1. GENERAL DESCRIPTION

American Association of Insurance Services (AAIS) is a national advisory rating organization and statistical agent that provides loss costs, rules, forms, and statistical reporting to property/casualty insurers nationwide. Among the policies offered by AAIS is Riggers' Coverage, IM 7150 06 08. The form provides special perils coverage for property of others contractors agree to lift or move. The coverage is not restricted to a specific job site or location. The property must be in the insured's care, custody, or control for the purpose of rigging or work done in connection with lifting the property.

2. UNDERWRITING GUIDELINES

The following information must be included for underwriting riggers liability coverage: description of the rigging work that has been performed , which may include jobs performed during the past twelve months; rigging receipts; operating territory; average and maximum values for rigging jobs; number of jobs performed annually; and the maximum height for any rigging job.

Hazards associated with this risk include dropping covered property, the covered property colliding with another object, human errors in operating equipment.

3. INSURING AGREEMENT

In exchange for payment of the premium, the insurer agrees to provide the coverages described. The coverage is also subject to the Schedule of Coverages.

4. PROPERTY COVERED

The form covers property of others in the named insured's care, custody, or control for direct physical loss caused by a covered peril and for which the named insured has been hired for rigging. The property must be at a location for the purpose of rigging, being assembled or dismantled in connection with a rigging project, or operations incidental to a rigging, assembling, or dismantling project.

5. PROPERTY NOT COVERED

The following types of property are not covered:

a. Airborne Property. This includes property while being moved or lifted by a helicopter but does not apply to property in transit on a regularly scheduled airline flight.

b. Buildings, Structures, and Land. However, property covered in connection any part of the named insured's rigging, assembling, or dismantling projects is covered.

c. Contraband.

d. Money and Securities. These include accounts, bills, currency, food stamps, or other evidence of debt, lottery tickets not held for sale, money, notes, or securities.

e. Service Fee. Property the named insured accepts without charging a rigging or a service fee is not covered.

f. Trees, Shrubs, and Plants. Lawns are also not covered.

g. Waterborne Property. Property while in transit in the custody of a carrier for hire is covered.

6. COVERAGE EXTENSIONS

Limits for coverage extensions are part of the limit for covered property and are not in addition to it.

a. Debris Removal. The cost to remove debris of covered property caused by a covered peril is covered, up to 25 percent of the amount paid for the direct physical loss, and up to an additional $5,000. Expenses to extract pollutants from land or water or to remove, restore, or replace polluted land or water are not covered. Loss must be reported within 180 days of the direct physical loss.

b. Defense Costs. The insurer has the option of defending any suit brought against the name insured or to investigate or settle claims or suits. A defense is not owed once the limit of insurance has been paid as the result of a judgment or written settlement. The insurer will pay the following expenses: expenses the insurer incurs in investigating and defending the suit; up to $250 day in the insured's lost salary for time spent away from work at the insurer's request; expenses the insured incurs at the insurer's request; all costs the insured is required to pay as a result of any suit the insurer defends; interest that accrues after entry of a judgment until the insurer pays its part of the judgment; interest awarded against the insured before the entry of the judgment; cost of bonds for the release of attachments. No deductible applies to this coverage extension.

7. SUPPLEMENTAL COVERAGES

Limits for supplemental coverages are in addition to the limit for covered property unless otherwise indicated. The limits may be changed on the schedule of coverages.

a. Earned Coverages. Rigging charges—up to $2,500—that are owed but uncollectible as a result of a covered loss to covered property are covered.

b. Pollutant Cleanup and Removal. Up to $10,000 over a twelve-month period is available to extract pollutants from land or water if the cause of the pollutant's release is a covered peril and the loss is reported within 180 days. The cost of testing, evaluating, observing, or recording the existence, level, or effects of pollutants is not covered; the cost of testing that is necessary for the extraction of pollutants from land or water is covered.

c. Property in Storage. Direct physical loss by a covered peril to property in storage awaiting rigging is covered up to $10,000.

d. Transit. Direct physical loss by a covered peril to property in transit to a location for rigging is covered up to $10,000.

