ACSR 9 - Marine Coverage, Commercial Excess and Umbrella Liability

True

(T/F) Umbrella liability policies may also cover some claims that are not covered by the underlying policy or policies.

True

(T/F) When cargo is shipped by a vessel, loss exposures exist for the owner of the cargo and also for the owner of the vessel. Both the cargo and the vessel are subject to loss from perils that include the action of wind and waves, striking rocks, collision with another vessel, fire, and breakage of machinery.

Self-Contained

A ____ policy applies to a loss that exceeds the underlying limits only if the loss is also covered under the terms of the excess liability policy.

Following-Form

A ____ policy covers a liability loss that exceeds the limits of an underlying policy only if the loss is covered by the underlying insurance.

Voyage

A ____ policy covers cargo for a single trip described in the policy. This type of policy is designed for infrequent shippers.

Layers (The various layers of insurance applicable to a particular set of liability loss exposures can be depicted with the primary layer on the bottom and subsequent layers stacked above.)

A primary liability policy and corresponding excess or umbrella liability policies are referred to as "____" of insurance.

Umbrella Liability

Although ordinary excess liability policies may apply in excess of only one underlying policy, a(n) ____ policy provides excess coverage over several primary policies, such as commercial general liability (CGL), auto liability, and employers liability.

Umbrella Liability

An ____ policy also takes the place of primary insurance when primary aggregate limits are reduced or exhausted (as does excess coverage), and it covers some claims that are not covered by any of the underlying policies (in contrast to excess coverage). These two functions are often called drop-down coverage.

Open cargo

An ____ policy covers all goods shipped or received by the insured during the term of the policy and is typically written without an expiration date. This type of policy is designed for frequent shippers. The policy covers all shipments that the insured is required to insure under the terms of any sales contracts.

Self-Contained Policy

An excess policy provides no coverage for bodily injury resulting from products-completed operations. The underlying policy includes such coverage. The excess liability policy will not pay for a products liability claim resulting from completed operations, even though the claim exceeds the each occurrence limit of the underlying policy.

Following-Form Policy

An insured has an underlying liability policy with an each occurrence limit of $1 million and a following-form excess liability policy with an each occurrence limit of $1 million. If a claimant obtains a judgment of $1.25 million against the insured for bodily injury covered by the underlying policy, the underlying policy will pay the each occurrence limit of $1 million, and the excess liability policy will pay the remaining $250,000.

B. Effect of aggregate limits

An insured that experiences multiple, small liability losses may require excess or umbrella liability insurance for which one of the following reasons? A. Difficulty estimating the maximum possible loss B. Effect of aggregate limits C. Inadequate occurrence limits D. Need for broader coverage

B. A loss is covered by the umbrella policy but is excluded under the primary policy

An insured that purchases an umbrella liability policy would be subject to a predetermined amount of self-insured retention (SIR) in which one of the following situations? A. A loss is covered by both the primary and umbrella policies but the primary policy's aggregate limits have been exhausted B. A loss is covered by the umbrella policy but is excluded under the primary policy C. A loss is covered by both the primary and umbrella policies but exceeds the primary policy's occurrence limit D. A loss that is covered by the umbrella policies that occurs at a time when the underlying limits have failed to be maintained

B. $4,000,000

Antonia has an insurance layering program with a commercial general liability policy with a $1 million each occurrence limit and a general aggregate limit of $4 million. If Antonia suffers eight individual losses of $750,000, how much will her primary insurer pay? A. $1,000,000 B. $4,000,000 C. $6,000,000 D. $8,000,000

B. A $500,000 loss excluded by BPI's auto policy but not excluded by the umbrella policy

Building Products Industries (BPI) has $500,000 in commercial auto coverage and a commercial umbrella liability policy that provides $1,000,000 and has an SIR of $10,000. Assuming the auto policies' aggregate limits have not been depleted by other claims, which one of the following losses would be fully or partially paid under BPI's umbrella policy? A. A $300,000 damage award for liability for an auto accident caused by one of BPI's employees B. A $500,000 loss excluded by BPI's auto policy but not excluded by the umbrella policy C. A $9,000 loss excluded by BPI's auto policy but not excluded by the umbrella policy D. A $400,000 loss excluded by BPI's umbrella policy but not excluded by the auto policy

D. The compensation the carrier receives for transporting the cargo.

Cargo insurance provides coverage for loss of freight, which is A. The potential losses arising from bodily injury to the freight crew. B. The replacement cost of the freightliner or other watercraft. C. The actual cash value (ACV) of the cargo being transported. D. The compensation the carrier receives for transporting the cargo.

