12.0 Commercial Marine & Aviation Insurance
Learning Objectives
12.1 Marine Insurance Foundations
Historically, Ocean Marine insurers provided most of the transportation insurance used in the United States. At that time, many major cities were located along coastlines or major rivers, and goods were commonly transported by ocean or inland waterways. The development of railroads, motor trucks, and airplanes created new methods of transporting property over land and through the air. These changes also created a need for insurance coverage designed to protect goods while in transit by these newer forms of transportation.
12.2 Commercial Inland Marine Insurance
Although it is classified as a type of Marine insurance, Inland Marine insurance generally covers property located on land, particularly when the property is being transported or is temporarily away from the insured’s premises. To qualify for Inland Marine coverage, the property must usually involve an element of transportation under the Nationwide Marine Definition or be in the care, custody, or control of a bailee. Inland Marine coverage may also apply to property kept at a fixed location, but only when the property is directly connected to the transportation or communication industries, such as bridges, tunnels, pipelines, docks, or communication towers.
12.3 Commercial Inland Marine Forms and Floaters
Movable property is often described as floating property, and the Inland Marine forms used to insure it are commonly called floaters. Commercial property floaters provide coverage for movable property used in connection with a business, profession, or occupation.
12.4 Inland Marine Transportation Coverages
Common Carrier Cargo Liability
12.5 Ocean Marine Insurance
Ocean Marine insurance is the oldest form of property insurance. It covers goods and merchandise, including imports and exports, while they are transported by vessels across domestic or international waters. Coverage may also extend to inland or air transportation connected with the overall shipment. Unlike modern Inland Marine coverage, Ocean Marine insurance may also insure the vessel used to transport the cargo.
12.6 Aviation Insurances
Aviation insurance is a specialized form of coverage offered by insurers that underwrite aircraft-related risks. It may provide physical damage coverage for the aircraft itself, since aircraft exposures are generally excluded under standard commercial insurance policies. Property or merchandise transported by air is not covered under the aircraft policy and requires separate Air Cargo insurance.
Recap of Chapter Twelve
The Nationwide Marine Definition provides guidelines for classifying Inland Marine, Ocean Marine, and transportation-related insurance exposures. It organizes eligible property and risks into six classifications. Imports and exports fall within the Ocean Marine classification because Ocean Marine insurance covers goods and merchandise transported by vessels across domestic or international waters.