ISO Wireless Communications Equipment Coverage Form

ISO WIRELESS COMMUNICATIONS EQUIPMENT COVERAGE FORM ANALYSIS

(April 2018)

 

Menu (click here to expand or to collapse)

INTRODUCTION

The Insurance Services Office (ISO) Wireless Communications Equipment Coverage Form is a type of master policy that allows wireless communications service providers to insure their customers’ wireless communications equipment, and related accessories along with the provider’s interest in that  property. This method of insuring the equipment benefits the customer because the equipment is promptly replaced and benefits the provider by minimizing usage down-time because of equipment and encourages customer loyalty.

Coverage applies to the costs to repair or replace wireless communications devices, chargers, data storage cards, ear devices, carrying cases, and batteries. Coverage is usually written on a reporting basis and is usually subject to a deductible. It is not subject to coinsurance. Coverage applies to described property anywhere it is located.

ELIGIBILITY

Wireless Communications Service Providers that provide wireless communications devices to individual subscribers are eligible. This coverage form is designed to protect individual subscriber customers.

POLICY CONSTRUCTION

Computer Systems Coverage requires at least the following four forms:

Note: In contrast to other ISO Non-filed Inland Marine Coverage Forms, IL 00 17–Common Policy Conditions and CM 00 01-Commercial Inland Marine Conditions are not used with IH 00 62. This is because IH 00 62 is designed to be stand-alone coverage and E. Conditions contains the conditions from IL 00 17 and CM 00 01 that apply to
IH 00 62.

IH DS 62–WIRELESS COMMUNICATIONS EQUIPMENT DECLARATIONS

This analysis is of the 10 10 edition.

IH DS 62 contains the following information:

Insurance Company and Producer Name

The name of the insurance company that provides the coverage and the name of the agent or broker that produces the business are entered in the spaces provided.

Insured Wireless Service Provider

IH DS 62 has spaces to enter the name of the insured wireless service provider, its mailing address, and the policy period.

Note: This information is also on the Common Policy Declarations.

Insuring Agreement

The insurance company agrees to provide the insurance this coverage form provides in return for ”you” paying the required premium. This is subject to the all the coverage form’s terms and conditions.

Note: The term “you” is used but that term is not defined within this policy.  

Authorized Service Center

This section has spaces to enter the name of the Authorized Service Center(s) and its/their location(s).

Note: Property entrusted to the wireless service provider is also covered even though its address(es) is not listed.

Description of Property

This section has spaces to enter the following information:

Special Provisions

Any special provisions are entered in the space provided.

IH DS 62–WIRELESS COMMUNICATIONS EQUIPMENT COVERAGE FORM

This analysis is of the 12 13 edition.

INTRODUCTION

This section encourages the careful reading of the entire coverage form to determine what is covered, what is not covered, rights, and duties. It defines we, us, and our as the insurance company that provides this insurance coverage. The reader is also pointed to the Definitions section because certain words or terms used in the form have a more broadened or restricted meaning.

Note: This section in other ISO Non-Filed Inland Marine Coverage Forms also defines you and your as the named insured on the declarations. IH DS 62 does not. However, F. Definitions has a definition for Insured Subscribers.

A. COVERAGE

The insurance company pays for direct physical loss or damage to covered property but only when that loss is from a covered cause of loss.

1. Covered Property

Example: The Completely Clear Cellular Communications Company wants to provide an additional service in order to retain its customers and discourage them from shopping for communications services from other providers. It decides to offer coverage for their equipment that IH 00 62-Wireless Communications Equipment Coverage Form provides as a value-added inducement to do so.

 

Covered property is the following:

a. Wireless communications devices that insured subscribers own. The devices are limited to those that are described in the declarations. The interest of wireless communications service provider in such property is covered in addition to the interest of the subscriber.

 

Example: Completely Clear Cellular offers a variety of phones for the subscribers to purchase. Many can be purchased on monthly payment plan. Sally purchases a device for $1,000 and is paying Completely Clear $100 per month for it. Two months into her purchase, her purse and the device within the purse are stolen. Sally’s interest in the phone is $200 and Completely Clear’s interest is $800.  

b. Standard accessories and components that are used with the property described in a. above. There is a limitation on the coverage. This property is covered only for a loss that involves it and the property described in a. above. The following are examples:

Example: When Sally’s purse is stolen the phone’s data storage card, its carrying case, it charger and its ear buds were taken too. All of these are covered because they were stolen at the same time as the phone.