8. PERILS COVERED

Coverage is on a special causes of loss basis.

9. PERILS EXCLUDED

The following exclusions apply:

a. Civil Authority. While losses caused by order of civil authority are not covered, the policy covers loss resulting from acts of destruction by civil authority to prevent the spread of fire.

b. Nuclear Hazard. Direct loss by fire that results from the nuclear hazard is covered.

c. Ordinance or Law. Loss or increased cost caused by enforcement of a code, ordinance, or law regulating the use, construction, or repair of a building or structure or that requires the demolition of a building or structure is not covered.

d. War and Military Action. War, warlike actions, insurrections, rebellions, revolutions, or unlawful seizure of power losses are not covered. War involving nuclear reaction or radiation or radioactive contamination falls under this exclusion and not the Nuclear Hazard exclusion.

e. Contamination or Deterioration. Includes corrosion, decay, fungus, mildew, mold, rot, rust, or any quality, fault, or weakness in covered property that causes it to destroy itself.

f. Criminal, Fraudulent, Dishonest, or Illegal Acts. Applies to the named insured and various others in the organization but not to acts of destruction by the named insured's employees or covered property in the custody of a carrier for hire.

g. Defects, Errors, or Omissions. Loss caused by an act, defect, error, or omission relating to the design, specifications, construction, materials, workmanship, planning, zoning, development, siting, surveying, grading, compaction, maintenance, installation, renovation, remodeling, or repair is excluded.

h. Electrical Currents. Ensuing fires are covered.

i. Explosion, Rupture, or Bursting. The exclusion applies only to loss or damage to steam boilers, steam or gas turbines, steam pipes, or steam engines in which the loss occurred.

j. Loss of Use. Delay and loss of market are included here.

k. Mechanical Breakdown. When mechanical breakdown or rupturing or bursting of moving parts of machinery caused by centrifugal force results in a covered peril, damage from the covered peril is covered.

l. Missing Property. If the only proof of loss is unexplained or mysterious disappearance or inventory shortage or any other loss where there is no physical evidence, the loss of missing property is not covered; the exclusion does not apply to property in the custody of a carrier for hire.

m. Pollutants. The release, discharge, seepage, migration, dispersal, or escape of pollutants is excluded unless caused by a specified peril or as provided in the Pollutant Cleanup and Removal supplemental coverage, as well as resulting losses caused by specified perils.

n. Rain, Snow, Ice, or Sleet. Losses in the open, not part of the building or structure, are not covered. The exclusion does not apply to property in the custody of a carrier for hire.

o. Temperature/Humidity. Loss caused by dryness, dampness, humidity, or changes in temperature are not covered.

p. Testing. Losses caused by start-up, performance, stress, pressure, overload, or other testing of covered property are not covered.

q. Voluntary Parting. Fraudulent scheme, trick , or false pretense that results in voluntary party with title to or possession of property is not covered.

10. WHAT MUST BE DONE IN CASE OF LOSS

a. Notice. The insurer must provide prompt notice to the insurer of the loss and notify the police when a criminal act is involved.

b. Protect Covered Property. Insured must take reasonable steps to protect covered property at and after the loss from further damage. The insurer will pay reasonable costs incurred for emergency measures or necessary repairs to do so.

c. Proof of Loss. A signed, sworn proof of loss must be submitted within sixty days after the insurer's request.

d. Examination. The named insured must submit to an examination under oath as often as the insurer reasonably requests.

e. Records. As often as the insurer reasonably requests, the named insured must produce records, including tax returns and cancelled checks.

f. Damaged Property. The named insured must exhibit the damaged and undamaged property and allow the insurer to inspect and take samples of the damaged property as often as reasonably requested to do so.

g. Volunteer Payments. The insurer must not voluntarily assume obligations, make payments, offer or pay rewards, or incur other expenses other than protection of property costs.

h. Abandonment. The named insured may not abandon its property to the insurer unless the insurer has provided written consent.

i. Cooperation. The named insured must perform all acts required by the policy.

