INS 23 Assignment 5: Inland and Ocean Marine Insurance

The compensation the carrier receives for transporting cargo.

A carrier that is prevented by an accident from delivering the cargo aboard its ship may face an exposure called loss of freight, which is

Filed: are the classes of inland marine business for which the policy forms and/or rates must be filed with the state insurance department. Characterized by large # of potential insureds and reasonably homogeneous loss exposures Nonfiled: are the classes of inland marine business for which neither policy forms nor rates must be filed with the state insurance department. The classes vary by state.

Filed vs/ Non Filed Classes of Business

Personal effects of the insured or others while on premises

For which one of the following must coverage be added by endorsement to the filed inland marine Physicians and Surgeons Equipment Coverage Form?

Restrict the underwriting powers of marine insurers to specified types of property.

In 1933, the National Association of Insurance Commissioners adopted a Nationwide Marine Definition to

marine insurers

In the early 1900s, the inventories of jewelry stores, property while in the course of inland transit, tourists' baggage, and even bridges were typical inland properties insured by which one of the following types of insurer?

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

Nonfiled classes of inland marine insurance

serious misconduct by the vessel's master or crew that is contrary to the owner's interest, such as a fraudulent or criminal act that caused damage to the vessel

One of the specified causes of loss in a ocean marine hull insurance policy is "barratry" What does that mean?

have become standardized to an extent for policies that are widely written

Rates for the traditionally nonfiled classes of inland marine insurance..

the ISO commercial lines manual

Rating methods for the filed ISO commercial inland marine forms are based on procedures established by who?

Permitted a single insurer to offer fire, casualty, and marine coverages.

The Nationwide Marine Definition was no longer needed following the enactment of legislation in the 1950s that

The Insurance Services Office (ISO) and the American Association of Insurance Services (AAIS) file forms and rates for many of these classes on behalf of their member companies.

What best describes how forms and rates for filed classes of inland marine insurance are filed?

Shippers use it because their property may be damaged in circumstances under which a carrier has no legal obligation to pay the shipper's loss.

What best describes the purpose served by transit insurance?

Soft costs coverage

What can be added to a builders risk policy to cover various incidental expenses that might result from a physical loss to a building project, such as additional interest, advertising expenses, or real estate taxes

an insured can use the inland marine form to obtain a higher coverage limit than the insurer is willing to include in a package policy

What is a reason why insureds purchase the filed inland marine accounts receivable coverage form?

Protection & Indemnity Insurance

What ocean marine insurance policy or clause covers an insured shipowner's liability for damage to cargo of others being transported by the insured on the ship?

Hull Insurance

What ocean marine insurance policy or clause covers the damage to an insured's ship if the insured ship collides with an object in the harbor?

Hull insurance policy

What ocean marine insurance policy or clause covers the damage to an insured's ship if the insured ship collides with an object in the harbor?

An insured can use the inland marine form to obtain a higher coverage limit than the insurer is willing to include in a package policy.

Which one of the following best describes a reason why insureds purchase the filed inland marine Accounts Receivable Coverage Form?

Warehouse operator's legal liability policy

Which one of the following is a common example of a bailee's coverage form that covers loss to customers' goods only if the insured bailee is legally liable for the loss?

Many cover special perils such as mechanical or electrical breakdown, and they may also insure covered property while it is in transit or at unlisted locations.

Which one of the following statements is correct with respect to electronic data processing equipment floaters?

Some policies limit coverage to losses caused by specified perils.

Which one of the following statements is correct with respect to motor truck cargo liability insurance?

contractors equipment floater

a policy that covers mobile equipment or tools while located anywhere in the coverage territory

retention

a risk financing technique by which losses are retained by generating funds within the organization to pay for the losses

Film Coverage Form

covers exposed motion picture film and magnetic tapes or videotapes, including related soundtracks or sound records. The amount of insurance reflects the cost of re-shooting the film if it is lost or damaged

Accounts Receivable Coverage Form

covers losses (including uncollectable accounts) resulting from destruction of the insured's records of accounts receivables. The insurer pays the amount of accounts receivable the insured is unable to collect because of the destruction of records. The form also covers the cost to reconstruct accounts receivable records, interest on loans made necessary by an inability to collect accounts receivable, and increased collection cots resulting from loss of records

Floor Plan Coverage Form

covers merchandise that is being held for sale and financed through a floor plan. This coverage form may be issued 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. The covered signs must be scheduled with a limit of insurance shown for each item. This form is used by many businesses because commercial property coverage forms severely limit coverage for signs

Commercial Articles Coverage Form

covers photographic equipment and musical instruments used commercially 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.

