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imports and exports, domestic shipments, bridges, tunnels, piers, docks, pipelines, telephone lines, TV towers

InLand Marine

on land or air

Ocean Marine

on the water

Shipper's Losses

Cargo Owner
Loss: Damage to Cargo

Carrier's Losses

Vessel Owner
Loss: damage to vessel, freight, liability for cargo and other vessels, injury to crew, oil spills

Voyage Insurance

Type of Cargo Insurance - single trip; agreed value

Open Cargo

Type of Cargo Insurance - covers everything shipped within policy period

Open Cargo Valuation

Amount of Invoice + Frieght + % to cover additional expenses (10%)

Warehouse to Warehouse Clause risks

Natural disasters, civil authority, strikes by port workers

Warehouse to Warehouse Clause includes

Inland and Ocean Marine transit

Covered claues are written on an

all risk basis; pirates
exclude: war, strikes, civil commotion

Sue & Labor Clause

resonable measures taken by vessel owner to protect vessel
ie: thrown goods over-board to save ship

Maritime Law under Sue & Labor Clause

ship owner and all parties share in loss of property owner who suffered loss

Hull Insurance

covers physical damage to ship

Hull Insurance includes

machinery, boiler, fuel supplies

Hull Insurance excludes

cargo on ship

Hull Insurance covered casues of loss

perils of the sea, fire, lightning, earthquakes, barratry

Barratry -

misconduct by crew that is against ship's best interest

Collision Liability Clause

damage to other ships and their cargo

Protection and Indemnity

liability from operation of a vessel - damaged bridges and piers; injury to crew and passengers; damage to cargo

Inland Marine includes

railroad, truck, aircraft, US postal service

Shipper -


Carrier -


Common Carrier liability

safe deliviery of cargo entrusted to them

Common Carrier exceptions

acts of God, public enemies, public authority, fault of shipper

Bill of Loading

contract may limit liability to common carrier

Straight Bill

no limit to liability or recovery to common carrier


owner of personal property

Bailment -

another's personal property in temporary possession of someone else


party possesing the property in bailment

Inland Marine causes of loss

usually all risk - theft, breakage, damage

Filed Classes -

rates and forms field with the state, protect average customer

Non-filed classes -

smaller number of insureds, diverse exposures, flexibility with coverage

Bailee Liability -

warehouse owner's LL policy - covers liability while goods are stored in insured's warehouse

Bailee's Customer Policy -

covers goods of customer while in bailee's possession;

Bailee's Customer policy exsists to

persereve goodwill

Transit Coverage -

owner's property being shipped in their own vehicles

Trip - Transit Coverage -

very specific - occasional shippers

Annual Trip - Transit Coverage -

year round policy - frequent shippers

Theatrical Property includes

(Inalnd Marine) stage material, scenery, props, costumes for theatrical production

Film Coverage includes

(Inland Marine) film, video, sound recording equipment etc

Signs Includes

(Inland Marine) neons, fleurescents, automatic, mechanical signs

Physician's & Surgeon's equipment includes

(Inland Marine) materials, supplies, books of surgeons, doctors and dentists
also - office equipment, extra expenses, valuable records

Commerical Articles Coverage Form -

photographic equipment and musical instruments used for commerical purposes
users of equipment

Dealers of Coverage Form -

covers retail store and equipment of others while in possession of the bailee

Jeweler's Block -

coverage of damge to property and stock; small jewelers

Jeweler's Block Filed Policy -

$250,000 or more, wholesalers, manufacturers

Accounts Recievable Coverages -

pays for unrecovered recievables due to damged records - cost to reconstruct, interest on loans, amounts not collected

Contractor's Equipment =

largest class of inland marine

Contractor's Equipment Floater -

mobile equipment or tools on a job site

Scedule (Contractor Equipment Floater)

small to midsized contractor specifically lists equipment - includes rental reimbursement

Blanket (Contractor Equipment Floater)

larget contracts use broader version - includes rental reimbursement

Builder's Risk coveage

structures being built, temporary structures, materials, includes - flood, earthquake, theft

Wrap - ups

Builder's risk - puts all risks associated with construction on one policy - everyone splits set percentages of the premium

Advantages of Wrap - Ups

1. save money lumping coverages together - cost efficient
2. certainty that every contractor, laborer, worker is covered

Soft - Cost Endorsement

(included in Wrap - Up) expenses that occur after a driect loss - additional interest on borrowed funds, taxes, additional lease costs due to delayed construction

Law of Torts -

violation of a person's rights by another - torts, contracts or statues

Tort -

private or civil wrong

Tort Classifications (2)

1. intentional - assault, slander, libel
2. unintentional - negligence

Most common negligence



failure of a person to exercise the proper degree of care

Burden of Prood of negligence is on ...

