Unit 12 - Marine

12.2c Commercial Inland Marine Policies:

Annual Transit Policy - This policy is an uncontrolled form that protects the shipper or receiver of goods against loss to goods in transit. Coverage is available on either a named perils basis (fire, windstorm, collision and theft) or on an "all risk" basis. The policy covers all of the insured's incoming or outgoing shipments during the year. Trip Transit Policy - This policy is also an uncontrolled form similar to the annual transit policy. This form is issued to insure single shipments of goods for companies who have only occasional shipments during the year. Coverage extends from the time and point of origin to the time and point of destination. Motor Truck Cargo Policy - This uncontrolled form protects the carrier, instead of the shipper, for loss to domestic shipments in transit. A common carrier is not liable for acts of God (flood, tornado, windstorm, etc.). Motor truck cargo insurance provides protection for other perils, which may damage cargo belonging to others for which the carrier is liable.

Who may be covered under a "bailees form"? C____, d____ and l____; f____ and w____ owners.

Cleaners, dyers, laundries, furriers, warehouse

12.2e Commercial Inland Marine Policies:

Commercial Property Floater Risks - Bailees - A bailment is the delivery of property by the owner to someone else to be held by the latter for some special purpose, and then returned to the owner. An example of a bailment would be leaving your clothing at a dry cleaners to have them cleaned and pressed. The bailee is the one who receives the property; the one who owns the property is called the bailor. Just as carriers have a responsibility for the safety of property in their custody, bailees also have a responsibility for property in their custody. If the property is damaged through the bailee's own fault, the bailee will be liable to the customer for damage. But even when property is damaged in a fire or some other disaster which is not the bailee's fault, the customer will expect to get the property back unharmed or be compensated for the loss. In order to retain the goodwill of the customer, the bailee will want to reimburse the customer. All of the previous liability policies we have discussed exclude coverage for property in the insured's care, custody or control. A bailee, however, may purchase a bailees customer's policy, which reimburses the insured for damage to customer's property in his or her care, whether or not the insured is liable for the damage, provided damage resulted from a perils insured against. Cleaners, Dyers and Laundries - A unique peril covered by this form is "confusion of goods," which covers the loss that can occur when the resulting damage from a loss makes it impossible to identify the garment with the correct customer. Furrier's Policy - This form provides coverage to fur storage facilities. Warehouseman's Policy - This form protects an owner of the warehouse for damages to customer's property in the custody of the warehouse owner.

12.2f Commercial Inland Marine Policies:

