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 from Europe to the United States via ocean cargo. They are concerned about the potential for loss or damage due to hostile acts during transit, as well as confiscation by foreign governments. Which specific clause or endorsement in an Ocean Marine policy would provide coverage for these types of risks?
- AFree of Capture & Seizure (FC&S) Clause
- BStrikes, Riots, and Civil Commotions (SR&CC) Clause
- CAll Risks Clause
- DWar Risks Clause
Show answer & explanationAnswer & explanation
Correct answer: D. War Risks Clause
The War Risks Clause in an Ocean Marine policy specifically covers losses due to war, civil war, revolution, rebellion, insurrection, or hostile acts by or against a belligerent power, including acts of terrorism and confiscation by governments. This clause is typically added by endorsement as it's usually excluded by standard policies.
Why the other options are wrong
- A. The FC&S Clause is an exclusion that removes coverage for war-related perils, requiring a separate endorsement to reinstate it.
- B. The SR&CC Clause covers losses due to strikes, riots, and civil commotions, which are distinct from war or hostile government acts.
- C. An All Risks Clause covers all perils not specifically excluded, but war risks are typically a standard exclusion that requires a specific War Risks Clause to be added back.
Ocean Marine: War Risks Clause
An endorsement to an Ocean Marine policy that provides coverage for losses or damages to cargo or vessels arising from acts of war, civil war, rebellion, insurrection, hostile acts, and governmental confiscation. These perils are typically excluded by default in standard policies.
- Covers war, hostile acts, and government confiscation.
- Added by endorsement, as it's excluded from standard policies.
- Distinct from SR&CC and FC&S clauses.
Memory trick: Ocean Marine: 'WAR' on the waves, not just 'WEATHER' woes.