Instrumentalities of transportation or communication

Examples are property used in transportation, such as bridges, tunnels, towers, and pipelines; and property used in communication, such as television towers and transmission equipment.

C. $1,400,000

Fatima has a layered insurance program with a commercial general liability (CGL) policy as a primary coverage. Her CGL aggregate limit is $1 million and the each occurrence limit is $500,000. Her second layer, an excess liability policy has an aggregate limit of $2 million and an each occurrence limit of $1 million. If Fatima suffers three individual losses of $800,000, how much will her excess insurer pay? A. $900,000 B. $1,000,000 C. $1,400,000 D. $1,500,000

C. Each item subject to loss must be examined separately to determine the causes of loss that are insurable.

For inland marine loss exposures, A. Property in the custody of a bailee presents specific exposures similar to property exposures more than liability because the bailee may owe the principal for a loss. B. They are assigned to one of three broad categories: common, contract, or private carriers. C. Each item subject to loss must be examined separately to determine the causes of loss that are insurable. D. Economic or financial effects of a loss of use of property, such as the cost to rent substitute equipment, is not covered.

C. Damage to or loss of an insured vessel.

Hull insurance is a common type of marine insurance that is used to provide coverage for A. Legal liability for damage or loss of cargo. B. Damage to property being shipped in a vessel. C. Damage to or loss of an insured vessel. D. Legal liability for bodily injury to crew members or passengers of vessels.

D. Owners of commercial watercrafts

Hull insurance is a common type of marine insurance that protects which one of the following from losses? A. Owners of goods being transported in a commercial watercraft B. Recipients of cargo being shipped in a commercial watercraft C. Crew members and passengers of commercial watercrafts D. Owners of commercial watercrafts

D. Personal effects of a vessel's crew and passengers

Hull insurance is one of the most common types of marine insurance. Which one of the following is usually excluded from coverage under hull policies? A. Damage to or loss of a vessel's structure B. A vessel's equipment and machinery C. Fuel supplies used for a vessel D. Personal effects of a vessel's crew and passengers

C. Drop-down to provide first dollar coverage as if it were the primary policy.

If a liability loss is covered by both a primary liability policy and an umbrella liability policy, but the primary policy's aggregate limits have been exhausted, then the umbrella policy will A. Only provide coverage if the loss exceeds the primary policy's occurrence limit. B. Provide coverage after a predetermined amount of self-insured retention is met. C. Drop-down to provide first dollar coverage as if it were the primary policy. D. Not provide any coverage.

B. Begin after a predetermined amount of self-insured retention.

If a liability loss is not covered by an underlying primary liability policy, but covered by an umbrella policy, then the umbrella coverage will A. Act as if it were the primary policy and provide first dollar coverage. B. Begin after a predetermined amount of self-insured retention. C. Act as if the underlying limits are still in place. D. Array

C. Difference in conditions insurance

If an insured is looking to purchase an insurance policy that will fill gaps left by commercial property insurance, which one of the following nonfiled inland marine coverages would be most appropriate? A. Installation floater B. Transit insurance C. Difference in conditions insurance D. Bailee policy

A. The total available insurance would be reduced by payments on other claims covered by the umbrella policy.

If an umbrella policy contains an aggregate limit, A. The total available insurance would be reduced by payments on other claims covered by the umbrella policy. B. The limits for all the coverages in the policy are totaled and made available for any claim. C. Any self-insured retention in the policy does not apply. D. The aggregate automatically applies to any defense costs related to a claim.

C. Collapse during construction.

In addition to direct physical loss, many inland marine builders risk floaters cover losses that are excluded under Insurance Services Office (ISO) builders risk coverage, such as A. Broken glass. B. Fire. C. Collapse during construction. D. Mechanical breakdown.

