Types of Freight Claims

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Questions and Answers

What is the primary purpose of a freight claim?

To demand payment for all lost profits.

To seek financial reimbursement for loss or damage of a shipment. (correct)

To negotiate better shipping terms for future deliveries.

To fulfill the initial terms of the invoice.

Which type of freight claim occurs when part of a load is damaged?

Concealed Damage Claim

Loss Freight Claim

Shortage Freight Claim

Damage Freight Claim (correct)

Which of the following is NOT classified as a type of cargo claim?

Concealed Shortage Claim

Delayed Delivery Claim (correct)

Loss Claim

Damaged Claim

What type of claim is made when there is a total loss of an order?

Loss Freight Claim Signup and view all the answers

Which document is considered crucial for proving the movement of goods in a freight claim?

Bill of Lading Signup and view all the answers

Which type of freight claim arises when products are discovered damaged only after unpacking?

Concealed Damage Claim Signup and view all the answers

What kind of damages does marine cargo insurance typically cover?

Losses sustained due to acts of war Signup and view all the answers

The recipient denying acceptance of an entire order is categorized as what type of claim?

Refused Claim Signup and view all the answers

What is the primary purpose of the statement of claim in a damage situation?

To define the commodity damaged and extent of loss Signup and view all the answers

Which document is NOT typically used for value verification in claims?

Quality Assessment Report Signup and view all the answers

What types of damages are covered by Hull & Machinery Insurance?

Explosions and Accidents during loading Signup and view all the answers

What is essential to include when taking photos of damaged goods for a claim?

Close-up shots of damage and distance shots Signup and view all the answers

Which of the following is considered evidence of the value of damaged goods?

Repair Quote Signup and view all the answers

Which scenario would be covered by Hull & Machinery Insurance?

Theft of cargo by an outsider Signup and view all the answers

Which document is essential for the claims process if goods are damaged in transit?

Temperature Monitoring Report Signup and view all the answers

What type of liability is a ship owner trying to avoid with Hull & Machinery Insurance?

Loss of vessel due to accidents or perils Signup and view all the answers

Which type of marine hull insurance specifically covers the risks associated with the construction of a ship?

Ship builders risks Signup and view all the answers

What does the Limited Liability Rule imply regarding a shipowner's financial responsibility?

The shipowner's liability is capped at their interest in the vessel. Signup and view all the answers

Which coverage option provides protection against risks faced by vessels operating on inland waterways?

Operational cover Signup and view all the answers

What is one of the advantages of Marine Hull insurance related to documentation?

Sum assured aligns with the agreed value of the vessel. Signup and view all the answers

In what year did the Convention on Limitation of Liability for Maritime Claims enter into force?

1986 Signup and view all the answers

Which peril is specifically mentioned as covered by Marine Hull insurance?

Robbery Signup and view all the answers

What does the term 'pleasure craft cover' primarily refer to?

Insurance for personal recreational boats Signup and view all the answers

Which option provides a flexible plan for marine hull insurance for specific journeys?

Voyage cover Signup and view all the answers

What is the primary purpose of Lloyd's Open Form (LOF) 1980?

To guarantee a reward for salvage services Signup and view all the answers

What issue did the Special Compensation P&I Club Clause address?

Shortcomings of the 1989 Convention Signup and view all the answers

How does errors and omissions insurance primarily benefit professionals in the shipping industry?

It protects against costs from lawsuits and negligence claims Signup and view all the answers

What trend is primarily contributing to the rising claims against freight forwarders?

Increased complexity of the supply chain Signup and view all the answers

What does E&O coverage specifically compensate for in the shipping industry?

Legal liabilities from professional negligence Signup and view all the answers

Which convention specifically relates to the limitation of liability for maritime claims?

Convention on Limitation of Liability for Maritime Claims, London 1976 Signup and view all the answers

What does the Lloyd's Open Form (LOF) primarily govern?

Marine salvage operations Signup and view all the answers

What principle governs the determination of a salvage reward under the LOF?

Value of the ship, cargo, freight, and complexity of the salvage Signup and view all the answers

What was a significant innovation in the Lloyd's Open Form in 1980?

Inclusion of dispute resolution provisions Signup and view all the answers

Which legislative document in Sri Lanka currently references maritime law from England?

Civil Law Ordinance No. 5 of 1852 Signup and view all the answers

Under the LOF agreement, what happens if the salvor does not successfully save the ship or cargo?

The salvor receives nothing. Signup and view all the answers

What is the primary purpose of the 1924 International Convention?

To limit liability of shipowners Signup and view all the answers

Which of the following is NOT a convention dealing with shipowner liability?

Lloyd's Open Form Signup and view all the answers

Study Notes

Freight Claims Overview

Freight claims are legal demands for financial reimbursement from a carrier due to the loss or damage of shipments.
Key types of freight claims include shipping, cargo, transportation, and loss and damage claims.
Essential aim: Ensure compliance with terms noted on the Bill of Lading; lost profits are not reimbursed.

Common Types of Freight Claims

Damage Freight Claims: Partial or total loss affecting the shipment's value.
Loss Freight Claims: Entire orders lost and not delivered.
Shortage Freight Claims: Multiple items missing, leading to complete order denial.
Concealed Damage Claims: Damage or shortages not visible until unboxing.
Refused Claims: Recipient denies acceptance of the entire order.

Cargo Claims

Cargo claims seek compensation for losses caused by breaches in the contract of carriage or carrier failures.
Types of cargo claims include damaged, concealed damaged, shortage, concealed shortage, refused, and loss claims.

Marine Cargo Insurance Coverage

Covers damages due to natural disasters, collisions, acts of war, piracy, cargo abandonment, and customs rejection.

Critical Cargo Claims Documents

Transportation Documents: Include Bill of Lading, Airway Bill, Ocean Bill, and Truck Bill detailing shipment specifics.
Delivery Documentation: Proof of delivery for goods, e.g., signed receipts and receiving sheets.
Statement of Claim: Details of the loss including the extent and value of damage.
Value Verification: Evidence of the value of lost or damaged goods, such as invoices and sales contracts.
Photos: Required for documenting the condition of damaged goods.

Additional Useful Information for Claims Process

Quality Assessment Reports, Temperature Monitoring Reports, Police or Accident Reports, Repair Quotes, and Proof of Disposal can enhance claim efficiency.

Hull & Machinery Insurance

Provides protection for the vessel's hull and machinery against various perils, e.g., fire, collision, and crew negligence.
Types include operational cover, voyage cover, ship builders risks, and protection and indemnity liability.

Advantages of Marine Hull Insurance

Comprehensive coverage against a range of risks.
Flexible plans for specific journeys or time frames.
Coverage for inland vessels against diverse risks.
Straightforward documentation aligned with agreed vessel values.

Limitation of Liability Rule

Limits shipowners' liability to the value of their vessel; total loss extinguishes liability.
Governed by international conventions, including the 1976 LLMC, which supersedes earlier conventions.

Lloyd's Open Form (LOF)

Standard contract for marine salvage operations globally recognized.
Contains no predetermined salvage fee; payment determined post-salvage efficiency.
Innovations in LOF 1980 emphasized environmental salvage and added dispute resolution provisions.

Errors and Omissions Insurance (E&O)

Protects against costs from lawsuits due to errors in work or advice.
Essential in shipping for handling liabilities arising from complex supply chains and increased regulations.
Designed to cover legal liabilities for negligent acts and associated defense costs.

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Description

This quiz explores the various types of freight claims, including shipping claims, cargo claims, and loss and damage claims. Understand the legal demands placed on carriers for reimbursement due to shipment issues. Test your knowledge on how these claims work in logistics.