injured party

Absolute / Strict Liability

imposed whether anyone is at fault - ultra hazardous activities

Punitive Damages -

punish defendants whose conduct is questionable or grossly negligent; high fines to make example of

Measurement of Losses in Negligent claims (3)

1. property - book value
2. Bodily injury -medical expense and loss of income
3. general damages - pain and suffering

Vicarious Liability -

one person becomes LL for negligent behavior of another - child/parent, employee/employer

Joint and Sereral Liability -

"Search for deep pockets" injured party may recover entrie amount of compensation from any negligent party who is able to pay - regardles of degree of party's negligence

Premises Liability -

owner or tennant may be held liable for damages if somone else is injured (tennants policy)

Operation Liability - AKA "operations in progress)

operations conducted away from premises

Product Liability -

manufacturers faulty product that injures someone or damages property

Negligence of Product Liabilty (2)

1. product is improperly made or designed
2. proper warning is not given to customer

Losses of Product Liabilitiy (3)

1. cost of defending against claims
2. payment for claims to injured
3. cost of recalling defective product

Commercial General Liability - (CGL)

used to cover business liability exposures

CGL Coverages - (3 parts)

A: bodily injury & physical damage
B: personal & advertisment injury
C: medical payments

CGL Coverage A: insuring agreement -

insurere pays damages on behalf of insured

CGL Coverage A: 6 Conditions - (required for insured to pay claim)

1.Legally obligated to pay damages
2. bodily injury / property damage
3. injury or damage to which conditions arent excluded
4. caused by occurrence
5. covered territory
6. occurs during policy period

1. Legally obligated to pay danages -

setteled by court or through insurance company - insurer will usually attempt to settle out of court

2. Bodily injury / property damage -

damage for care, death, pain and suffering / loss of use of property

3. injury or damage to which conditions apply -

anythign NOT excluded

4. Caused by occurrence -

accident - conditions or repeated exposure to the same harmful conditions

5. Covered Territory -

defined area of policy - usually US, Peurto Rico, Canada
can cover activities of a person temporarily pursuing insured's business interests (3-6 months)

6. Occurs during policy period

occurrence is triggered within policy period, can be reported after policy period

CGL Coverage A: Exclusions

1. intended injury
2. contract liability - (hold harmless agreement)
3. liquor liability
4. pollution
5. worker's compensation
6.aircraft, auto, water craft
7. war

CGL Coverage B: personal and advertising injury - includes:

1.false arrest, imprisionment
2. malicious prosecution
3. wrongful eviction, entry or violation of privacy by landlord
4.slander, libel
5. violation of privacy
6.copyright infringement

CGL Coverage B: Exclusions

1.breach of contract - "in stock"
2. failure of statement of quailtiy - "will grow hair"
3. intentionally stealing another's slogan or making a false claim
4. criminal act
5. wrongful description of price
6. email or domain named used to deciet competitors

CGL Coverage C -

payment for minor medical injuries- NOT liability insurance

CGL Coverage C: advantages

avoid potentional claimants, settle promptly,

CGL Coverage C: exclusions

1. insured
2. anyone hired to do work - worker's compensation
3. tenants
4. persons taking part in athletics

CGL - Named Insureds

1. individual
2. partneror joint venture
3. Corporation
4. LLC
5. Trust

CGL Named insureds - Individual

owner and spouse - business only NOT personal

CGLNamed insureds - partnership

members and spouses - business only

CGL Named insureds - corporation

execs, directors, stockholders

CGL Named insureds - LLC

members and managers

CGL Named insureds - trust

trust and trustees

CGL Insureds - Employees and Voluntary Wokers

ONLY property damage

CGL Insureds - other persons

1.real estate agents representative (insured dies)
3.newly acquired organization - 90 days until end of policy period

CGL Conditions - bankruptcy

does NOT relieve insurer of duties; must still - pay claims, defend insured, make settlements

CGL Conditions - Duties of Insured

1. notify insurer of claim
2. information of claim and claimant
3. authorize insurer to act as legal council
4. assist insurer
5. NOT assume any obligation or payment without insurer's consent

Insurer does not renew =

written notice 30 days prior to cancellation

Premium Audit -

CGL's can be issued on estimated premium
determined after policy - settle up - more of less premium at the end of policy period

CGL is excess for -

1. fire
2.builder's risk
3. installation risk
4. fire insurance on premises rented to insured
5. air, water craft, auto

Contribution by Equal Shares -

each insurer contributes equally until limit is exhausted

Rating CGL Coverage (formula)

Rate x Rate Exposure = premium

Class Code -

rate depends on nature of business
numerical code representing the rating that best fits an organization's operations

Premium Base -

retail = sales
contracting = payroll
special events = # of tickets sold

Claims Made Forms -

occurrence based policies - (used to be the norm)