D. Are airlines, railroads, or trucking companies that furnish transportation to any member of the public seeking their services.

Inland marine domestic shipments exposures are classified as common, contract, or private. Common carriers A. Act as bailors to those who utilize their services. B. Haul their own goods. C. Do not serve the general public but furnish transportation for shippers with which they have contracts. D. Are airlines, railroads, or trucking companies that furnish transportation to any member of the public seeking their services.

A. Nonfiled status of many inland marine classes.

Inland marine insurance developed to address broad and varying loss exposures that may not be adequately covered by commercial property policies. Inland marine insurance has the flexibility to provide this coverage due to its "all-risks" coverage and A. Nonfiled status of many inland marine classes. B. High coverage limits. C. Use of filed inland marine classes. D. Small deductibles.

A. To provide flexibility in developing coverage and rating plans for specific business needs.

Inland marine insurance has developed A. To provide flexibility in developing coverage and rating plans for specific business needs. B. To address exposures that may not be adequately covered by ocean marine policies. C. Because the exposures for property in transit are the same as property at a fixed location. D. Because the Nationwide Marine Definition that restricts covered loss exposures in marine insurance was introduced.

D. Address exposures that may not be adequately covered by commercial property policies.

Inland marine insurance was developed primarily to A. Meet state governments' requirements regarding the use of appropriate rates and forms for commercial property insurance. B. Provide "all-risks" coverage for commercial goods shipped on water. C. Provide excess insurance to extend the limits and coverage of underlying commercial property policies. D. Address exposures that may not be adequately covered by commercial property policies.

Nonfiled; Filed

Inland marine insurers use ____ coverages to meet the needs of insureds with special coverage needs. ____ coverage forms are used to provide more standardized coverages.

C. Property in the possession of bailees

Inland marine loss exposures fall into three broad categories. Which one of the following is an example of a commercial property floater exposure? A. Property being transported by a common shipping company B. Transmission equipment used in communication C. Property in the possession of bailees D. Property being transported by a contract carrier

B. A bridge that is used in transportation

Inland marine loss exposures fall into three broad categories. Which one of the following is an example of an instrumentalities of transportation and communication loss exposure? A. Property being transported by a public airline B. A bridge that is used in transportation C. Property being transported by a contract carrier D. Property in the temporary possession of a third party

B. Judgment rating.

Inland marine underwriters might have difficulty rating property to be insured under a nonfiled policy because the coverage terms might be very specialized or the property very unusual. So, these underwriters use A. Experience rating. B. Judgment rating. C. Manual rating. D. Class rating.

Underlying insurance

Insurance that applies below an excess or umbrella liability policy.

Cargo insurance

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

Filed

Insurers also use ____ coverage forms to provide more standardized coverages to those insureds with similar loss exposures.

B. Awards to injured persons may reach large totals.

It is difficult to estimate maximum possible loss (MPL) for liability loss exposures because A. Policies may be occurrence based and have losses open for years. B. Awards to injured persons may reach large totals. C. Insurers may go into liquidation. D. Policy exclusions may not be enforceable.

A. Open cargo policy

KO Clothing Company is based in the United States and designs, manufactures, and sells clothing. Recently, KO has started to become very popular in international markets. As a result, KO has begun making several shipments to Europe per month via commercial watercraft. Which one of the following marine policies would be most appropriate for KO? A. Open cargo policy B. Voyage policy C. Hull policy D. Protection and indemnity policy

A. An open cargo policy

Keithly Shipping Co. ships goods regularly on various inland waterways in the United States and is looking for a policy that will provide coverage for loss of cargo. Which one of the following should Keithly purchase? A. An open cargo policy B. A voyage policy C. Hull insurance D. Protection and Indemnity (P&I) insurance

C. The need to obtain insurance limits greater than the maximum limits that primary insurers offer

Many insureds will purchase excess or umbrella liability insurance in order to provide additional layers of liability coverage. Which one of the following problems does layering liability insurance most directly solve? A. The difficulty in estimating the maximum possible loss for liability coverage B. The deterioration of aggregate limits caused by multiple losses in a policy period C. The need to obtain insurance limits greater than the maximum limits that primary insurers offer D. The need for broader coverage to fill gaps left by the primary policy

D. Difficulty in estimating the maximum possible loss

Many liability lawsuits result in multi-million dollar settlements. Because of this, excess and umbrella liability insurance can be used to solve which one of the following problems? A. Need for broader liability coverage to eliminate coverage gaps B. Deterioration of aggregate limits from multiple occurrences C. Primary insurers' unwillingness to provide desired coverage limits D. Difficulty in estimating the maximum possible loss

Filed

Most ____ inland marine forms cover risks of direct physical loss to the covered property. Valuation is typically on an actual cash value basis; however, the insurer and the insured may agree to modify a policy to substitute another valuation method.

