Chapter 5 Flashcards
(40 cards)
Define “Bailee for Hire
Person or organization who has temporary custody of the personal property of another for a purpose other than sale and who is compensated as a condition of such custody.
Identify three types of bailees and provide an example of each
i) Repair of personal property Example: Television repair shop
ii) Storage of personal property Example: Public storage warehouse
iii) Delivery of personal property Example: Courier service
Define “Ordinary Care”
Requirement to take the same care of the goods of others as would be taken by a prudent and diligent owner of such goods.
When could bailees be responsible for damage to customer’s property?
Bailees may be responsible for damage to customer’s property when negligent in common law or in contract.
Other than stock coverage found on bailee’s commercial property policies, what are two other policies that could be used to insure customer’s property?
i) Separate policy covering legal liability of bailee
ii) Specialized policy insuring customer’s property which ignores requirement for legal liability
By knowing answers to certain questions, brokers should understand whether the carrier or the owner of property should purchase insurance when selling Inland Transportation Insurance. What are these questions?
i) Who would be responsible for loss to property?
ii) What is the extent of responsibility?
Define “Common Carrier”
Common carriers are those transportation companies that will provide transportation services to any person needing their services.
What is the general rule regarding the responsibility of common carriers?
Common carriers are responsible for the safe delivery of property in their care
Common carriers will not be held responsible for all losses to goods in their possession. Identify five of these losses.
i) Acts of God reasonably foreseeable
ii) Acts of public enemies
iii) Acts of public authority
iv) Neglect or default shipper
v) Inherent vice of property transported
What documents are used by common carriers to limit their liability to owners
Bills of lading
Describe the 3 types of Bill of Ladings
i) Standard (ordinary) Bill of Lading - The carries liability is limit to the tariff for that class of goods
ii) Valued Bill of Lading - Increases the carriers liability to the negotiated amount
iii) Released Bills of Lading removes carrier from any responsibility for the shipment.
Define a ‘Contract Carrier’
Contract carriers will carry the goods of contracted customers only, unlike common carriers that will carry anybody’s property.
Define a ‘Private Carrier’.
Private carriers carry their own goods or goods given to them as bailees
When property is insured by a Transportation Floater Broad Form, when does coverage begin and when does coverage end?
Coverage begins when property leaves premises and continues until property is unloaded at final destination.
When would insureds purchase a Trip Transit Policy?
When clients only require coverage for a single shipment.
What is a catastrophe limit and why is it used?
Catastrophe limits are the most an insurer will pay in any one occurrence of loss. Insurers, to limit coverage in large losses, use catastrophe limits.
What are four problems which occur when owners rely on carrier’s insurance?
i) Carriers may not have amounts of coverage needed to properly insure customer’s property
ii) Carriers may have limited perils insured
iii) Carriers may have violated policy condition which negates coverage
iv) Carriers may not have renewed policy or may have canceled policy
What are four advantages for owners when they purchase their own insurance on goods being transported?
i) Owners are able to claim from own insurers which speeds claims settlement
ii) Owner’s policy will insure actual value of shipment, not amount carrier is responsible by law for bill of lading
iii) Coverage provided by owner’s policy may insure more perils than carrier’s insurance
iv) Owners will have lower premiums than carriers insurance
What are two key exclusions found in the Tool Floater?
i) Loss or damage to electrical apparatus caused by artificial electricity
ii) Loss caused by mysterious disappearance
Identify types of property insured by Contractor’s Equipment Floaters?
Contractor’s Equipment Floaters insure all kinds of moveable equipment owned, rented, or leased by clients.
Why would insurers impose a catastrophe limit on contractor’s equipment?
Insurers are worried about large losses because of the high values insured.
What guidance should brokers provide when catastrophe limits are used on Contractor’s Equipment policies?
Brokers should advise clients not to store all of their equipment in ways that may expose all equipment to one occurrence.
What are three conditions of coverage on Newly Acquired Equipment found on Contractor’s Equipment Floaters?
i) Equipment insured by this extension must be similar to what’s insured on policy
ii) Coverage for this newly acquired equipment is insured only for 30 days from date of acquisition
iii) Amount of coverage for newly acquired equipment is limited as to the amount
Indicate covered or not covered on Contractor’s Equipment Floater: Damage caused when a front-end loader lifts a load above its designated lifting capacity.
Not covered