Commercial Property Floater Risks - Equipment Floaters - The commercial property floaters risks category also includes various types of equipment floaters: Contractor's Equipment Floater - This form is uncontrolled and covers the heavy machinery, equipment and tools a contractor needs to conduct business. Contractor's equipment needs to be protected while on the job site, on the way to and from a job site, and while equipment is temporarily stored. Coverage is provided on a named perils or "all risk " basis. Tools, machinery and equipment owned, rented or borrowed by the insured can be covered. Physicians and Surgeon's Equipment - This form is "all risk" and designed for insuring the medical profession. It covers medical, surgical and dental instruments on and off the premises as well as furniture and fixtures at the doctor's office. An alternative form covers these items only while carried by the injured. Theatrical Property - This form provides "all risk "coverage for scenery, props and costumes used by a theater group in a specific production or for all productions. Rental companies, supply houses, circuses, carnivals and rodeos may not be covered under this form. Film Coverage - This form provides "all risk" coverage for exposed motion picture film including soundtracks and properly recorded tapes until production is complete and positive prints are made. Both reporting and non-reporting forms are available. Commercial Articles Coverage - This form provides coverage for photography equipment or musical instruments used commercially. It is an "all risk" form and may be issued with items specifically scheduled, or for a single blanket amount, or a combination of both. Commercial Property Floater Risks - Business Floaters - These forms provide coverage for property frequently excluded on the commercial property form: Accounts Receivable Coverage - This form reimburses the insured for amounts, which cannot be collected from customers due to damage to be insured's accounts receivable records. The form also covers extra collection expenses, cost to re-establish records and interest on any loans the insured must obtain to stay in business while collections are impaired. Coverage is written on an "all risk" basis. Coverage can be written on either a reporting form (the insured makes periodic reports of receivables and is charged a premium based on the average receivable) or a non-reporting form (which is subject to a fixed amount). Valuable Papers Coverage - This form reimburses the insured for the cost of replacing damage manuscripts, films, maps, drawings, deeds, books, or other printed, inscribed or written documents other than money or securities. Coverage can include research as well as actual production costs. Coverage is written on an "all risk" basis. Coverage may be issued on either a scheduled or blanket basis; property that is specifically scheduled is covered on a "valued" basis. Installation Coverage - This form covers loss of machinery, equipment, building materials or supplies in transit to or being used with or during the course of installation, testing, building, renovating or repairing. It can be issued to cover the interest of the owner, the seller or the contractor. Installment Sales Floater - This form covers property sold on an installment basis. If written for the seller's interest only, the form pays off the unpaid balances following loss. If written for both a buyer and seller, the full value of the insured items is paid. Signs - This form provides "all risk" coverage for florescent, automatic or mechanical electric signs. Each sign must be scheduled for a specific limit. Electrical Data Processing Insurance (EDP) - This form provides a package of coverages including: (1) Property coverage for equipment ("hardware"), data and media (recorded information and the software on which it is recorded). Coverage is also provided for extra expense to cover abnormal expenses of operating following covered damage, and business interruption to cover losses resulting from having to shut down operations because of covered damage; (2) Liability insurance, which covers the insured's liability arising from handling and storing data for other firms (data processing service firms). Floor Plan - This form provides "all risk" coverage for merchandise held for sale that has been financed. It may also be issued to cover only the interest of the lender, the interest of the dealer or both. It is only available on a reporting basis based on monthly values of outstanding merchandise held for sale. Commercial Property Floater Risks - Dealers Policies - These policies represent an exception to the general rule of "mobile property." Although dealers do need occasional coverage for property away from the premises, their primary coverage need is for damage to merchandise while on the premises. There are numerous inland marine floaters written for specific types of dealers including: jewelers, furriers, art, coin and stamp, camera, musical instruments and equipment. The policies cover merchandise against "all risks" of loss, both on and off the premises, while in transit, and in the custody of employees. This form covers property of others in the insured's custody. Coverage may be either reporting for non-reporting. The inland marine policies, which cover jewelry dealers and furriers, are known as "block" policies. The term block policy comes from a French phrase "en bloc." which means "all together."

12.2a Commercial Inland Marine Policies:

Controlled Forms - Commercial Inland Marine insurance does not have one standard policy; each type of property requires a unique policy form. Certain controlled classes of inland marine coverage can be written under the commercial inland marine coverage part of the commercial package policy. When written and a part of the CPP, the commercial inland marine coverage part requires three forms in addition to the common policy conditions: (1) A commercial inland marine declarations form (when inland marine coverage is issued on a mono-line basis the declarations page may be combined with the common policy declarations to form a single declarations); (2) Commercial inland marine general conditions form; (3) One or more of the following controlled coverage forms. The following controlled coverage forms provide "all risk" coverage typical of inland marine coverage: (1) Accounts receivable; (2) Camera and musical instrument dealers; (3) Commercial articles; (4) Equipment dealers; (5) Film; (6) Floor plan; (7) Jewelers block; (8) Mail coverage; (9) Physicians and surgeons equipment; (10) Signs; (11) Theatrical property; and (12) Valuable papers and records. Uncontrolled Form - There is almost any endless variety of uncontrolled inland marine forms. Some of the more widely used forms included: (1) Annual transit; (2) Trip transit; (3) Motor truck cargo; (4) Instrumentalities of transportation or communication (i.e. bridges, tunnels, dams, piers and docks, and radio/TV towers); (5) Bailees customers (i.e. cleaners, dyers and laundries, furriers, warehousemen); (6) Furriers customers; (7) Contractor's equipment; (8) Installation; (9) Installment sales; (10) Electrical data processing equipment; and (11) Dealers (i.e. furriers block, art, coin and stamp).