D. Small number of potential insureds and diverse loss exposures.

Nonfiled inland marine coverages comprise the majority of inland marine policies and are typically characterized by a relatively A. Large number of potential insureds and diverse loss exposures. B. Large number of potential insureds and homogeneous loss exposures. C. Small number of potential insureds and homogeneous loss exposures. D. Small number of potential insureds and diverse loss exposures.

Marine

Organizations involved in the ownership, maintenance, or operation of commercial watercraft face a variety of liability and property loss exposures, referred to collectively as ____ loss exposures.

Hulls

Owners of commercial watercraft face the possibility of loss of or damage to their vessels, called "____" by the same perils that can damage or destroy the cargo they transport.

Open cargo policy

Policy that covers all goods shipped or received by the insured during the policy's term; comparable to an inland marine annual trip transit policy, but without a set policy expiration date.

B. Hull insurance

Pravalt Industries is making a shipment to an overseas client and wants protection for its vessel. Which one of the following should Pravalt purchase? A. A voyage policy B. Hull insurance C. An open cargo policy D. Protection and Indemnity (P&I) insurance

B. Commercial property floater exposures

Property in the possession of bailees and property of jewelry, fur, and fine arts dealers are examples of which one of the following types of inland marine loss exposures? A. Domestic shipments exposures B. Commercial property floater exposures C. Instrumentalities of transportation or communication exposures D. Loss of use exposures

C. Voyage policy

Ryan owns a company that sells custom made furniture. Ryan's customers usually reside in the United States. However, he gets a special order from a customer in Europe that will require him to ship furniture overseas via a commercial watercraft. Which one of the following marine policies would be most appropriate for Ryan? A. Hull policy B. Open cargo policy C. Voyage policy D. Protection and indemnity policy

D. Can cover losses arising from accounts receivable.

Some types of loss exposures are covered by a filed inland marine policy, which A. Provides coverages that are characterized by a small number of potential insureds and by reasonably homogenous loss exposures. B. Is a coverage part included in a commercial package policy (CPP) and is not able to be issued as a monoline policy. C. Valuation is typically on a replacement cost basis. D. Can cover losses arising from accounts receivable.

Underlying Limit

The ____ is usually defined as either the limit of the applicable coverage listed in the umbrella liability policy's schedule of underlying insurance or, if the underlying insurance does not apply, the SIR shown in the umbrella liability policy declarations.

Nonfiled

The ability to use ____ coverages gives inland marine insurers the flexibility to design insurance coverage for smaller numbers of insureds with varied needs or loss exposures.

Filed inland marine

The classes of inland marine business for which forms and/or rates must be filed with the state insurance department.

Nonfiled inland marine

The classes of inland marine business for which neither policy forms nor rates must be filed with the state insurance department.

Cargo, Hull & Protection and Indemnity (P&I) Insurance

The most common types of marine insurance are:

C. Effect of aggregate limits.

The need for excess or umbrella liability insurance is closely related to three basic issues involved in the use of liability insurance: difficulty in estimating maximum possible loss, layering of liability coverages, and the A. Need for greater occurrence limits. B. Need for customized coverage. C. Effect of aggregate limits. D. Effect of coverage gaps.

D. Layering liability coverage.

The need for excess or umbrella liability insurance is closely related to three basic issues involved in the use of liability insurance: difficulty in estimating maximum possible loss, the effect of aggregate limits and A. Ability to self-insure. B. Statutory requirements. C. Elimination of coverage gaps. D. Layering liability coverage.