Theatrical Property Coverage Form

covers stage scenery, costumes, and other personal property used in theatrical productions. It covers similar property of others in the insureds care as well as property owned by the insured. The insured must have used or intend to use the property in a production stated in the declarations

Jewelers Block Coverage Form

covers the merchandise of retail jewelers, including similar property of others in the insured's care, custody, or control. It was designed to meet the needs of small retail jewelers. Depending on the nature of the insured's operations, this can either be filed or nonfiled.

Physicians and Surgeons Equipment Coverage Form

covers the professional equipment, materials, supplies, and books of physicians, surgeons, and dentists. It also covers the insured's office equipment and (if the insured is a tenant) improvements and betterment that the insured made to a leased building Coverage that can be added by endorsement: -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

Camera and Musical Instrument Dealers Coverage Form

covers the stock in trade (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 stock in trade of dealers that sell agricultural or construction equipment. The form also covers similar property of others in the insured's care, custody, or control

only includes the continental US, Alaska, and Canada, including airborne shipments between these places

describe the coverage territory of many annual transit policies

filed classes of inland marine are characterized by a large number of potential insureds and reasonably homogeneous loss exposures. Nonfiled classes are characterized by a relatively small number of potential insureds, diverse loss exposures, or both

distinguish between the characteristics of filed classes of inland marine and those of non filed classes

the sue and labor clause covers the cost of reasonable measures that the insured is required to take to protect property from damage at the time of a loss

explain how each of these clauses affect the coverage provided in a cargo policy - sue and labor clause

the warehouse to warehouse clause covers the insured cargo during the ordinary course of transit from the time the cargo leaves the point of shipment until it is delivered to its final destination, including inland transit

explain how each of these clauses affect the coverage provided in a cargo policy - warehouse to warehouse clause

under a hull policy, a vessel is normally insured for a value agreed on by the insurer and the insured. For a total loss, the insurer pays the agreed value. For a partial loss, the insurer pays the cost of repairs

explain how property is normally valued under a hull policy

judgment rating is used by underwriters to rate one of a kind risks. Judgment risks requires a thorough knowledge of the class of business for which coverage is being written. An inland marine underwriter might have to draw on expertise in any of several specialized fields- fine arts, heavy equipment, construction, or communications- to determine an adequate rate for the unique risks that are eligible for coverage

explain inland marine underwriters' use of judgment rating

to determine whether a particular coverage is marine insurance under their form and rate filing laws. Typically, commercial inland and ocean marine insurance is subject to less rate and form regulation than other lines of insurance

for what reason do states continue to use the updated nationwide marine definition?

a voyage policy covers cargo for a single trip specified in the policy. An open cargo policy covers all goods shipped or received by the insured during the policy's terms

how does a voyage cargo policy differ from an open cargo policy

collision liability coverage is a separate amount of insurance covering the insured's liability for collision damage to other vessels and their cargoes. Liability for bodily injury from the collision is not covered. Defense costs are covered in addition to the limit of collision liability insurance

how does the collision liability clause affect the coverage provided by a hull policy

the contents of the doctor's medical bad would be covered by the physicians and surgeons equipment coverage form

identify a filed inland marine coverage for that would be appropriate for each of the follow: - a medical doctor who treats homebound patients needs a policy to cover he contents of her medical bag

the professional photographers cameras and equipment would be covered by the commercial articles coverage form

identify a filed inland marine coverage for that would be appropriate for each of the follow: - a professional photographer needs coverage for his cameras and other equipment

the store owner's business record would be covered by the accounts receivable coverage form

identify a filed inland marine coverage for that would be appropriate for each of the follow: - a store owner wants to insure his business records because he is concerned that damage to these records will make him unable to collect outstanding debts