12.4b Ocean Marine Insurance:

Freight Coverage: Freight coverage provides protection for the vessel's owner in the event that freight charges are not paid. The total loss of the ship may involve the loss of the freight, which was to be earned on cargo. The owner does not earn freight until delivery of the cargo is made. Therefore, should the ship sink or the cargo otherwise become lost, the freight is also lost. Freight insurance is usually made a part of the hull coverage rather than being written as a separate contract. Liability Coverage: There is also the risk that the ship will collide with another vessel. Rather than to write a separate liability policy, a collision or "running-down" clause is made a part of the hull coverage. The running-down clause is intended to provide protection should the ship's owner be held liable for the negligent operation of the vessel in damaging another ship. Should both vessels in a collision be found to be responsible, the liability of each vessel is fixed in proportion to the degree in which each vessel is at fault. Ship owners have other liabilities such as injuries to passengers, crewmembers or persons on other ships, and for damage to cargo, docks or other property. Protection against these types of liabilities is provided by a coverage known as protection and indemnity insurance. Ocean Marine Perils: "Perils of the Seas" - These perils include wind, waves, collision, stranding, sinking, and other such accidents. Losses caused by perils such as fire are called perils "on" the seas, not "of" the seas. War - The ocean marine insurance policy does not include loss from war. To include war, an endorsement referred to as "free of capture and seizure clause" may be attached, or a separate policy may be written. Fire - Fire is named as a separate peril under an ocean marine insurance policy. Both direct and consequential losses as a result of fire are covered including damage done by water and other materials used to extinguish a fire. Enemies - This peril includes all types of taking of the insured's property by force. Some policies exclude pilferage, as such losses are often the result of the shipper's negligence through improper packing. Jettison - Jettison is the voluntary throwing overboard of parts of the ship or cargo in order to save the vessel from sinking or from further damage. Barratry - Barratry means fraud by the master or the crew with intention of reaping gains at the expense of the owner (i.e. setting the ship on fire, diverting the ship from its course, or embezzlement of the cargo). "All Other Like Perils" - This clause actually includes perils of the same nature as otherwise covered in the policy; it does not imply that coverage is "all risk."

12.1b Inland Marine Insurance:

Imports and exports are the subject of ocean marine insurance; the personal property floater is provided by a personal inland marine policy. The remaining categories are eligible for commercial inland marine forms. A wide variety of seemingly unrelated risks fall into the category of commercial inland marine forms. Usually the common characteristic of risks eligible for inland marine risk is their portability although there are exceptions. As a general rule, inland marine forms do not cover stationery property. The distinction is not a sharp one and there is overlapping, but inland marine coverage generally covers property in transit, land mobile equipment (not licensed for road use), and "instrumentalities of transportation and communication" (i.e. bridges, tunnels, radio and TV towers, aerial navigation beacons, dams, piers and docks, pipelines and power transmission lines). Inland marine coverages can be categorized as "controlled" or "uncontrolled." A controlled line is one where a standard form (a form designed by the Insurance Services Office) is filed and used by insurers. An uncontrolled line is one wherein individual insurers use their own forms, which are designed for individual risk.

12.2d Commercial Inland Marine Policies:

Mail Coverage Form - This is a controlled form. It provides "all risk" coverage against loss to property sent by registered mail, first class mail, certified mail or express mail. Coverage is issued on a reporting form basis wherein the insured reports values and shipments with separate limits for first class and certified mail, U.S. postal express mail, and registered mail. A separate parcel post policy is available to cover parcel post mail. Instrumentalities of Transportation and Communication - Bridges, tunnels, oil pipelines, dams, piers, docks, radio and TV towers can be covered on this form. Coverage is for both direct damage and loss of revenue caused by damage.

