Answered: A's cargo ship base was punctured due…

A's cargo ship base was punctured due to rats and so sea water entered and cargo was damaged. Here there are two causes for the damage of the cargo ship -

Financial Accounting Intro Concepts Meth/Uses

14th Edition

ISBN:9781285595047

Author:Weil

Publisher:Weil

Chapter4: Balance Sheet: Presenting And Analyzing Resources And Financing

Section: Chapter Questions

Problem 9Q

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Question

A's cargo ship base was punctured due to rats and so sea water entered and cargo was damaged. Here there are two causes for the damage of the cargo ship -

(i) The cargo ship getting punctured

because of rats, and

(ii) The sea water entering ship through puncture. The cargo ship was insured with B. What do you think?

1. Whether B pays an insurance claim to A in this scenario, give reason?

2. State the different principles of Insurance and explain the one on the basis of which this case is decided.

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