 

2. Property Not Covered

The following described property is not covered:

a. Covered property that is given to or left with others for service or in order to be repaired or replaced. There is one exception. Coverage applies to property that is given to or left with the authorized service center(s) or service provider(s) listed on the declarations.

b. Wireless communications devices or equipment that are designed to be used with watercraft or motorized vehicles

c. Wireless communications devices or equipment that has had its/their specific identification number(s) removed, altered, or defaced

 

Example: The Completely Clear Cellular Communications Company wrote this wireless communications equipment coverage with ItsAllCovered Insurance Company. Completely Clear turned in a claim for damage to one of its devices but ItsAllCovered’s claims adjuster noted that the unit’s identification number had been filed off. While the unit was the same as other units that Completely Clear sold to its insured subscriber customers, the adjuster denied the claim because he could not positively identify the unit.

 

d. Devices or cards that are used for storage. This applies only to such cards or devices that can be removed by the user.

e. Software that has been downloaded or customized

f. Contraband. Any property that is illegal to own or that is in illegal trade or transportation is not covered.

3. Covered Causes of Loss

Covered causes of loss are direct physical loss or damage to covered property with the exception of causes of loss that are listed in the exclusions section.

B. Exclusions

1. Primary Exclusions

The first group of exclusions applies whether or not the loss event results in widespread damage or affects a significant geographical area and is essentially absolute. Subject to specific exceptions, each is totally excluded, regardless of any other cause or event that contributes to a loss, either concurrently or in any other sequence. The insurance company does not pay for any direct or indirect loss or damage caused by or that results from any of these events.

a. Governmental Action

This exclusion applies to the legal and authorized seizure or destruction of property by a government entity’s order. There is one exception. Loss or damage that is caused when the governmental entity orders property to be destroyed is covered if used as a method to prevent a fire from spreading is covered. However, this exception applies only if the fire being contained would have been a covered fire under this coverage form.

c. Nuclear Hazard

Nuclear reaction, radiation, or radioactive contamination is not covered. There is an exception. If a fire results from   the nuclear reaction, radiation or radioactive contamination there is coverage for the direct loss or damage caused by that fire.

 c. War and Military Action

This exclusion lists three specific warlike activities.

2. Secondary Exclusions

The second group of exclusions applies to loss or damage caused by or that result from any of the following loss events. Some of these exclusions have exceptions, conditions, or limitations that should be noted and reviewed carefully. The insurance company does not pay for any loss or damage caused by or that result from any of these events.

Note: This coverage form does not title these exclusions. The titles given suggest the exclusion’s content.

a. Delay, loss of use, and loss of market

These are consequential or indirect losses that develop as a result of a direct loss or damage.

b. Dishonest or criminal acts

Dishonest or criminal acts that any insured commits are excluded. The acts are excluded whether the insured is acting alone, in collusion with other insureds, or in collusion with others.

There is an exception. Acts of destruction by the wireless communications service provider’s employees, temporary employees, leased workers, or authorized representatives are covered except for acts of theft.

c. Unauthorized instructions

When covered property is transferred to another person or place because unauthorized instructions were received to do so.

d. Cosmetic damage

Note: This term is defined in F. Definitions

e. Abusive or noncompliant acts

Two types of acts by the insured are excluded.

Note: Most actions are intentional but few are abusive. This exclusion appears to exclude abusive acts that are intentional but the broadest of the exclusion makes it difficult to interpret. The ambiguity of the exclusion may make it difficult to enforce.  

Note: This is ambiguous in many ways before of the use of the term intent. The owner of the device may have no information as to the exact intent of the device purchased.

 

Example: Bonehead Bob loves his cell phone but he seems to have unusual ideas as to its purpose.

Scenario 1: Bob gets into a heated argument with Innocent Imogene and hits her in the head with his cellphone. Imogene apparently has a very hard head because she is barely injured but the cellphone is badly damaged. Coverage does not apply to the damaged cellphone because Bob’s act was both abusive to the phone and intentional.

