Commercial Inland Marine Insurance & Farm Insurance & Equipment Breakdown

Question 1

Eligible Marine Risk

Answer 1

Imports
Exports
Personal Floaters
Domestic Shipments
Instrumentalities of transportation or communication (bridges, pipelines & tv towers)
Commercial property floater risks (bailee forms, equipment forms & business floaters)

Question 2

Commercial Inland Marine Insurance Common Conditions

Answer 2

Duties in the event of a loss
 Notify the policy if a law may have been broken
 Give the insurer prompt notice of the loss and describe the property involved
 Give the insurer a description of how, when and where the loss occurred asap
 Take reasonable steps to protect the property from further damage, set damaged
property aside if feasible, and keep a record of expenses related to the loss
 Make no statement that assumes any obligation or admits any liability w/out the
insurer’s consent. Usually revolved around cargo
 Permit the insurer to inspect the property and records proving loss
 Submit under oath to questioning if requested
 Send a signed, sworn statement of loss w/in 60 days after it is requested by the insurer
 Promptly send the insurer any legal papers or notices concerning the loss
 Cooperate with the investigation or settlement of the claim

The Other Insurance condition states that if the insured has other insurance that is written on the same basis the commercial inland marine form pays on a pro rata basis

Question 3

Farm Dwellings, Apparent Structures, and Household Personal Property Coverage Forms A, B, C & D

Answer 3

Coverage A - dwellings
Coverage B - other private structures apparent to dwellings
Coverage C - household personal property
Coverage D - loss of use, includes coverage for additional living expenses and fair rental value

Question 4

Farm Personal Property Coverage Forms E, F & G

Answer 4

Coverage E – scheduled farm personal property – allows a choice of items to be specifically insured. The items can include grain, farm products, poultry, livestock, machinery, vehicles, tools and supplies incidental to the operation of a farm

Coverage F – unscheduled farm personal property – covers farm personal property on a blanket basis (not an itemized list) on or away from the insured location (ex - $1,000 for any horse, mule, or head of cattle under one year of age at time of loss)

Coverage G – other farm structures – covers barns, silos, fences, radio equipment, and other farm buildings and structures that are NOT dwellings

Question 5

Farm Property Basic Perils

Answer 5

Fire
Lightning
Internal Explosion

Question 6

Farm Property Broad Perils

Answer 6

Basic Perils
WCSHAVVER
V&MM
BIG AFFECT
Electrocution of covered livestock
Attacks on covered livestock by dogs or wild animals
Drowning of covered livestock
Accidents involving loading or unloading
Accidental shooting of covered livestock

Question 7

Farm Property Special Perils Exclusions

Answer 7

Dishonest or criminal acts
Pollutants or contaminants
Transfer of property due to unauthorized instructions
Voluntary parting with property
Failure to save and preserve property from loss

Question 8

Breakdown means the following types of direct physical loss that cause damage to covered equipment requiring the equipment’s repair or replacement:

Answer 8

Failure of pressure or vacuum equipment
Mechanical failure, including rupture or bursting caused by centrifugal force
Electrical failure, including arcing

Question 9

Equipment Breakdown Excludes

Answer 9

Malfunction, including but not limited to adjustment, alignment, calibration, cleaning, or modification
Defects, erasures, errors, limitations or viruses in computer equipment and programs, including the inability to recognize and process any date or time or provide instructions to covered equipment
Leakage at any valve, fitting, shaft seal, gland packing, joint or connection
Damage to any vacuum tube, glass tube or brush
Damage to any structure or foundation supporting the covered equipment or any of its parts
The functioning of any safety or protective device (such as one that turns off equipment to prevent further damage)
The cracking of any part of an internal combustion gas turbine exposed to the products of combustion

Question 10

Equipment Breakdown Covered Property

Answer 10

o Equipment built to operate under internal pressure or vacuum other than the weight of contents
o Electrical or mechanical equipment that is used in the generation, transmission, or utilization of energy
o Communication equipment and computer equipment
o Any equipment that is owned by a public or private utility and used solely to supply utility services to the insured’s premises

Question 11

Equipment Breakdown Coverages - Expediting Expenses

Answer 11

Expediting expenses – will pay extra costs necessarily incurred by the insured to make temporary repairs and to expedite the permanent repairs or replacement of the damaged property

Question 12

Equipment Breakdown Conditions

Answer 12

Normal property conditions – abandonment, appraisal, other insurance, etc.
Defense costs included
Suspension of coverage – the insurer may immediately suspend the insurance against loss by breakdown for specific equipment whenever that equipment is found to be in, or exposed to, a dangerous condition. Advanced notice is NOT required, but the insurer must mail or deliver written notice of the suspension

Question 13

Equipment Breakdown Coverage - Property Damage

Answer 13

applies to direct damage to covered property located at a premises described in the declarations; damage must be caused by a breakdown of covered equipment

Question 14

Equipment Breakdown Coverage - Business Income &/or Extra Expenses

Answer 14

damage must be caused by a breakdown of covered equipment

Question 15

Equipment Breakdown Coverage - Spoilage Damage

Answer 15

Spoilage damage to raw materials, property in process, or finished products may be covered if these items are in storage or in the course of being manufactured at the time of loss, the insured owns or is legally liable for these items under contract, and the spoilage is due to the lack or excess of power, light, heat, steam, or refrigeration

Question 16

Equipment Breakdown Coverage - Utility Interruption

Answer 16

is an extended coverage to a business income, extra expense, or spoilage damage. Losses that result from the interruption of utility services and are the direct result of breakdown to the covered equipment are covered once a waiting period is met

Question 17

Equipment Breakdown Coverage - Brands and Labels

Answer 17

states that if covered branded or labeled merchandise is damaged by a breakdown, the insurer will take all or any part of it as salvage and the insured an agreed upon or appraised value