AAIS NON-FILED INLAND MARINE COVERAGE FORMS OVERVIEW

(February 2018)

WHAT "NON-FILED" MEANS

Non-filed Inland Marine lines are Inland Marine coverage forms that are not usually subject to state form, rate, or rule filing requirements. The coverage forms presented in this section are considered not filed based on the Nationwide Inland Marine Definition. Non-filed lines are not filed because the coverage provided is subject to numerous variables that make a quantified and logical rate structure difficult. This permits variations so that the insurance can match the exact exposure presented. However, this flexibility is a double-edged sword for the insured. When the market for a specific line of insurance is soft, negotiations with the right underwriter can minimize pricing and maximize coverage. On the other hand, when the market for that line is hard and loss experience is poor, another underwriter can limit coverage and significantly increase pricing. Larger risks still have some influence but smaller ones are subject to significant swings in both price and coverage.

Another concern for consumers and agents is the difficulty in comparing coverages. Although coverage forms may have similar names, there can be significant differences in coverage, application of deductibles and coinsurance, and limits of insurance. It is difficult to change insurance companies because the differences in coverage can be considerable. Experience and knowledge are the keys to handling non-filed Inland Marine. The right underwriter can create a coverage that fits the insured like a glove. The wrong underwriter can leave an insured poorly covered with significant gaps that are realized only when a loss occurs. Care and communication between all parties is essential to avoid embarrassment and a loss that is not covered.

Please note that some classes included in this section as non-filed may be subject to filing requirements in a particular state.

BRIEF DESCRIPTION OF THE AAIS NON-FILED INLAND MARINE COVERAGE FORMS

Bailee Customers Floater Coverage–Dry Cleaners and Laundry Form

Property Covered:

Property of others in the named insured's care, custody, and control for dry cleaning, laundering, dyeing, alterations, repairs, and similar or related work

Perils:

Risks of direct physical loss or damage, except as excluded or limited

Considerations:

Coverage can be extended to include storage.

Broadcasting Equipment and Tower Coverage Forms

Property Covered:

Broadcast towers, transmitting, and receiving equipment, media, purchased recordings, and mobile equipment owned, leased by, or in the named insured's care, care, custody, or control

Perils:

Risks of direct physical loss or damage, except as excluded or limited

Considerations:

Coverage can be extended to include computer equipment, computer software, telecommunications equipment, and business income coverage.

Builders' Risk Coverage Forms

Property Covered:

Buildings or structures during construction, renovation, or repair. The named insured may be the building owner, the builder/contractor, or the party for whom the building is being constructed, renovated, or repaired. Coverage may apply to either a single construction project or multiple jobsites. Multiple jobs are usually written on a reporting basis.

Perils:

Risks of direct physical loss or damage, except as excluded or limited

Considerations:

It is important to understand the reporting method a specific insurance company uses before arranging coverage because of important differences that could have an impact on coverage and premium.

Cold Storage Locker Coverage Forms

Property Covered:

Property of others stored in the named insured’s cold storage lockers

Perils:

Risks of direct physical loss or damage, except as excluded or limited

Considerations:

Coverage is limited to only the named insured’s legal liability.

Contractors' Equipment Coverage Forms

Property Covered:

Owned, leased, or borrowed mobile equipment, such as tractors, cranes, graders, power shovels, forklifts, drills, front-end loaders, backhoes, bulldozers, machinery, draglines, concrete mixers, derricks, pile drivers, tools, and similar equipment

Perils:

Risks of direct physical loss or damage, except as excluded or limited

Considerations:

Coverage can apply to only equipment listed or scheduled, to a schedule of equipment “on file with the insurance company," blanket (unscheduled) coverage, or on a reporting basis.

Contractors' Combination Form–Scheduled Coverage

Property Covered:

Property covered under Builders Risk, Contractors’ Equipment, Business Computer, and/or Installation Floater coverage forms

Perils:

Risks of direct physical loss or damage, except as excluded or limited

Considerations:

This coverage form combines Builders’ Risk, Contractors’ Equipment, Business Computer, and Installation Floater coverage forms into a single coverage form.

AAIS Builders' Risk Coverage Forms Analysis

AAIS Contractors' Equipment Coverage Forms Analysis

AAIS Electronic Data Processing Equipment and Business Computer Coverage Forms Analysis

AAIS Installation Floater Coverage Forms Analysis

Difference in Conditions Form–Property Coverage Part

Property Covered:

Real and personal property

Perils:

Risks of direct physical loss or damage, except as excluded or limited. Earthquake and flood are usually included.

Considerations:

Difference in Conditions (DIC) coverage is sometimes referred to as umbrella coverage for property lines of insurance because it provides coverage that is not in underlying coverage forms and policies. Its name derives from the difference in coverage provisions between it and the underlying coverage forms and policies. The greater the number of differences in coverage between the underlying coverage and the DIC, the greater the coverage it provides.