Scenario 2: Bob lost his phone charger and doesn’t want to buy a new one. He decides to recharge his phone using a recharger designed for his hedge trimmer. He manipulates a few things, somehow connects the phone to the recharger, and the phone is zapped and fried. There is no coverage because his recharging procedure violated the manufacturer’s instructions.

f. Depreciation or obsolescence

 

Old and/or Obsolete Wireless Communications Equipment and Accessories

 

Any part or component of covered property is depreciating or becoming obsolete. This could mean that if the only damage to covered property is that it has depreciated or become obsolete there is no coverage for that damage but this is an interpretation. Other interpretations may also be valid making this a rather ambiguous exclusion.

Note: This is a confusing exclusion because of the term depreciation. Depreciated value is addressed in E. Conditions 13. Valuation explains that, when covered property sustains loss or damage and is either replaced or repaired, depreciation is not used to calculate the loss’ value. It might possibly be better to address only obsolescence in this exclusion and address the depreciation in the wear and tear exclusion in Exclusion 3. a. This exclusion may appear redundant because 3. Other Exclusions a. Wear and Tear, depreciation is also excluded. However, in that case it is excluded only if no other covered cause of loss applies.

This confusing approach to depreciation may result in there not being a depreciation exclusion at all.

g. Virus, harmful code, or similar instruction

Any virus, harmful code, or similar instruction that is designed to damage equipment or disrupt operations. It could be added to or made part of a covered property, its data, or be added at the network connection. However it is added, the direct loss or damage to covered property it causes is excluded.

 h. Programming or work upon the property

Loss or damage that is due to work being performed done on covered property is excluded.

 

Example: The Completely Clear Cellular Communications Company directs its customer to send his damage cellphone unit to the WeFixItAllNoMatterWhat Service Center listed on the declarations. WeFixItAll apparently has a bad day and its attempts to repair the unit only make the damage worse, to the extent that the unit is no longer serviceable and functionally destroyed. Completely Clear submits a claim to ItsAllCovered Insurance Company that is denied because of this exclusion. Completely Clear then demands that WeFixItAll reimburse it for the cost of a replacement wireless device for its wireless customer.

 

i. Pollutants

There is no coverage for loss caused by or that results from any release, discharge, seepage, migration, dispersal, or escape of pollutants. There are no exceptions.

j. Voluntary parting

When an insured entrusted with the property is tricked or deceived into giving it away.

k. Neglect

Neglect on an insured’s part to do everything possible to preserve and protect covered property from subsequent damage during and after the time of loss.

l. Theft

Theft by any person “you” entrust covered property to for any reason, whether they act alone or act in collusion with any other party. This exclusion applies 24 hours a day/7 days a week. There is one exception. Covered property that is in a carrier for hire’s care, custody, or control is not subject to this exclusion.

Note: The term “you” used above is not a defined term within the policy which results in this being an ambiguous exclusion.

3. Other Exclusions

This group of exclusions applies to loss or damage caused by or that result from any of the following loss events. In every case, if loss or damage by a covered cause of loss occurs as a result of one of these excluded events, coverage applies to the loss or damage the resulting covered cause of loss causes. The insurance company does not pay for any loss or damage caused by or that results from any of these events.

Note: This coverage form does not title these exclusions. The titles given suggest the exclusion’s content.

a. Wear and tear, depreciation

This is loss or damage due to wear and tear.

Note:

Wear and tear is damage that occurs naturally as a result of aging or normal wear.

Depreciation is loss of value due to time. Refer to exclusion 2.f above.

b. Any quality in the property and miscellaneous items

Qualities in the property that cause it to destroy or damage itself are excluded. Loss or damage caused by electrical and/or mechanical failure, latent or hidden defect, and gradual deterioration is also excluded.

c. Insects, vermin, or rodents

This is loss or damage to covered property caused by or that results from insects, vermin, or rodents.

Note: Some examples are damage from mice, rats, cockroaches, squirrels, beavers, spiders, ants, centipedes, and ticks. Each is characterized by destructive habits that cause damage, such as gnawing and nibbling.

d. Corrosion or rust

This is corrosion or rust that causes loss or damage to covered property.

Note: Rust and corrosion are low-temperature oxidation processes that result in deterioration over time due to inactivity or neglect.

C. Limits of Insurance

The most the insurance company pays for loss or damage to each object of covered property is the limit of insurance on the declarations. The insurance company’s paying any claim or providing replacement equipment that relates to a claim does not reduce the limit of insurance.

There is an exception. Coverage for any insured subscriber is limited to not more than two losses in any policy period that consists of 12-months. After that, coverage for that insured subscriber immediately ends and that subscriber receives notice that there is no coverage and that there are no further premiums to pay.