12.4a Ocean Marine Insurance:

Ocean Marine insurance is also known as "wet marine" and has the basic function of covering perils associated with water transport. Ocean Marine insurance is the oldest form of insurance known to exist. There are no standard forms and much of the terminology seems quaint and obsolete. However, hundreds of years of usage have resulted in clarification of intent. Ocean Marine coverage has evolved into a clear and dependable coverage basis. To have a valid Ocean Marine insurance contract, the courts have required "utmost good faith." This is primarily because the underwriter is frequently not in a position to carefully investigate the risk. The 1906 Marine Insurance Act of England emphasizes this point: "A contract of Marine insurance is a contract based upon the utmost good faith and, if the utmost good faith is not observed by either party, the contract may be avoided by the other party. " Ocean Marine insurance is defined in Chapter 624.607 of the Florida Statutes as: "insurance against, or against legal liability of the insured for, loss damage or expense arising out of, or incident to, the ownership, operation, chartering, maintenance, use, repair, or construction of any vessel, craft, or instrumentality in use in the ocean or inland waterways, including liability of the insured for personal injury, illness, or death, or for loss of or damage to the property of another person." Ocean Marine coverages are broadly classified as hull, cargo, freight and liability. Hull Coverage: Hull policies cover for loss of or damage to the vessel for perils of fire, lightning, earthquake, assailing thieves, "perils of the seas," jettisons, barratry of the master or mariners and "all other like perils." The policy is usually written on an annual basis, and usually on a valued basis. Coverage is usually limited to a specific geographical area. Should be ship be laid up in port for an extended period of time, the typical contract will provide coverage for a reduced premium. Hull coverage is written with a deductible. Technically coverage will provide either an "average" or "franchise" form of deductible. Under an "average" deductible form, a stated flat deductible is made for the loss. Under the "franchise" deductible there is no payment until the loss reaches a certain limit; should the loss reach or exceed such limit, then the loss is paid in full. The franchise deductible may apply either as a percentage of the insured value or as a dollar amount. Cargo Coverage: Cargo insurance may be written on either one of two forms. A floating or open form covers goods of a certain class up to certain limits. Such contracts have no termination date, but either party may cancel with 30 days notice. Shipments, both incoming and outgoing, are automatically covered. The shipper reports to the insurer at regular intervals as to values shipped or received. The open cargo form is designed to accommodate shippers who are shipping goods throughout the year. The other form is a single risk form available to cover a particular shipment only.

12.4c Ocean Marine Insurance:

Other Ocean Marine Policy Clauses and Definitions General Average Clause - In ocean marine insurance, the term "average" means loss or damage. A general average clause refers to a loss which is a voluntary sacrifice of part of the ship or cargo, made by the master of the ship to avert a common peril which might well destroy the entire ship or cargo unless the voluntary sacrifice is made. Such a sacrifice or expense is borne proportionately by each party involved in the proportion that the value of its interest bears to the total value of all-interest engaged in the common venture. Free of Particular Average Clause - Particular average losses are partial losses which are accidental and do not require contribution from other parties. Under the particular average clause, the loss is to the particular party who has the damaged property. This clause provides that no particular average loss will be paid unless the loss is cause by certain perils such as stranding, burning, sinking or collision. Sue and Labor Clause - This clause requires the insured to take all steps necessary to save and preserve the ship or cargo from loss or to minimize a loss, which has occurred. If the insured fails, the insured loses their rights of recovery. The insured may incur reasonable expenses such as salvage fees, storage, etc. The insurer will reimburse these costs, even if the expenses sustained failed to save or recover the goods. Total Losses - The losses suffered from marine perils may result in either an "actual total loss" (property no longer exist or is beyond salvage) or a "constructive total loss" (the cost to salvage plus the costs to recondition the vessel exceed the value of the vessel). The insurer compensates a constructive total loss in the same way as an actual total loss. F.O.B. (Free On Board) - When cargo is shipped F.O.B., the buyer assumes responsibility for the cargo once goods reach the designated point. C.I.F. (Costs, Insurance and Freight) - When cargo is shipped C.I.F., the seller assumes complete responsibility for securing all necessary insurance. C.F. (Cost and Freight) - When cargo is shipped C.F., the buyer purchases his own insurance. F.A.S. (Free Along Side) - When cargo is shipped F.A.S., the seller assumes the costs and risk until delivery of the cargo alongside the vessel and within reach of its loading tackle. Demurrage - Demurrage is excluded by marine policies. Demurrage are damages which a charterer agrees to pay for delay in loading or unloading or for the time lost by a vessel prevented from pursuing profitable employment by perils of the sea or accidental causes.

