CSR Commercial Inland Marine Flashcards
Commercial Inland Marine Insurance Policy
Provides specific coverage for property not confined to a specific location or that is being transported.
Four types of property eligible for coverage:
Property in Domestic Transit
Property in the Custody of a Bailee
Property deemed to be an Instrumentality of Transportation and Communication
Movable Property
unlike other lines of insurance, an insured who needs commercial inland marine coverage could end up with multiple policies from a variety of carriers. in addition, the coverage provided for one insured can vary immensely from the coverage provided to another insured. this is because commercial inland marine coverage is dependent on the insured’s classification of business. Insurance carriers will not mix filed coverage forms with non-filed policies or floaters within the same policy. As such, separate policies for each could be provided to the insured.
Property in Domestic Transit
Any property being moved domestically from one location to another is eligible for coverage by a commercial inland marine policy.
Examples:
shipment of property from a supplier to a customer
private shipments of property from one party to another
shipment of property from a warehouse to a retail outlet
sales persons’ samples
athletic team equipment
contractors’ job site equipment
property en route to a fair/exhibition/convention
fire or police dept equipment
fine arts and antiques in transit
equipment of any kind that is remotely used off-site
Property in the Custody of a Bailee
A bailee is any person or business who has the property of others in their care, custody, or control for a specific purpose. Examples: dry cleaners jewelry repairers furriers computer repair shops warehouses storage facilities delivery services exhibit companies further/appliance repair shops
Property deemed to be an Instrumentality of Transportation and Communication
This includes property that is instrumental for communication and/or transportation to occur. Examples docks dry docks and marine railways transmission lines, towers, and related equipment outdoor cranes and loading equipment bridges tunnels piers pipelines wharves
Movable Property
any property (other than vehicles) that is moved to multiple locations. Commercial inland marine coverage will follow the property to wherever it may go.
Examples:
contractor’s equipment
medical equipment
tools or equipment belonging to trade or repair persons
testing equipment
musical instruments
photography equipment
pet grooming equipment
vending machines
equipment which moves from one facility to another
Two main types of Commercial Inland Marine overages:
Filed and Non-Filed
Coverage Form
A standardized insurance form used to create an insurance contract.
Filed Coverages
Coverage rules, rates, and forms must be filed by the insurance carrier with the state insurance department. Because of the increased regulation, exposures for filed overages stay relatively constant. Knowing that exposures are pretty much the same, each type filed coverage has their own specific coverage form.
Examples: Accounts Receivable Coverage Form Camera and Musical Instrument Dealers Commercial Articles Coverage Form Equipment Dealers Coverage Form Film Coverage Form Floor Plan Coverage Form Jeweler's Block Coverage Form Mail Coverage Form Physicians and Surgeons Equipment Coverage Form Signs Coverage Form Theatrical Property Coverage Form Valuable Papers and Records Coverage Form
Non-Filed Coverages (ask Floaters)
Do not have filing requirements. Due to this, the exposure, coverage, and pricing between policies can vary greatly. Unlike filed Coverage Forms, non-filed coverage forms are often referred to and written as floaters.
Examples: Builder's Risk Policies Contractors Equipment Floaters Installation Floaters Specialized Computer Policies Transportation Policies Transmission Towers Bailee Policies
two primary valuation methods in commercial inland marine:
Actual Cash Value (ACV) - the cost to replace the property minus depreciation
Replacement Cost - the cost to replace the property with like kind and quality without taking depreciation into account
Unlike commercial property, commercial inland marine may utilize one or both valuation methods within the same policy.
Coinsurance Provision Percentage
agreement that requires an insured to purchase adequate insurance coverage limits for their property. ideally, the coverage limits should reflect the property value as determined by the chosen valuation method(s). Most common:
80% of the properties total value
90% “ “
100% “ “
Example:
Kelly has property under an equipment floater that she has determined to have an actual cash value of $100,000. Additionally, she has opted for an 80% coinsurance percentage for her equipment floater. Kelly’s floater limit will then be set by the carrier for $80,000.
Schedule Coverage
Unlike Commercial Property that can have both Schedule and Blanket Coverage, commercial inland marine coverage limits can only be written through schedule coverage.
This method involves writing coverage limits that are scheduled (specific) to each property item or a group of property items (ex. miscellaneous tools) included in the policy. At the time of a loss, this method makes the limit for one item of property separate from the limit for another.
Covered Causes of Loss
Whether or not coverage is applied depends on the type of peril that caused the property to be damaged or lost. Like in Commercial Property Coverage, there is a Basic Form, Broad Form, and Special Form
Basic Form
perils that will be covered Examples: fire lightning explosion smoke windstorm hail riot civil commontion aircraft vehicles vandalism sprinkler leakage sinkhole collapse volcanic action
Broad Form
In addition to the basic form's specified perils it will also cover: falling objects weight of snow ice water damage collapse from specified causes sleet