Note: This section is significantly different than the same section in other ISO Non-filed Inland Marine Coverage Forms because it terminates with respect to an individual subscriber after two losses in any one 12-month policy period.

D. Deductible

The insurance company does not pay for loss or damage to an object of covered property until the amount of the adjusted loss or damage (before capping with the limit of insurance that applies) exceeds the deductible on the declarations. It then pays the amount of the adjusted loss or damage that exceeds the deductible up to the limit of insurance.


More than one object of covered property may be involved in a loss and each may have a different deductible. In that case, only the highest deductible applies to the loss.

 

Example: The Connected Family has a family plan through Completely Clear Cellular Communications Company. A tornado tore through its home one evening. Thankfully, the family members heard the sound of the approaching tornado, everyone rushed to the basement for protection, and nobody was hurt. One family member brought her phone but the others were left behind in the rush to seek protection. The tornado destroyed 15 devices. Only one deductible applies to the total loss because the same occurrence destroyed all the devices.

E. Conditions

Note: As stated under Policy Construction above, many of these conditions come from and/or are similar to IL 00 17–Common Policy Conditions and CM 00 01-Commercial Inland Marine Conditions. Those forms cannot be used
for the IH 00 62 for many reasons. Therefore, all of the relevant conditions must be integrated into this coverage form.

1. Cancellation

a. The wireless communications service provider on the declarations has the right to cancel the policy by mailing or delivering the policy to the insurance company but the notice must be received before the actual date of cancellation. The wireless communications service provider is required to send notice of cancellation to each insured subscriber not less than 60 days before the cancellation’s effective date.

b. The insurance company can cancel by mailing or delivering written notice to the wireless communications service provider at its last known address. The notice must be either mailed or delivered at least ten days prior to the cancellation date when the reason for cancellation is nonpayment of premium. The notice period must be at least 30 days if the cancellation is for any other reason.

Once the wireless communications service provider receives its notice it is required to send notice of cancellation to each insured subscriber at his or her last known mailing address.

Note: There is no statement as to how many days’ notice the insured subscriber is to receive when the insurance company cancels.

c. The notice must clearly state the date of cancellation because it becomes the policy period's end date.

d. Proof that notice of cancellation was mailed is all that is needed to effect cancellation.

Related Court Cases:

Cancellation Held Not Effective When Notice Addressed

Cancellation Validated by Proof Mailing of Notice

Note: This condition is similar to the corresponding condition in IL 00 17–Common Policy Conditions.

2. Changes

The policy that the insurance company issues represents the agreement it makes with the wireless service provider. If that provider requests a change, the insurance company has the right to accept or reject the request. An endorsement that amends, waives, or changes any part of the policy must be attached to the policy.

Note: This condition is similar to the corresponding condition in IL 00 17–Common Policy Conditions.

3. Duties in the Event of Loss

The wireless service provider and the insured subscribers are expected to act reasonably immediately after a loss occurs. The insurance company may not be obligated to pay a loss if they do not. The following must be performed if covered property sustains loss or is damaged:

a. The insured subscriber must notify the police or other law enforcement authorities if a law may have been broken.

b. Prompt notice of loss must be provided. This process has two steps:

When the wireless service provider receives its notice, it is required to stop the insured subscriber’s service for that particular covered property. Doing this does not impact the service for other devices that subscriber may have.

c. The insurance company may request information concerning the claim. If it does, the insured subscriber must send it in order for the claim to be settled. The company may also ask the insured subscriber to complete and sign a sworn proof of loss. If it does, the subscriber must do so within 60 days of the request. The insurance company provides the appropriate form.

d. The wireless service provider is responsible for promptly providing any information or details it has concerning the loss to the authorized service centers. The most important information it must provide is a description of the covered property which should include the device’s identification number.

e. This coverage form is very specific about the way to handle covered property that is damaged.

Paragraph e. does not apply when the covered device was lost or stolen.

 

Example: The Connected Family notified the Completely Clear Cellular Communications Company about the damage to its 15 devices. The representative walks them through the claim process. Six of the devices are found but are seriously damaged. Nine of the devices are never found. The authorized service center mails out replacements for all 15 devices along with six prepaid shipping labels and envelopes. The Connected Family has 20 days to return the damaged devices without being billed.

