Chapter 5: Inland and Ocean Marine Insurance

contractors equipment floater

-a policy that covers mobile equipment or tools while located anywhere in the coverage territory -normally contains a schedule that lists each piece of equipment and its corresponding limit of insurance -may be provided for named perils only or on an open perils basis -frequently include rental reimbursement coverage

valuation of property - cargo insurance

-amount of invoice + freight + 10% -ordinarily subject to a maximum limit of insurance for cargo shipped on any one vessel -usually subject to a dollar deductible

three most common types of ocean marine insurance policies

-cargo -hull -protection and indemnity

parties for which ocean marine loss exposures exist

-cargo owners (shippers) -vessel owners -carriers

nonfiled inland marine insurance

-contractor's equipment -builders risk -transit -motor truck cargo liability -difference in conditions -electronic data processing equipment -bailees -instrumentalities of transportation and communication

trip transit policy

-covers a particular shipment of goods specified in the policy -purchased by occasional shippers

motor truck cargo liability policy

-covers a trucker's liability for damage to cargo of others being transported by the trucker -can be either named perils or open perils -certain types of valuable property likely to be targeted by thieves are commonly excluded -property is covered only while in or on a land vehicle operated by the insured or while located at the insured's terminal

annual transit policy

-covers all shipments made or received by the insured throughout a one year policy period -excluded property: contraband, property attractive to thieves, and other high risk commodities -most are covered on an open perils basis -most cover only within the US, Alaska, and Canada -property is usually valued at the amount of invoice, including shipping charges

electronic data processing equipment floater

-covers computer equipment, software, and electronic data owned by the insured, as well as similar property of others in the insured's care, custody, or control -many cover perils not usually covered, such as mechanical or electrical breakdown -usually includes coverage for extra expenses as the result of covered loss -business income coverage can often be added upon insured's request -usually provided on open perils basis but without all the exclusions found in the special causes of loss form -equipment valuation: ACV, RC, or upgraded value -data and media valuation: actual cost of reproduction or agreed value

accounts receivable coverage form

-covers losses resulting from destruction of the insured's records of accounts receivable -also covers the cost to reconstruct accounts receivable records, interest on loans made necessary by an inability to collect accounts receivable, and increased collection costs resulting from loss of records -coverage may be written on either a reporting or nonreporting form

floor plan coverage form

-covers merchandise that is being held for sale and financed through a floor plan -may be used to insure the dealer's interest in the merchandise, the lender's interest in it, or both

signs coverage form

-covers neon, fluorescent, automatic, or mechanical signs -each sign must be scheduled with its own limit of insurance

transit insurance

-covers owners of property against damage to their property while in the course of transit by land, air, or water carriers -two types available: trip transit policy and annual transit policy

warehouse to warehouse clause

-covers the insured cargo during the ordinary course of transit (including land transit) from the time the cargo leaves the point of shipment until it is delivered to its final destination -often supplemented by the marine extension clauses, which expand the coverage to include unavoidable deviations from the ordinary course of transit or delays caused by natural disasters, orders of civil authorities, or strikes of port workers

physicians and surgeons equipment coverage form

-covers the professional equipment, materials, supplies, and books of physicians, surgeons, and dentists -also covers the insured's office equipment and improvements and betterments that the insured has made to a leased building

bailees insurance

-first approach: covers loss to customer's goods only if the insured bailee is legally liable for the loss -second approach: covers damage to customer's goods, regardless of liability -> bailees' customers policy

cargo insurance

-insurance that covers loss of or damage to property shipped primarily by water or, if in foreign trade, by air -voyage policy: covers cargo for a single trip -open cargo policy: covers all goods shipped or received by the insured during the policy's term; does not have an end date -usually written on an open perils basis

hull insurance

-insurance that covers physical damage to vessels, including their machinery and fuel but not their cargo -also covers provisions and stores for the operation of the vessel -usually covered on a named perils basis -covered causes of loss: perils of the seas; fire, lightning, and earthquake; barratry; all other like perils -normally insured for a value agreed upon by the insurer and the insured -most contain a collision liability clause, which covers the insured's liability for collision damage to other vessels and their cargoes

protection and indemnity insurance

-insurance that covers shipowners against various liability claims due to operating the insured vessel

nonfiled classes of business

-neither policy forms nor rates must be filed with the state insurance department -characterized by a relatively small number of potential insureds, diverse loss exposures, or both

available endorsements to physicians and surgeons coverage

-office equipment while off premises for no more than 30 days -extra expenses following a covered loss -money and stamps on premises -personal effects of the insured or others while on premises -valuable records

filed classes of business

-policy forms and/or rates must be filed with the state insurance department -characterized by a large number of potential insureds and reasonably homogeneous loss exposures

builders risk policy

-policy that covers a building in the course of construction, including building materials and supplies while on or away from the building site -usually covers losses on an open perils basis, and many insurers provide coverage for losses usually excluded, such as flood, earthquake, and theft of building materials -many insurers offer a soft costs coverage endorsement

difference in conditions policy

-policy that covers on an "all risks" basis to fill gaps in the insured's commercial property coverage, especially gaps in flood and earthquake coverage

filed inland marine insurance

-provide coverage on an open perils basis -typically valued at ACV

installation floater

covers a contractor's interest in building supplies or fixtures that the contractor has been hired to install

film coverage form

covers exposed motion picture film and magnetic tapes or videotapes, including related soundtracks or sound records

commercial articles coverage form

covers photographic equipment and musical instruments used by photographers, motion picture producers, professional musicians, and others

valuable papers and records coverage form

covers printed or otherwise recorded items such as an architect's blueprints and plans, as well as the cost of necessary research to reconstruct the records

instrumentalities of transportation and communication policy

covers property essential to transportation or communication, such as bridges, tunnels, pipelines, and radio and television broadcasting equipment

theatrical property coverage form

covers stage scenery, costumes, and other personal property used in theatrical productions

camera and musical instrument dealers coverage form

covers the inventory of camera dealers or musical instrument dealers and similar property of others in the insured's care, custody, or control

equipment dealers coverage form

covers the inventory of dealers that sell agricultural or construction equipment

jewelers block coverage form

covers the merchandise of retail jewelers, including similar property of others in the insured's care, custody, or control

soft costs coverage endorsement

covers various incidental expenses that might result from a physical loss to a building project, such as additional interest, advertising expenses, or real estate taxes

inland marine insurance

insurance that covers many different classes of property that typically involve an element of transportation

marine insurance

insurance that, in the US, includes both ocean and inland marine coverage and, in the rest of the world, is limited to insurance for vessels and cargo

general average

partial loss that must, according to maritime law, be shared by all parties to a voyage (cargo owners and vessel owner)

cargo insurance rating factors

past loss experience, the product being shipped, the type of packing, the trade route, the time of year, the volume of shipments, port conditions, the ocean and inland carriers, the shipper's reputation and quality of management

hull and protection and indemnity rating factors

past loss experience, the size, type and age of the insured vessel, the area of navigation, the trade in which the vessel is employed, the nation in which the vehicle is registered, and the vessel owner's reputation and quality of management

nationwide marine definition

statement of the types of property that may be insured on inland marine and ocean marine forms

mail coverage form

written for banks, trust companies, insurance companies, investment brokers, and other financial institutions that frequently ship securities and other valuable items through government postal service