policies won't save your 'Hull' or 'Cargo' unless you've got that special clause!