The dry cleaning business would be covered by a bailees' customers policy

identify the type of non filed inland marine insurance policy that would provide coverage for each of the following: - Ian owns a dry cleaning business and wants to cover customers' goods without regard to his legal liability

as the insured bailee, Smith Warehouse can obtain legal liability coverage for property of others through a warehouse operator's legal liability policy

identify the type of non filed inland marine insurance policy that would provide coverage for each of the following: - Smith Warehouse needs legal liability coverage for the property of others being stored with Smith

the computer service company would be covered by an electronic data processing equipment floater

identify the type of non filed inland marine insurance policy that would provide coverage for each of the following: - a computer services company owns several computers that it uses to develop software packages for local businesses

the construction company's owned mobile equipment at a construction site would be covered by a contractors equipment floater

identify the type of non filed inland marine insurance policy that would provide coverage for each of the following: - a construction company owns several pieces of mobile equipment that remain at a construction site until the construction project is completed

the manufacturing company regularly using its own trucks to deliver finished products to customers would be covered by an annual transit policy

identify the type of non filed inland marine insurance policy that would provide coverage for each of the following: - a manufacturing company regularly uses its own trucks to deliver finished products to customers

cargo insurance

insurance that covers loss of or damage to property shipped primarily by water or, if in foreign trade, by air

Inland marine insurance

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

hull insurance

insurance that covers physical damage to vessels, including their machinery and fuel but not their cargo typically include earthquake coverage for the possibility that a vessel might be damaged by earthquake while docked

protection and indemnity insurance (P&I)

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

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

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

motor truck cargo liability policy

policy that covers a trucker's liability for damage to cargo of others being transported by the trucker

difference in conditions (DIC) policy, or DIC insurance

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

nationwide marine definition

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

-to provide coverage for buying a difference in conditions policy -to provide excess limits over flood and earthquake coverages included in basic policies -to cover loss exposures not covered in basic policies, such as property in transit or loss of business income resulting from theft or transit losses -to cover property overseas locations

what are the reasons for buying a difference in conditions policy

-perils of the seas -fire, lightening, and earthquake -battery -all other like perils if the policy includes the additional perils clause, it also covers several other perils including electrical breakdown, bursting of boilers, breakage of shafts, latent defects, and negligence of the crew

what causes of loss are typically covered in a hull insurance policy

covers damage to the insured's stock of jewelry, precious and semiprecious stones, watches, precious metals, and similar merchandise, along with other stock used in a retail jeweler's business, including similar property of others in the insured's care, custody, or control

what coverage is provided by the filed jewelry block coverage form

rental reimbursement coverage, often added by endorsement to contractors equipment floaters, pays the cost of renting substitute equipment when covered property has been put out of service by a covered cause of loss

what is the purpose of the rental reimbursement coverage that is often added by endorsement to contractors equipment floaters

other than the building under construction, an inland marine builders risk policy typically covers temporary structures at the building site and building materials while on the insured location, in transit, or in storage at another location

what property does an inland marine builders risk policy typically cover other than the building under construction

face the possibility that their vessels could be damaged or destroyed by fire, war, breakage of machinery, the action of wind and waves, the striking of rocks or other vessels, and the shifting of cargo

what property loss exposures do vessel owners face that can be covered by hull insurance

-damage to bridges, piers, wharves, and other structures along waterways -injury to passengers, crew, and other persons on the insured vessel -injury to persons on other vessels -damage to cargo of others aboard the insured vessel

what types of claims may be covered by protection and indemnity insurance

covers the insured's office equipment and improvements and betterments that the insured has made to a leased building

what types of property, other than the insured's professional equipment, materials, supplies, and books, can be insured under the physicians and surgeons equipment coverage form

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

when rating hull and protection and indemnity insurance, what factors influence the judgment of underwriters

used by many businesses because commercial property forms severely limit coverage for signs

why do businesses need the coverage provided under the signs coverage form

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 a government postal service. The form covers the insured against loss of securities and other negotiable instruments while in transit by first-class mail, certified mail, express mail, or registered mail.