Drone Coverage Form

Property Covered:

Drones, drone equipment, ground equipment and cargo

Perils:

Risks of direct physical loss or damage, except as excluded or limited

Considerations:

Coverage applies on the ground and during flight. A major limitation is that in flight losses are covered only if the drone is being used in the operations described in the schedule of coverages.

Related Article: AAIS Drone Coverage Form Analysis

Electronic Data Processing Equipment and Business Computer Coverage Forms

Property Covered:

Hardware, software, and website servers the named insured owns or has in its care, custody, or control

Perils:

Risks of direct physical loss or damage, including hacking, computer viruses, web sites, power shortages, outages, and overloads, subject to exclusions and limitations

Considerations:

Hardware means a network of electronic machine components or microprocessors that accept instructions and information and process it according to instructions. Software means media (disks or cartridges that contain instructions and information), data records (files, documents, or other information stored on media), programs and applications. Website servers can be on or off premises.

Equipment Sales and Rental Coverage

Property Covered:

Owned agricultural, construction, and other types of mobile equipment held for sale or rental as well as equipment of others in the named insured's care, custody, or control for servicing

Perils:

Risks of direct physical loss or damage, except as excluded or limited

Considerations:

Coverage limits are based on an amount inside the building and an amount outside the building. The reporting form is very flexible.

Exhibition Floater Coverage Form

Property Covered:

Property the named insured owns or has in its care, custody, or control

Perils:

Risks of direct physical loss or damage, except as excluded or limited

Considerations:

Coverage applies only when property is on display or at exhibition sites or similar exhibits, trade shows, expositions, and fairs away from the named insured's owned, leased, or operated locations. Coverage can be for a single show for a limited period or on an annual basis for risks that have numerous shows throughout the year.

Fine Arts Coverage Forms

Property Covered:

Fine arts the named insured owns or has in its care, custody, or control. Fine arts are paintings, etchings, pictures, tapestries, rare or art glass, art glass windows, valuable rugs, statuary, sculptures, antique furniture, antique jewelry, bric-a-brac, porcelains, and similar property of rarity, historical value, or artistic merit.

Perils:

Risks of direct physical loss or damage, except as excluded or limited

Considerations:

The Fine Arts Dealers Coverage Form is used for dealers and galleries.

The Fine Arts Floater and Collectors' Coverage Forms are used for individuals and businesses not in the fine arts business.

Related Article: AAIS Fine Arts Coverage Forms Analysis

Golf Course Coverage Form

Property Covered:

Golf course property, driving range property, golf carts, and the golf course itself

Perils:

Golf course perils are a list of specified perils. All other property is covered for risks of direct physical loss or damage, except as excluded or limited.

Considerations:

There is no coverage for any of the golf course's permanent buildings or structures.

Related Article: AAIS Golf Course Coverage Form Analysis

Infrastructure Property Coverage

Property Covered:

Real property and equipment of an interrelated system that provides private or public service(s). It can be the insured’s property and/or similar property of others in its care, custody, or control. Some examples are electrical grids, roads, water supplies, and telecommunications.

Perils:

Risks of direct physical loss or damage, except as excluded or limited

Considerations:

Buildings are excluded. This includes buildings used to support the infrastructure property’s operations and buildings that house or cover such infrastructure property.

Related Article: Infrastructure Property Coverage Analysis

Installation Floater Coverage Forms

Property Covered:

Property the named insured owns or has in its care, custody, or control to be installed, fabricated, or erected into buildings being renovated, upgraded, or remodeled and that will become a permanent part of an installation or construction project

Perils:

Risks of direct physical loss or damage, except as excluded or limited

Considerations:

One of the most important parts of the coverage form is the Additional Coverage Limitation–When Coverage Ceases. There are six situations that can end coverage. Coverage ends when any of them takes place.

Installment Sales Coverage Form

Property Covered:

The named insured's personal property in a customer's possession. The property can purchased and be under an installment sales plan or be undergoing a trial period.

Perils:

Risks of direct physical loss or damage, except as excluded or limited

Considerations:

Coverage continues until the final payment on the merchandise is made or coverage expires. Only the named insured's financial interest in the merchandise is covered.

Irrigation Equipment Coverage Form

Property Covered:

Irrigation equipment the named insured owns or has in its care, custody, or control

Perils:

Risks of direct physical loss or damage, except as excluded or limited

Considerations:

Each item of covered property must be scheduled, described, and have a specific limit of insurance.

Miscellaneous Bailee–Processor Floater

Property Covered:

Property of others in the named insured's care, custody, and control for finishing, repairing, restoring, adjusting, and similar or related work

Perils:

Risks of direct physical loss or damage, except as excluded or limited

Considerations:

Coverage can be extended to include storage.

