Grow Your Expertise in Inland Marine and Other Important Property Coverage Lines

Commercial Output Policies

A commercial output policy is a single policy that provides a combination of commercial property and commercial inland marine coverages that are needed by many business firms. Today's commercial output policy is the successor to the manufacturers output policy.

Difference in Conditions Policies

A difference-in-conditions (DIC) policy is an all risks property policy that is used primarily to provide coverage for floods and earthquakes. Like other all risks policies, DICs provide coverage for all causes of loss except those that are specifically excluded. But, DICs differ from other all risks commercial property policies in that they exclude the causes of loss for which coverage is provided in a standard commercial property policy—fire, explosion, windstorm, etc. The intent is for the DIC policy to cover only the difference between the covered causes of loss under the commercial property policy and the covered causes of loss under the DIC policy—hence the name.

Flood Insurance

Flood loss is excluded from coverage under a standard commercial property policy, so flood coverage usually must be separately arranged, especially if the exposure is significant. Possible sources of flood coverage (in addition to the DIC policy option) include a flood insurance policy from the National Flood Insurance Program, a private flood insurance policy written on ISO commercial flood program forms, and a flood coverage endorsement added to a commercial property policy.

Inland Marine Coverages

The term "inland marine" may suggest exotic insurance coverages of no concern to the average business—but that is not the case! For the most part, inland marine coverage is just property insurance for property in transit over land and other property loss exposures that cannot be conveniently or reasonably confined to a fixed location.

Inland marine insurance developed in response to the insurance industry practices of an earlier era, at a time when what we now refer to as a property insurance policy was called a "fire insurance policy." It provided coverage only at fixed locations specified in the policy and could only be issued by a fire insurer. Property in transit had to be insured under another type of policy, which could only be issued by a marine insurer. Marine policies had long been used for insuring property in transit over the world's oceans. The development of transportation of goods on railroads led insurers in the United States to create a new type of marine policy for insuring property in transit over land: inland marine insurance. Over time, inland marine insurance expanded beyond covering just property in transit to include insurance for certain movable property, instrumentalities of transportation (such as bridges, roads, and piers), instrumentalities of communication (such as television and radio towers), and legal liability coverage for bailees.

Inland marine coverage forms as a group are generally broader than property coverage forms. The relative freedom from rate and form regulation that inland marine underwriters enjoy can be a real plus. Also, because of the nature of the coverages they typically underwrite, inland marine underwriters may have both a wider latitude and a more flexible approach in determining coverage terms than their property insurance counterparts.

There are a number of inland marine coverage lines. There are standard forms for a few of them, such as valuable papers and accounts receivable insurance. However, there is no such thing as a standard form for the most important inland marine coverages, including builders risk insurance and the various forms of transportation coverage.

Make sure to leverage IRMI's commercial property resources to make yourself a trusted adviser for your clients or your organization in each of these key coverages and programs.