12.3 Rating

Personal Inland Marine coverages are generally rated based on a rate per $100 of the insurance. Commercial Forms often utilize the rating applicable for commercial property as a base.

12.1a Inland Marine Insurance:

The Nationwide Definition developed by the insurance industry identifies the types of risk eligible for marine insurance. The Nationwide Definition lists the following six categories of eligible risk: (1) Imports. (2) Export. (3) Domestic Shipments. (4) Instrumentalities of Transportation or Communication. (5) Personal Property Floater Risks. (6) Commercial Property Floater Risks.

Name the six categories of risks in the Nationwide Definition of inland marine insurance? The six categories are: Imports; Exports; Domestic Shipments; Instrumentalities of Transportation or Communication; Personal Property Floater Risks; and Commercial Property Floater Risks. The six categories are: Imports; Exports; Domestic Shipments; Personal Property Floater Risks; and Commercial Property Floater Risks. The six categories are: Imports; Instrumentalities of Transportation or Communication; Personal Property Floater Risks; and Commercial Property Floater Risks. The six categories are: Imports; Exports; Domestic Shipments; Instrumentalities of Transportation or Communication; Personal Property Floater Risks; and Commercial Property Floater Risks. The six categories are: Imports; Exports; Domestic Shipments; Instrumentalities of Transportation or Communication; and Commercial Property Floater Risks.

The six categories are: Imports; Exports; Domestic Shipments; Instrumentalities of Transportation or Communication; Personal Property Floater Risks; and Commercial Property Floater Risks.

Describe accounts receivable coverage. True or False: This form reimburses the insured for amounts, which cannot be collected from customers due to damage to be insured's accounts receivable records. The form also covers extra collection expenses, cost to re-establish records and interest on any loans the insured must obtain to stay in business while collections are impaired. Coverage is written on an "all risk" basis. Coverage can be written on either a reporting form (the insured makes periodic reports of receivables and is charged a premium based on the average receivable) or a non-reporting form (which is subject to a fixed amount).

True

Describe domestic shipments in a commercial marine insurance policy? True or False: A wide variety of inland marine transportation forms are designed to provide coverage for domestic shipments, whether they travel by truck, train, air or even mail. Businesses that ship or receive merchandise need coverage against loss to their cargoes while they are in transit.

True

Describe electrical data processing Insurance (EDP). True or False: This form provides a package of coverages including: (1) Property coverage for equipment ("hardware"), data and media (recorded information and the software on which it is recorded). Coverage is also provided for extra expense to cover abnormal expenses of operating following covered damage, and business interruption to cover losses resulting from having to shut down operations because of covered damage; and (2) Liability insurance, which covers the insured's liability arising from handling and storing data for other firms (data processing service firms).

True

Describe freight coverage in ocean marine insurance. True or False: Provides protection for the vessel owner in the event freight charges is not paid. The total loss of the ship may involve the loss of the freight, which was to be earned on the cargo. The owner of the hull does not earn freight until delivery of the cargo except by contractual arrangement between the parties. Therefore, should the ship sink or the cargo otherwise become lost, the freight is also lost. Freight insurance is often made part of the regular hull coverage rather than being written as a separate contract.

True

Describe hull coverage. True or False: Coverage for loss of or damage to the vessel for perils of fire, lightning, earthquake, assailing thieves, "perils of the seas," jettisons, barratry of the master or mariners and "all other like perils." The policy may cover the ship during a given period of time, usually one year, and is normally issued on a valued basis, as well as for a specific geographic area.