 

f. The insured subscriber has the responsibility to either take delivery of the replacement device the insurance company sends to him or her or to pick it up at the wireless service provider if the insurance company sends it there.

Notes:

The situation of the loss and the location of the insured subscriber determine whether or not it is more convenient for the insured subscriber to pick up the replacement device or to have it delivered.

These duties are mostly significantly different than the duties in CM 00 01–Commercial Inland Marine Conditions but the intent is similar.

4. Loss Payment

a. Either the authorized service center or the insurance company may settle the loss with the insured subscriber. The authorized service center provides all replacements or makes all repairs unless it makes different arrangements with the insured subscriber.

b. The insurance company is required to let the insured subscriber make its payment decisions within ten days of the insured subscriber providing requested information requested.

c. The insurance company does not pay any insured more than his, her or its interest in the covered property.

Note: This is an interesting aspect because the term insured is not defined or explained. This could mean that the insured subscriber is paid his or her financial interest and the provider is paid its financial interest.

d. The insurance company is required to provide replacement equipment or to pay for the loss or damage within 10 days of receiving information requested. The insurance company is required to take this action only if the insured has complied with the terms and conditions of this coverage form.

e. When all or part of a loss has been paid by others, the insurance company is no longer responsible to respond to that part of the loss.

Note: This condition is similar to the corresponding condition in CM 00 01–Commercial Inland Marine Conditions but is different because of the type of property covered.

5. Parts

Covered property that consists of several parts may sustain loss or damage. In that case, the insurance company pays only the value of the part that sustained loss or was damaged.

Note: This condition is similar to the Pair, Sets, or Parts condition in CM 00 01–Commercial Inland Marine Conditions but is different because it addresses only parts. This is consistent with the type of property IH 00 62 covers.

6. Transfer of Rights of Recovery against Others to Us

The insurance company obtains a person or organization's rights of recovery against others that may be responsible for a loss after it pays for loss or damage to covered property. The right of recovery against others is limited to the amount of the claim payment the company made. That person or organization must do everything it can to protect those rights and not do anything after a loss to affect or impair those rights.

Note: This condition is similar to the same condition in CM 00 01–Commercial Inland Marine Conditions but is different because it addresses persons or organizations, not the named insured.

7. Concealment, Misrepresentation, or Fraud

The insurance company trusts and relies on the wireless service provider and the insured subscriber’s statements and issues the policy and adjusts claims based on those statements. Coverage is void if the wireless service provider or an insured subscriber commits fraud or intentionally conceals or misrepresents any material fact at any time with respect to this coverage, the covered property, its interest in the covered property, or a claim that this insurance covers.

This condition is applied separately to insured subscribers and the wireless service provider.

Note: The final statement in this condition is very different from the one provided in the CM 00 01–Commercial Inland Marine Conditions because the fraudulent actions of an individual subscriber or wireless service provider do not impact the coverage for the non-fraudulent party. The innocent party is to receive coverage while the fraudulent one does not.

8. Control of Property

An insured subscriber is not responsible for acts or neglect by any party that is not under his or her control or direction and the insurance coverage is not affected by those acts.

Note: This condition is similar to the same condition in CM 00 01–Commercial Inland Marine Conditions but is different because it addresses insured subscribers, not the named insured.

9. Legal Action against Us

The wireless s service provider or an insured subscriber may be dissatisfied with the way the insurance company handles a claim. However, neither can bring legal action against the company until and unless the wireless service provider or an insured subscriber complied with all the coverage form’s terms and conditions. In addition, the legal action must be initiated within two years after the insured first knew about the loss or damage.

Notes:

The time to bring legal action is different in certain states because of specific legislation. In those cases, the state's requirements supersede and replace these requirements.

This condition is similar to the same condition in CM 00 01–Commercial Inland Marine Conditions but is different because it addresses the wireless service provider and insured subscribers, not the named insured.

10. No Benefit to Bailee

This insurance coverage is written for only an insured’s benefit. No other person or organization that has custody of covered property benefits from this insurance.

Note: This condition is similar to the same condition in CM 00 01–Commercial Inland Marine Conditions but is different because it addresses ”an insured,” not the named insured.

11. Policy Period

The insurance company pays for only insured losses or damages to covered property that take place during the policy period.

An unusual feature of this policy is the automatic retroactive approval of coverage. Coverage is effective as of the date on which the insured subscriber applied for coverage as long as the insurance company approves the application. See Condition 14 below for what occurs if the application is rejected.

