Question

X Company signed a CIF contract to export candies. The cargo was insured for all risks. Due to the long voyage, candies absorbed sweating in the ship's hold, and thus softened and degraded. Was the insurance company liable for the damage? Why or why not?

A. Yes, because the cargo was insured for all risks.

B. No, because the damage occurred due to the natural conditions of the voyage.

C. Yes, because candies are perishable goods.

D. No, because the contract was CIF.

Answer 1

The insurance company would likely be liable for the damage to the candies in this situation because the cargo was insured for all risks. The CIF contract and the insurance coverage should protect against damages caused by natural conditions during the voyage.

Step-by-step explanation:

The insurance company would likely be liable for the damage to the candies in this situation because the cargo was insured for all risks. Under a CIF (Cost, Insurance, and Freight) contract, the seller is responsible for delivering the goods to the buyer at the destination port and obtaining insurance for the goods during transit. Therefore, any damage that occurs to the goods during the voyage would be the responsibility of the insurance company.

The fact that the candies absorbed sweating in the ship's hold, which softened and degraded them, does not absolve the insurance company of its liability. The insurance coverage would typically include damages caused by natural conditions during the voyage, such as humidity or temperature fluctuations.

In conclusion, the correct answer is A. Yes, because the cargo was insured for all risks.