True

Describe liability coverage in ocean marine insurance. True or False: In addition to other potential losses to the ship, there is also the risk that the ship will collide with another vessel. In order to provide protection for this exposure, a collision or running down clause is made a part of the policy, usually as part of the hull coverage. The running down clause is intended to provide protection should the shipowner be held liable for the negligent operation of the vessel in damaging another ship.

True

Describe the cargo coverage in ocean marine insurance. True or False: The coverage of loss or damage to goods, shipped, may be written on either of two forms. A floating or open form covers goods of a certain class up to certain limits. Such contracts have no termination date, but either party may cancel with 30 days notice. Shipments both incoming and outgoing are automatically covered. The shipper reports to the insurer at regular intervals as to the value shipped or received. The open cargo form is designed to accommodate shippers who are shipping goods throughout the year. A single risk form is available to cover a particular shipment only.

True

Describe the contractor's equipment floater. True or False: This form is uncontrolled and covers the heavy machinery, equipment and tools a contractor needs to conduct business. Contractor's equipment needs to be protected while on the job site, on the way to and from a job site, and while equipment is temporarily stored. Coverage is provided on a named perils or "all risk " basis. Tools, machinery and equipment owned, rented or borrowed by the insured can be covered.

True

Describe the free of particular average clause. True or False: Particular average losses are partial losses which are accidental and do not require contribution from other parties. Under the particular average clause, the loss is to the particular party who has the damaged property. This clause provides that no particular average loss will be paid unless the loss is cause by certain perils such as stranding, burning, sinking or collision.

True

Describe the general average clause. True or False: In ocean marine insurance, the term "average" means loss or damage. A general average clause refers to a loss which is a voluntary sacrifice of part of the ship or cargo, made by the master of the ship to avert a common peril which might well destroy the entire ship or cargo unless the voluntary sacrifice is made. Such a sacrifice or expense is borne proportionately by each party involved in the proportion that the value of its interest bears to the total value of all-interest engaged in the common venture.

True

What are the "uncontrolled" forms for inland marine insurance policies? True or False: There are an endless variety of uncontrolled marine forms. Some of the more widely used include: annual transit, trip transit, motor truck cargo, instrumentalities of transportation or communication (bridges, tunnels, piers etc., bailees customers (cleaners, dyers and laundries, furriers etc.), furriers customers, contractor's equipment, installation, installment sales, electronic data processing equipment, and dealers (furriers block, art, coin and stamp).

True

What are the specific controlled coverage forms for inland marine insurance policies? True or False: Each of the following forms provide the very broad "all risk" coverage typical of inland marine coverages: accounts receivable, camera and musical instrument dealers; commercial articles; equipment dealers; film; jewelers block; mail coverage; physicians and surgeons equipment; signs; theatrical property; and valuable papers and records.

True

What can be covered by the instrumentalities of transportation and communication form? True or False: Bridges, tunnels, oil pipelines, dams, piers, docks, radio and TV towers can be covered under uncontrolled forms. While this property itself in not portable, it does have a direct connection with transportation and is subject to many of the same perils as property in transit. Coverage is for both direct damage and loss of revenues caused by damage.

True

What coverage is provided by the mail coverage form? True or False: A controlled form which is also a type of transportation form. It provides "all risks" coverage against loss to property sent by registered mail, first class mail, certified mail or express mail. A separate non-filed parcel post policy covers mail sent by parcel post. Coverage is issued in a reporting basis wherein the insured reports values of shipments, with separate limits for first class and certified mail, U.S. postal express mail, and registered mail.

True

What is considered the function of inland marine insurance? True or False: Generally considered to be covering property; in transit or subject to transit, land mobile equipment (but not licensed highway equipment), an "instrumentalities of transportation and communication" (bridges, tunnels, radio and TV towers, aerial navigation beacons, dams, piers and docks, pipelines and power transmission lines).

True

What is meant by the terms "controlled" or "uncontrolled" in inland marine insurance? True or False: A controlled line is one wherein a standard provisions form is promulgated by a bureau and filed for uniform use. An uncontrolled inland marine line is one wherein the individual insurer may use its own form and vary it for the individual risk.