Note: This condition is similar to the same condition in CM 00 01–Commercial Inland Marine Conditions but is different because the condition in CM 00 01 does not address retroactive coverage.

12. Coverage Territory

Coverage applies to described property anywhere it is located.

Note: This condition is significantly different that the corresponding condition in nearly all other ISO Non-filed Inland Marine Coverage Forms that limit the coverage territory to the United States of America, its territories and possessions, Puerto Rico, and Canada.

13. Valuation

a. The value of covered property that sustains loss or damage is based on one of the following, reduced by any rebates that apply:

b. Data is valued at the actual cost to reproduce it. However, data may not be reproduced or replaced. In that case, the insurance company pays the cost of the media’s value without any stored data.

c. Media’s value is the cost to repair or replace it with similar or identical property.

Note: This condition is similar to the same condition in CM 00 01–Commercial Inland Marine Conditions but is different because of the type of property covered.

14. Notice of Rejection of Coverage

The insurance company has the option to reject a potential subscriber’s application for coverage. When that occurs, the insurance company must notify the wireless service provider of that rejection within 30 days.

Note: This condition is unique to this coverage form.

15. Loss Covered Under Warranty

A manufacturer’s warranty may cover the loss or damage to covered property. If so, this insurance does not apply to loss or damage to that property.

Note: This condition is unique to this coverage form.

16. Proof of Purchase of Accessories

When accessories sustain loss or damage, the insurance company has the right to require proof(s) of purchase on such property.

Note: This condition is unique to this coverage form.

17. Proof of Repair of Property

When covered property that sustained loss or damage is repaired, the insurance company has the right to require proof of that repair.

Note: This condition is unique to this coverage form and is needed when the insurance company continues insuring the device because it does not want to pay for the same loss more than once.

F. Definitions

There are six definitions.

1. Authorized Service Center

The organization providing replacement or repair services on the wireless service provider’s behalf. The organization must be listed on the Declarations.

2. Cosmetic Damage

A change in the covered property’s appearance that does not affect the manufacturer’s intended use of the property.

3. Data

This term has two meanings. It is programming records used for electronic data processing in equipment that is electronically controlled. It is also data stored on media.

4. Insured subscribers

An insured subscriber must meet all of the following criteria:

5. Media

Tapes, films, drums, discs, cells, and software and similar items that are used with electronic data processing, recording, or storage.

6. Pollutants

These are any solid, liquid, gaseous, or thermal irritants or contaminants. Pollutants also include smoke, vapor, soot, fumes, acids, alkalis, chemicals, or waste. Waste is any material intended to be recycled, reconditioned, or reclaimed.

ENDORSEMENTS

ISO has not developed any endorsements to use with this coverage form.

UNDERWRITING CONSIDERATIONS

The wireless service provider should have successfully engaged in this type of business for at least five years. This ensures that it has likely survived some business cycles and has learned how to manage this unique and potentially difficult operation. It also usually means that the provider is financially solvent and able to continue to survive as business conditions change over time.

Covered property is not restricted to specific locations and is literally covered anywhere in the world. As a result, the biggest issue is developing a profile and description of how the equipment is normally used and where it is usually kept.

This coverage is difficult to underwrite as defined in normal terms because of the lack of control over the covered property. The insurance company does not have any control over where the property is located. Because of this, underwriting instead focuses on ownership and experience of the wireless service provider, loss experience for this line of business, and the general characteristics of the customers who purchase the merchandise, to the extent that such information is available.

Previous loss experience in this line is an excellent source of information to evaluate and use to determine future loss activity. This measure assumes that the ownership and management has been reasonably stable over time, changes in operations are minor, and the same general type of equipment has been handled throughout the period.

The type of equipment and accessories also affects the underwriting process. This type of property depreciates or loses value quickly and it is more damageable and susceptible to electrical disturbances and other less frequent sources of loss. This type of property is also attractive from a theft standpoint and can be easily transported and disposed of on the black market.

Exposures for this property in transit are significant because coverage applies to this property on a worldwide basis, regardless of the type of transportation. This property is susceptible to breakage, theft, and other types of damage that must be evaluated and possible loss prevention measures considered.

It is important to anticipate the types of losses that can occur to this equipment and to encourage reasonable steps be taken to prevent them from happening.