Inland Marine and Builders Risk Insurance Review

Comprehensive vocabulary terms and definitions regarding Inland Marine, Builders Risk, and Installation Floater insurance policies based on lecture materials.

Inland Marine Insurance

Covers property that is not in a permanent destination and items that have elements of mobility or aid mobility.

AAIS (American Association of Insurance Services)

The originator of Inland Marine forms.

Bailment

An exchange of services involving a temporary transfer of property, such as at a dry cleaner.

Bailor

The owner of the product being insured in a bailment situation.

Bailee

The person or entity who accepts the product in a bailment agreement.

Legal Liability Basis

A coverage option where insurance applies only if the Bailee is found legally liable by an authoritative entity.

Direct Damage Basis

A coverage option where insurance applies if a covered cause of loss occurs, regardless of whether the Bailee is legally liable.

Processor Floater

Covers processing operations performed by a bailee that would typically be excluded from a standard building policy.

Geographic Scope (Inland Marine)

Primary coverage areas include the United States, Puerto Rico, and Canada.

Debris Removal Sub-limit

$\text{25}\%$ of the amount paid for direct physical loss, with an additional $\$5,000$ available if costs exceed that limit.

Pollutant Cleanup & Removal (Inland Marine)

Covers expenses to extract pollutants from land or water after a covered peril, with a limit of $\$10,000$.

Open Perils

The standard Inland Marine writing method where direct physical loss is covered unless a specific exclusion applies.

Voluntary Parting

An exclusion where property is given to the wrong entity rather than being forcefully taken.

ACV (Actual Cash Value)

Value of covered property based on its cash value at the time of loss.

Pair or Set Clause

Provides payment to replace a specific part of a set if property that comes in a pair or set is lost or damaged.

Completed Value Basis

A Builders Risk premium calculation method based on the total value of the property.

Reporting Form Basis

A Builders Risk method covering multiple projects with a deposit premium adjusted based on values reported during the term.

Innocent Insured Endorsement

Ensures that fraud by one named insured does not void the insurance contract for others.

Jobsite (Builders Risk)

Any location where a project is in the process of constructing buildings or structures.

Emergency Removal

Applies when the insured moves property to protect it from a covered peril; provides all-risk coverage for $10$ days and up to $\$10,000$ in expenses.

Expediting Expenses

Covers additional expenses like labor and transportation to get a project back on track after a loss, with a $\$10,000$ limit.

Ordinance or Law Coverage

Pays the value of the undamaged portion of a building that must be demolished to comply with current codes after a covered loss.

Sewer Backup (Builders Risk)

Covers loss from waterborne material discharged through drains or sumps with a $\$10,000$ limit.

Replacement Cost (Builders Risk)

Value based on the reasonable cost of materials needed to replace property without deduction for depreciation.

Coinsurance Requirement (Builders Risk)

Requires the limit to be $\text{100}\%$ of the completed value of the covered building.

Soft Costs

Additional expenses resulting from a delay in completion, such as interest payments, realty taxes, and advertising fees.

Interruption by Civil Authority

Applies for $2$ consecutive weeks when an order results from direct damage to property away from the job site.

Installation Floater

Designed for specialized contractors (like HVAC) to cover materials they are installing, constructing, or rigging.

Cold Testing

Checking component parts of equipment under dry run conditions.

Commissioning

Operating equipment for testing or benchmarking under production conditions.