Helen, an agent for a marine insurer, is reviewing the renewal policy of her freight...

The correct answer is A. If the firm has a claim in the United States, the insurer may deny coverage . Freight forwarders face liability and cargo-related exposures that depend heavily on territory, routes, contractual obligations, jurisdictions, and applicable law. A policy written for Canadian operations may not automatically respond to United States exposures unless the territorial limits, policy wording, liability conditions, and rating basis contemplate U.S. operations. The United States is a higher-risk jurisdiction for many liability classes because of litigation frequency, defence costs, larger awards, and different contractual requirements. If the firm has already expanded into U.S. operations during the current term, the existing policy must be amended so the current exposure is properly declared and covered. The renewal policy must also be updated because the exposure will continue into the next term. Option B is too severe based on the facts; not every late disclosure automatically voids coverage. Option C is incorrect because a new policy and rescission are not necessarily required. Option D is not the central insurance issue. The practical underwriting issue is territorial coverage. Course topic reference: Manufacturers, Distributors, and Freight Forwarders; Marine and Transportation Risks; Territorial Limits; U.S. Exposure; Renewal Review .

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