Question

Indicate whether this loss is Covered/Not covered:

"Sometimes shipments may begin their journey before all parties have been notified. In fact, your clients were notified just today about such a shipment. They immediately purchased coverage to protect their interest. Two hours later, they were notified that the ship carrying their goods sank at sea three days ago."

A) Covered
B) Not Covered

Answer 1

The loss of goods sunk at sea is not covered by the insurance policy because the policy was purchased after the goods had already been lost, which is a condition not generally covered by insurance.

Step-by-step explanation:

The scenario presented indicates that the coverage was purchased after the loss of the goods had already occurred. Insurance policies typically cover losses that happen after the policy has gone into effect. Given that the clients bought the insurance to protect their interest in the shipment after it had already sunk at sea, this loss would not be covered. This event occurred before the insurance policy was in place, making any claims for this particular incident invalid.