D. Losses can be retained through the insureds own funds.

The primary layer in an insurance program is not always financed through insurance, rather A. A surety bond can be purchased instead. B. A third-party might finance the insured's losses up to a certain limit. C. State programs are made available to insureds as primary coverage. D. Losses can be retained through the insureds own funds.

A. Nonfiled coverages gives inland marine insurers the flexibility to design insurance coverage for smaller numbers of insureds with varied loss exposures.

There are specific advantages to insurers for each filed and nonfiled inland marine policies. For example, the ability to use A. Nonfiled coverages gives inland marine insurers the flexibility to design insurance coverage for smaller numbers of insureds with varied loss exposures. B. Nonfiled coverages gives inland marine insurers the ability to provide standardized coverages to those insureds with similar loss exposures. C. Filed coverages gives inland marine insurers the flexibility to develop policy provisions and to set rates for individual risks. D. Filed coverages gives inland marine insurers the ability to design policies for almost any kind of property.

A. Large number of potential insureds and reasonably homogeneous loss exposures.

There are two classes of inland marine insurance, filed and nonfiled. Filed coverages are typically characterized by a A. Large number of potential insureds and reasonably homogeneous loss exposures. B. Large number of potential insureds and relatively diverse loss exposures. C. Small number of potential insureds and reasonably homogeneous loss exposures. D. Small number of potential insureds and relatively diverse loss exposures.

Commercial property floater exposures

These exposures include property in the possession of bailees (those who hold goods in trust for others for a specific purpose) and property of dealers in such goods as jewelry, fur, fine arts, coins and stamps, cameras, musical instruments, and mobile equipment.

All-Risks

To address these broad and varying exposures, inland marine policies, like ocean marine policies, offer "____" coverage; they cover any risk of direct physical loss unless the risk is specifically excluded.

Nationwide Marine Definition

To resolve the resulting disputes, insurance regulators in 1933 introduced the ____, which restricted marine insurers to covering loss exposures listed in the definition.

C. Excess coverage over several primary policies.

Umbrella liability insurance differs from ordinary excess liability insurance by providing A. Primary coverage for claims covered by a primary policy when aggregate limits are exhausted. B. Excess coverage for claims covered by a primary policy when each occurence limits are exhausted. C. Excess coverage over several primary policies. D. Primary coverage for claims that are covered by the primary policy.

Occurence (However, the underlying primary policies sometimes include both occurrence and claims-made coverages (such as a claims-made CGL policy and an occurrence-basis auto liability policy). In addition, some insurers provide only claims-made umbrellas even when the primary coverage is written on an occurrence basis.)

Umbrella liability policies are usually (occurrence/claims made) forms.

A. An umbrella liability policy may cover some claims that are not covered by the underlying policy or policies.

What is the difference, if any, between umbrella liability and excess liability policies? A. An umbrella liability policy may cover some claims that are not covered by the underlying policy or policies. B. An excess liability policy may cover some claims that exceed the each occurrence limit of the underlying policy or policies. C. An umbrella liability policy may cover some claims that exceed the general aggregate limit of the underlying policy or policies. D. There is no difference between umbrella and excess liability policies, they both provide coverage in excess of primary insurance limits.

B. Agreed value basis.

When dealing with property that is hard to value, such as works of art or irreplaceable documents, a nonfiled inland marine coverage form has the advantage of being able to cover the property on a(n) A. Actual cash value basis. B. Agreed value basis. C. Replacement cost basis. D. Standard value basis.

A. Cargo B. Hull

Which of the following represent the type of loss exposures presented by a hurricane while a ship carrying cargo is crossing an ocean? Select all that apply. A. Cargo B. Hull C. Legal liability for damage

A. Property in the custody of a bailee

Which one of the following inland marine loss exposures most closely resembles a liability exposure? A. Property in the custody of a bailee B. Loss of use of property C. Domestic shipments D. Instrumentalities of communication and transportation

A. Additional insurance policies provide coverage once the limits on the underlying policies are exhausted.

Which one of the following is an example of "layering" liability coverage? A. Additional insurance policies provide coverage once the limits on the underlying policies are exhausted. B. Insurers proportionately share a liability loss based on the occurrence limits of each individual policy. C. Multiple custom, manuscript policies are combined to ensure that no coverage gaps exist. D. Multiple policies are purchased in advance so that an insured maintains coverage once a policy expires.