Negative of Claims Made Forms

long tail exposure - asbestos and pollution
hard to predict ultimate costs
impacts insurer capacity and solvency

Claims Made Trigger -

coverage must be triggered during policy period - notification (not settlement)

Retroactive Date -

date after which a claim must occur for it to be covered - NO retro date = inception of date of policy

Retroactive Date assists when..

you switch from claim based and might need to file a claim during the policy but occurred before the policy inception

Extended Reporting Period -

"Tail" extends period in which a claim can be filed - Does NOT extend coverage

Extended Reporting Period is __________ days

60; unless purchased supplemental extended period which is indefinite

Aggregate Limit -

most insurer will pay during any policy period - when exhausted no more claims are paid or legal defense until next policy period

General Aggregate Limit (Sub Limit) -

most insurer will pay for coverage A, B and C combined

Each Occurrence Limit -

most an insurer will pay for single occurance / one person's claim

Employee Theft -

direct loss money, securities, property due to forgery or theft; acting alone or in collusion

employee -

currently on payroll or employment ended in the last 30 days

Employe Theft - Exclusions

1. partner / owner
2. employee - if insured knew of fraudulent or dishonest behavior before or during employment

Partner Theft -

loss amount exceeding partner's ownership percentage times insured's total assets deteremined as of the day immediately preceeding the date of discovery or may be excluded in full

Forgery or Alteration Coverage -

direct loss resulting from forgery or alteration of a check, draft, promissory note, written promise

Forgery -

signing another person's name with the intent to decieve - handwritten, electronic or mechanical
NOT signature of one's own name - with or without permission

Computer Fraud -

unathorized entry, deletion or alteration of data; transferring money or securities without account owner's permission

Money Orders & Counterfeit Currency Fraud Coverage -

loss from the good faith acceptance in exchange for merchandise, money, money order or counterfiet currency

Client or 3rd Party Coverage -

direct loss of money, securities or property sustained by a client resulting from forgery or theft; can include employee

Client or 3rd Party Coverage - Exclusions

1. employee and client collusion
2. client

Inside Promises Coverage -

third party theft, distruction or disappearance of money, securities or property

Premises -

interior portion of a building occupied by insured, used in conducting business

Banking Premises -

interior portion is the extended by or night depository chute or safe maintained by bank

Property Coverage -

resulting from robbery or safe burglary; damage to property or premises

Outside Premises Coverage - Transit Coverage

being conveyed outside the premises from one person to another; custody of employee, owner, authorized person

Property Coverage - While-In-Transit

resulting from robbery; taken while temporarily in the home of an employee or partner

Mail & Carrier Exclusion

no coverage for money, securities, property while in the mail or custody of a carrier for hire

Crime - General Exclusions

1. act of partners
2. government action
3. indirect loss
4. legal expenses
5.nuclear war

Money -

currency, coin, bank notes or bullion; ISO includes travelers checks, checks, register and money orders held for sale in public

Securities -

negotiable or non-negotiable instruments representing money or property; tickets, tokens and stamps

Property -

tangible property; ISO includes "that which has intrinsic value"

Discovery -

knowledge acquired by specific individuals (officers or risk managers) which would now cause a reasonable person to believe a covered loss occurred

Discovery Form (Crime) -

cover losses were discovered during the policy period; does NOT matter if it occurred prior to inception of policy

Loss Sustaied Form (Crime) -

covers losses that are sustained during policy period; must be discovered no later than one year after the policy period

Valuation (Crime) - Securities

valued as of the close of business the day it is discovered

Valuation (Crime) - Property

insuer's options - chooses cheapest cost
1. replacement cost
2. repair property
3. actual cash value

Equipment Breakdown -

AKA: Boiler and Machinery
covers loss due to accidental breakdown of most equipment; damage to equipment and other property

Equipment Breadown - includes

1. undre BPP - steamboilers, generators, pumps, turbines, engines, air conditioners, refrigerating items
2. plus - electrical breakdown, mechanical breakdown, steamboiler explosions

Breakdown -

some sort of physical loss of equipment due to pressure, mechanical failure, electrical failure

Equipment Breakdown - Covered Equipment

built to operate under pressure or vacuum, generate power, communicate and computer equipment

Equipment Breakdown - Property Damage

property insured owns, insured's possesion of another's property - must reside at premises named in declarations

Equipment Breakdown - Expediting Expenses

payment for extra cost to maek temporary repairs and speed up permanenet repairs; overtime, good for business that doesn't have retail space

Equipment Breakdown - Spoilage Damage

payment for losses of perishable goods due to breakdown; includes expenses associated with reducing losses

Equipment Breakdown - Utility Interruption

coverage for shut down of equipment due to failure of utility service - electricity, AC, communication, gas, sewer, water, steam

See more

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