CAIB 3 || Most Recent Exam 2026-2027 Actual Complete Real
Exam Questions And Correct Answers (Verified Answers)
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Valuation Clause - Cargo - ANSWER -Establishes the value of
cargo for insurance.
Components:
-Invoice cost.
-Freight charges.
-Other expenses (packing, inland freight, etc.).
-Duties and taxes.
-Plus 10% (for profit margin or value increases).
Cargo - Basis of Settlement - ANSWER -Percentage of Insured
Value Lost:
Claims settled based on the percentage of the insured value
lost.
Example: If damage is 40% of the value, 40% of the insured
amount is paid.
- ensures that the insurer doesn't pay for 100% if underinsured
-allows for overpayment if the cargo is overinsured
(insd cant deliberately cause claim [sinking ship] and Valuation
Clause prevents unrealistic values
,Total Loss: Full insured amount is paid.
Example 1:
Cargo value: $100,000.
Insured for: $80,000.
Damage: 50% of value.
Payment: $40,000 (50% of insured value).
Example 2:
Insured for: $100,000.
Cargo value: $75,000.
Damage: 20% of value.
Payment: $20,000 (20% of insured value).
Cargo - Advantages of Percentage based Settlements -
ANSWER -Speed:
Claims can be settled
quickly.
Simplicity: Only the immediate market value needs
to be known.
Fairness: Adjusts for underinsurance or
overinsurance.
Institute Cargo Clauses (ICC) [Three main types] -
ANSWER -: ICC (A): All Risks (except exclusions)
ICC (B): Named Perils (specific ex fire, explosion, peril of sea)
ICC (C): Named Perils (more limited).
INCOTERMs - ANSWER -International Commercial Terms.
,International rules defining seller's obligations in shipping.
EX WORKS - ANSWER -Buyer handles all costs and insurance.
CIF (cost, insurance, freight) - ANSWER -Seller buys
insurance per buyer's
request.
Free on Board (FOB) - ANSWER -Buyer responsible for
insurance once goods
onboard.
Bill's of Lading (3 purposes) - ANSWER -serves as:
-contract of carrier (between ship-owner & shipper (seller) =
bill's of lading
-receipt of goods (doc receipt, clean bill, count bill, onboard
bill)
-docs of title to goods - indicates receiver or consignee
Straight Bill of Lading - ANSWER -Delivers goods to named
consignee only.
Consignee = has right to possess
property (buyer)
Used when: goods paid by buyer, credit
arrangement between
shipper/consignee, or shipper & consignee are same
interest (same org)
, Order Bill of Lading - ANSWER -Allows third parties to receive
goods on behalf
of Consignee i.e. freight
forwarder/trucker
Released Bill of Lading - ANSWER -No specific value declared;
carrier liable for
$500/package.
Valued Bill of Lading - ANSWER -Value declared; carrier
liable for declared
amount.
Optional Stowage Bill - ANSWER -Carrier decides where to stow
the goods.
On Deck Bill of Lading - ANSWER -Cargo stowed on deck at
shipper's risk.
Clean Bill of Lading - ANSWER -No damage noted at
acceptance; crucial for
perishables.
Count Bill of Lading - ANSWER -Shows number of units
shipped, evidence of
receipt.
Individual Cargo Policy - ANSWER -Used for single or
irregular shipment
Exam Questions And Correct Answers (Verified Answers)
Already Graded A+ | Guaranteed Success!! Newest Exam |
Just Released!!
Valuation Clause - Cargo - ANSWER -Establishes the value of
cargo for insurance.
Components:
-Invoice cost.
-Freight charges.
-Other expenses (packing, inland freight, etc.).
-Duties and taxes.
-Plus 10% (for profit margin or value increases).
Cargo - Basis of Settlement - ANSWER -Percentage of Insured
Value Lost:
Claims settled based on the percentage of the insured value
lost.
Example: If damage is 40% of the value, 40% of the insured
amount is paid.
- ensures that the insurer doesn't pay for 100% if underinsured
-allows for overpayment if the cargo is overinsured
(insd cant deliberately cause claim [sinking ship] and Valuation
Clause prevents unrealistic values
,Total Loss: Full insured amount is paid.
Example 1:
Cargo value: $100,000.
Insured for: $80,000.
Damage: 50% of value.
Payment: $40,000 (50% of insured value).
Example 2:
Insured for: $100,000.
Cargo value: $75,000.
Damage: 20% of value.
Payment: $20,000 (20% of insured value).
Cargo - Advantages of Percentage based Settlements -
ANSWER -Speed:
Claims can be settled
quickly.
Simplicity: Only the immediate market value needs
to be known.
Fairness: Adjusts for underinsurance or
overinsurance.
Institute Cargo Clauses (ICC) [Three main types] -
ANSWER -: ICC (A): All Risks (except exclusions)
ICC (B): Named Perils (specific ex fire, explosion, peril of sea)
ICC (C): Named Perils (more limited).
INCOTERMs - ANSWER -International Commercial Terms.
,International rules defining seller's obligations in shipping.
EX WORKS - ANSWER -Buyer handles all costs and insurance.
CIF (cost, insurance, freight) - ANSWER -Seller buys
insurance per buyer's
request.
Free on Board (FOB) - ANSWER -Buyer responsible for
insurance once goods
onboard.
Bill's of Lading (3 purposes) - ANSWER -serves as:
-contract of carrier (between ship-owner & shipper (seller) =
bill's of lading
-receipt of goods (doc receipt, clean bill, count bill, onboard
bill)
-docs of title to goods - indicates receiver or consignee
Straight Bill of Lading - ANSWER -Delivers goods to named
consignee only.
Consignee = has right to possess
property (buyer)
Used when: goods paid by buyer, credit
arrangement between
shipper/consignee, or shipper & consignee are same
interest (same org)
, Order Bill of Lading - ANSWER -Allows third parties to receive
goods on behalf
of Consignee i.e. freight
forwarder/trucker
Released Bill of Lading - ANSWER -No specific value declared;
carrier liable for
$500/package.
Valued Bill of Lading - ANSWER -Value declared; carrier
liable for declared
amount.
Optional Stowage Bill - ANSWER -Carrier decides where to stow
the goods.
On Deck Bill of Lading - ANSWER -Cargo stowed on deck at
shipper's risk.
Clean Bill of Lading - ANSWER -No damage noted at
acceptance; crucial for
perishables.
Count Bill of Lading - ANSWER -Shows number of units
shipped, evidence of
receipt.
Individual Cargo Policy - ANSWER -Used for single or
irregular shipment