B. Various types of property owned by individuals, such as jewelry, furs, musical instruments, silverware, coin collections, and stamp collections

Which one of the following is listed on the Nationwide Marine Definition for available coverage under an inland marine policy? A. Various types of property pertaining to a governmental entity at the federal, state, or local level B. Various types of property owned by individuals, such as jewelry, furs, musical instruments, silverware, coin collections, and stamp collections C. International shipments D. Instrumentalities of administration and compensation

A. The policy provides coverage only if the loss is also covered by the underlying policy.

Which one of the following is true regarding a following-form excess policy? Choose one answer. A. The policy provides coverage only if the loss is also covered by the underlying policy. B. The policy provides coverage as long as the loss is covered under the terms of the excess policy. C. The policy proportionately covers losses with the underlying policy based on each policy's individual occurrence limits. D. The policy equally covers any losses with the underlying policy.

A. Property is typically covered on an actual cash value basis.

Which one of the following is true regarding filed inland marine coverages? A. Property is typically covered on an actual cash value basis. B. Insurers typically develop their own unique coverage forms. C. Neither policy forms nor rates need to be filed with state insurance departments. D. Filed inland marine coverages are characterized by a small number of potential insureds and diverse loss exposures.

B. Nonfiled coverages comprise the majority of inland marine policies.

Which one of the following is true regarding nonfiled inland marine coverages? A. Insurers typically use forms developed by ISO or other advisory organizations. B. Nonfiled coverages comprise the majority of inland marine policies. C. Nonfiled coverages are characterized by a large number of potential insureds and homogeneous loss exposures. D. Insurers are required to file policy forms andhen dealing with property that is hard to value, such as works of art or irreplaceable docume rates with state insurance departments.

B. Many inland marine policies are exempt from state rate and filing regulations.

Which one of the following statements is true regarding inland marine insurance? A. Inland marine insurance was developed specifically to cover exposures to property shipped on inland waterways. B. Many inland marine policies are exempt from state rate and filing regulations. C. The Nationwide Marine Definition is a federal law that applies to interstate shipping of property insured under inland marine insurance. D. All property covered by inland marine insurance is valued at replacement cost.

D. An umbrella policy's maintenance of underlying insurance condition requires the insured to maintain all required underlying coverages during the policy period.

Which one of the following statements regarding umbrella liability insurance is true? A. If underlying insurance does not apply, the underlying limit is defined as the limit of coverage listed in the umbrella liability policy, which is declarations. B. Umbrella policies are typically written on claims-made coverage forms, which can create coverage gaps. C. An underlying policy's exclusions are often narrower than those in the umbrella liability policy. D. An umbrella policy's maintenance of underlying insurance condition requires the insured to maintain all required underlying coverages during the policy period.

B. Many nonfiled coverages resemble coverages available under other commercial property policies but offer additional coverages.

Which one of the following statements relating to nonfiled inland marine coverages is true? A. Nonfiled coverages comprise the minority of inland marine policies. B. Many nonfiled coverages resemble coverages available under other commercial property policies but offer additional coverages. C. Standard forms are available for all nonfiled coverages. D. Nonfiled coverages are characterized by a large number of potential insureds with similar loss exposures.

B. Protection and indemnity insurance

Which one of the following types of marine insurance provides owners of commercial watercrafts coverage for legal liability for bodily injury to crew members, passengers, and other persons and damage to cargo or other property? A. Cargo insurance B. Protection and indemnity insurance C. Hull insurance D. Voyage insurance

B. Open cargo policy

Which one of the following would best provide coverage for frequent shippers' loss exposures related to cargo? A. Voyage policy B. Open cargo policy C. Hull policy D. CGL

A. There are many different outcomes to a liability suit and it is impossible to estimate what the maximum possible loss will be.

Why does the estimation of maximum possible loss contribute to the need for excess or umbrella liability insurance? A. There are many different outcomes to a liability suit and it is impossible to estimate what the maximum possible loss will be. B. The insured and insurer often cannot agree on the maximum possible loss because of individual motives for profit or savings. C. Maximum possible loss cannot be insured by a primary liability policy and uses special provisions within an umbrella or excess policy. D. Liability losses are often much higher than property losses and should be insured using an excess or umbrella policy in addition to a primary policy.