True

What perils are frequently included for hull or cargo coverage? True or False: Perils of the sea (interpreted to include wind, waves, collision, stranding, sinking and other such accidents); War (to include war, an endorsement referred to as "free capture and seizure clause must be added); Fire (both direct or consequential losses as a result of fire); Enemies (all types of taking of the insured property by force); Jettison (voluntary throwing overboard of parts of the ship or cargo); Barratry (means fraud by the master or crew with intention of reaping gains at the expense of the owner); All Other Perils(includes "all other like perils, losses, and misfortunes"; it does not imply and "all risk" coverage).

True

What three forms are required when the commercial inland marine coverage part is written as part of a CPP? True or False: In addition to common policy declarations and the common policy conditions the following must be included; commercial inland marine declarations form; commercial inland marine general conditions form and one or more of a specific group of controlled coverage forms.

True

When is a motor truck cargo policy used? True or False: An uncontrolled form designed to protect the carrier, instead of the shipper. There are only a few things, such as an act of God (flood, tornado, etc.) or the shipper's own neglect (poor packing, etc.), for which the carrier is not liable. This form provides protection for the carrier's broad liability, insuring against loss to cargo belonging to others (the shipper) for which the carrier is liable.

True

Which of the six categories of the Nationwide Definition of inland marine insurance are the subject of marine insurance, commercial inland marine forms, and personal inland marine policies? True or False: Imports and exports are the subject of marine insurance; domestic shipments, instrumentalities of transportation or communication represent risks eligible for commercial inland marine forms; and the personal property floater risk category is provided by the personal inland marine policies.

True

12.2b Commercial Inland Marine Policies:

Uncontrolled inland marine may be written on an "all risk" or named perils basis. Domestic Shipments - A wide variety of inland marine transportation forms are designed to provide coverage for domestic shipments whether they travel by truck, train, air or mail. Businesses that ship or receive merchandise need coverage against loss to their cargoes while they are in transit. Common carriers (those to hold themselves out to the public to ship goods) must accept a certain amount of liability for losses to cargo; there are many losses for which the carrier is not responsible. Various inland marine transportation forms have been developed cover this exposure.

In terms of perils, how are the uncontrolled lines of inland marine insurance policies written? May be written on an "a___ r____" or named peril basis.

all risk

What is meant by the term F.O.B. (Free On Board)? When cargo is shipped F.O.B., the b____ assumes r____ for the cargo once goods reach the d____ point.

buyer, responsibility, designated

How was Inland Marine insurance developed? Inland Marine insurance was first as an extension of Ocean Marine coverage to provide coverage for c____ traveling over l____ instead of by sea.

cargo, land

How is Commercial Inland Marine coverage generally rated? Commercial forms often utilize the rating applicable for ____ ____ as a base.

commercial property

What is the Nationwide Definition of Inland Marine insurance? To help identify the kinds of risks, which are eligible for either Ocean or Inland Marine insurance, the industry developed a Nationwide Definition, which is a list of six categories of e____ m____ r____.

eligible Marine risks

Describe a bailees customer's policy. A bailee may purchase a bailees customers policy, which r____ the insured for damage to customer's property in his or her care, whether or not the insured is l____ for the damage, provided damage resulted from a peril insured a____.

reimburses, liable, against

What is meant by the term F.A.S. (Free Along Side)? When cargo is shipped F.A.S., the s____ assumes the c____ and r____ until delivery of the cargo alongside the vessel and within reach of its l____ tackle.

seller, costs, risks, loading

When is a trip transit policy used? It is an u____ form very similar to the annual transit policy. However, it is used to insure s____ shipments of goods for companies who have only occasional shipments to insure. Coverage extends from the time and point of o____ to the time and point of d____.

uncontrolled, single, origin, destination

When is an annual transit policy used? It is an u____ form that protects the shipper or receiver of goods against loss to goods in t____. Coverage is available on a named perils basis or "all risk" basis.

uncontrolled, transit