Mobile Equipment Floater Coverage Form

Property Covered:

Mobile property used to conduct business operations that the named insured owns or has in its care, custody, or control

Perils:

Risks of direct physical loss or damage, except as excluded or limited

Considerations:

The property must be subject to regular transit and off premises exposures.

Mobile Medical Equipment Coverage Form

Property Covered:

Medical and scientific equipment the named insured owns or has in its care, custody, or control

Perils:

Risks of direct physical loss or damage, except as excluded or limited

Considerations:

Only mobile equipment is covered. Examples are magnetic resonance imaging (MRI) scanners, computer-assisted tomography (CAT) scanners, x-ray equipment, and ultrasound equipment.

Motor Truck Cargo Legal Liability Coverage Forms

Property Covered:

Property of others the named insured hauls or transports as a common or contract carrier

Perils:

Risks of direct physical loss or damage, except as excluded or limited

Considerations:

The Federal Motor Carrier Safety Administration and state level Public Service Commissions provide guidance and direction on the liability of trucking concerns and their responsibility for the property hauled. Bills of lading or other shipping documents also address the amount of liability for a loss that is the trucker's responsibility. The federal and state regulations plus the bill of lading establish the legal framework to determine the named insured's liability for the property hauled.

Museum Collection Coverage

Property Covered:

Blanket coverage on the insured museum’s collection of objects or fine art. Coverage is not limited to only owned property.

Perils:

Risks of direct physical loss or damage, except as excluded or limited

Considerations:

While coverage is limited to on premises only, supplemental coverage applies for up to $50,000 when the items are in transit or when off premises. There are numerous unique coverage extensions that specifically apply to museums.

Patterns and Dies Floater Coverage Form

Property Covered:

Patterns, dies, molds, and forms the named insured owns or has in its care, custody, or control

Perils:

Risks of direct physical loss or damage, except as excluded or limited

Considerations:

Covered property must be specifically listed and described and have a limit of insurance. It is covered only when not at the named insured’s location.

Renewable Energy Generating Equipment Coverage

Property Covered:

Renewable energy generating equipment such as wind turbines and solar panels

Perils:

Risks of direct physical loss or damage, except as excluded or limited

Considerations:

Wind turbines or solar panels on a roof can be covered in addition to equipment installed on land adjacent to a building or group of buildings that supply power to them. This coverage form is not designed to cover wind farms or large array solar panel farms.

Riggers' Coverage Form

Property Covered:

Tangible property of others in the named insured rigger's care, custody, or control

Perils:

Risks of direct physical loss or damage, except as excluded or limited

Considerations:

Coverage can be limited to only the named insured’s legal liability.

Related Article: AAIS Rigger's Coverage Form Analysis

Rolling Stock Coverage

Property Covered:

Railroad rolling stock the named insured owns or has in its care, custody, or control

Perils:

Risks of direct physical loss or damage, except as excluded or limited

Considerations:

Locomotives, passenger and baggage cars, repair and maintenance equipment, tankers, hoppers, boxcars, flat cars, refrigerated cars, auto carriers, and similar railroad cars designed and used on railroad tracks are considered railroad rolling stock.

Related Article: AAIS Rolling Stock Coverage Analysis

Sales Representative Floater Coverage Form

Property Covered:

Samples of merchandise or stock in trade (including its/their containers and/or packaging) the named insured owns or has in its care, custody, or control

Perils:

Risks of direct physical loss or damage, except as excluded or limited

Considerations:

Coverage applies only when the property is in a sales representative’s possession or when in transit between an insured premises and a sales representative or agent.

Scheduled Property Floater Coverage Form

Property Covered:

Scheduled property the named insured owns or has in its care, custody, or control

Perils:

Risks of direct physical loss or damage, except as excluded or limited

Considerations:

The property must be subject to regular transit and off premises exposures.

Transportation Coverage Forms

Property Covered:

The named insured's property but only while it is being shipped

Perils:

Risks of direct physical loss or damage, except as excluded or limited. Earthquake and flood are usually included.

Considerations:

There are three common coverage forms. The transportation coverage form covers all shipments that use carriers for hire, owned vehicles, railroads, or airlines. The owner's coverage form covers only shipments the named insured makes using its own vehicles. The trip transit coverage form is for a single shipment by a specific mode of conveyance, on a "one shot" basis.

Warehouse Legal Liability Coverage Form

Property Covered:

Property of others stored at the named insured’s warehouse

Perils:

Only perils for which the named insured is legally liable

Considerations:

The Uniform Commercial Code (UCC) establishes the liability of warehouse operators and their responsibility for negligence. Because the warehouse legal liability coverage form insures the operator's liability for property of others in storage, it also covers defense costs. Under defense costs, the insurance company defends any suit brought against the insured. The UCC and the warehouse receipt provide the legal framework to determine the named insured's liability for property being stored.