C. Protection and Indemnity (P&I) insurance

Worthley & Co. makes regular shipments down the Mississippi River to several factories along the way and wants to insure against any liability arising out of injuries to crew members. Which one of the following would provide the coverage Worthley is searching for? A. An open cargo policy B. Hull insurance C. Protection and Indemnity (P&I) insurance D. A voyage policy

Filed

____ coverages are characterized by a large number of potential insureds and by reasonably homogeneous loss exposures; therefore, use of standard forms is feasible.

Nonfiled

____ coverages, which comprise the majority of inland marine policies, are characterized by a relatively small number of potential insureds, diverse loss exposures, or both. These policies can be designed to apply to almost any kind of property.

Gaps

____ in coverage can occur when the umbrella liability or excess liability policy has a different coverage trigger from that of the underlying policy. To avoid this problem, some insurers provide both occurrence and claims-made triggers in their umbrella liability policies.

Excess Liability & Umbrella Liability

____ insurance are similar types of coverage that organizations buy for a variety of reasons, including the need to increase the limits of their commercial general liability, commercial auto, employers liability, and other primary liability policies.

Hull

____ insurance covers damage to or loss of an insured vessel's structure. Coverage is also provided for machinery, equipment, boilers, and fuel supplies. Cargo and the personal effects of passengers and crew are usually excluded from coverage under these policies.

Inland Marine

____ insurance developed to address exposures that may not be adequately covered by commercial property policies. It covers a wide range of usually land-based risks related to transportation or communication, including property in transit, and other property subject to unique circumstances.

Excess Liability

____ insurance may take any one of three forms. A following-form policy covers a liability loss that exceeds the limits of an underlying policy only if the loss is covered by the underlying insurance. A self-contained policy applies to a loss that exceeds the underlying limits only if the loss is also covered under the terms of the excess liability policy. A combination of the following-form and self-contained policies incorporates the provisions of the underlying policy and adds conditions or exclusions in the excess liability policy.

Excess Liability & Umbrella Liability

____ insurance policies are available to protect a business's assets from catastrophic losses.

Umbrella Liability

____ insurance provides broader coverage than ordinary excess liability insurance. Like ordinary excess insurance, this insurance provides additional limits above the each occurrence limits of the insured's primary policies.

Ultimate Net Loss

____ is typically defined as the total amount that the insured is legally obligated to pay as damages for a covered claim. It may or may not include defense costs related to the claim.

Inland Marine

____ policies also cover the economic or financial effects of loss of use of the property. For example, damage to a contractor's mobile equipment may necessitate the temporary rental of substitute equipment, and loss of use of a computer can cause extra expenses. Damage to the merchandise of a jeweler or an equipment dealer can also interrupt business.

Excess Liability & Umbrella Liability

____ policies cover damages that exceed limits of an underlying policy or when the aggregate limit of an underlying policy has become depleted by prior claims.

Cargo insurance

____ policies cover property being moved in foreign trade across oceans, but they also are used to insure cargo being transported within a single country on inland waterways. Owners face the possibility of loss to the cargo while it is in the course of transit, either aboard the vessel or on land between the vessel and the cargo's point of origin or destination.

Umbrella Liability

____ policies may provide excess coverage for more than one underlying policy and may also cover some claims that are not covered by underlying policies.

Excess Liability & Umbrella Liability

____ policies respond when the amount of damages is higher than the each occurrence limit of an underlying policy or when the aggregate limit of an underlying policy has become depleted by prior claims.

Inland Marine

_____ insurance covers a wide range of usually land-based risks that have some link to transportation or communication and originated in the early twentieth century in response to needs of the developing trucking industry for broad coverage of property in transit.

Protection and Indemnity (P&I) Insurance

_____ insurance provides coverage for owners of commercial watercraft against various liability claims resulting from operating the insured vessel, and it may be issued as part of a marine package insurance policy that includes hull insurance. Because most of these policies exclude liability for pollution, separate policies provide coverage for pollution for owners and operators of vessels such as oil tankers.