11. VALUATION

The value of the property is based on its actual cash value at the time of loss, including a deduction for depreciation. The value of a lost or damaged article that is part of a pair or set is based on a proportion of the entire set's value but is not considered a total loss to the pair or set. If a part of an item consisting of several parts is lost or damaged, value is based only on the lost or damaged part.

12. HOW MUCH WE PAY

The form contains a catastrophe limit, which is indicated in the schedule of coverages. The insurer will pay no more than the catastrophe limit, regardless if a loss involves more than one rigging project.

13. REPORTING CONDITIONS

The named insured must report to the insured the total receipts—collected and uncollected—earned from its rigging projects during the reporting period indicated in the schedule of coverages. The report must be submitted within thirty days of the end of the reporting period. Failure to submit reports limits the most the insurer is required to pay to 90 percent of the limit. If reported values are less than the full value, the insurer will not pay more than the total receipts reported divided by the total receipts actually earned.

14. OTHER CONDITIONS

a. Appraisal. If the insured and insurer do not agree on the amount of the loss or the value of the covered property, either party may demand an appraisal. Each party selects an appraiser and must notify the other party of the appraiser's identity within twenty days of the demand. The appraisers select an umpire within fifteen days, and if they cannot agree on an umpire in that time period, a judge may be asked to make the selection. The amount agreed upon by the appraisers will be the amount of the loss; if they cannot agree, any agreement of two of three among the appraisers and the umpire will be the amount of the loss. Each party pays for its own appraiser; other costs are paid equally by both parties.

b. Benefit to Others. The insurance cannot benefit anyone having custody of the named insured's property.

c. Conformity with Statute. If a policy provision is contradicted by any applicable law, it is amended to conform with the law.

d. Estates. If the insured is an individual and dies, the policy covers the person who has custody of the named insured's property or the named insured's legal representative.

e. Misrepresentation, Concealment, or Fraud. Willful concealment or misrepresentation of material facts or circumstances that relate to the insurance or the named insured's interest will result in voiding coverage. Likewise, fraud or false swearing with regards to the insurance will void coverage.

f. Recoveries. If the insurer pays for the loss, and the property is subsequently recovered, the insured must notify the insurer promptly of the recovery and vice-versa. Recovery expenses are reimbursed first. The insured may keep the property but must refund the insurer the amount of the claim paid; if the amount recovered is less than the agreed loss due to a deductible, recovery will be pro rated.

g. Restoration of Limits. A paid loss does not does not reduce the applicable limits.

h. Subrogation. If the insurer pays for a loss, the named insured may be required to assign its right of recovery to the insurer.

i. Suit against Us. A suit must be filed within two years after the named insured first has knowledge of the loss.

j. Territorial Limits. The coverage territory is the U.S., its territories and possessions, Puerto Rico, and Canada.

k. Carriers for Hire. The insured may accept shipping receipts or bills of lading from carriers for hire that limit their liability to less than actual cash value of the covered property.

15. ADDITIONAL COVERAGE LIMITATIONS

Coverage ends when one of the following first occurs: the policy is cancelled or expires, the owner accepts the covered property, the named insured no longer has an insurable interest in the property, the named insurer abandons a project with no intent to complete it, the project has been completed for more than thirty days, or the covered property has been put to its intended use.

16. DEFINITIONS

The policy lists nine defined terms:

a. Limit. The amount of coverage available.

b. Pollutant. A solid, liquid, gaseous, thermal, or radioactive irritant or contaminant, as well as electrical or magnetic emissions, and sound emissions.

c. Rigging. The policy defines rigging as “rigging.” Moving, erecting, hoisting, and lowering are included.

d. Schedule of Coverages. Describes all pages with this label pertaining to this coverage, and declarations or supplemental declarations pertaining to this coverage.

e. Sinkhole Collapse. Sudden settlement or collapse of earth supporting the covered property into subterranean voids but not the value of land or the cost of filling.

f. Specified Perils. The specified perils are aircraft, civil commotion, explosion, falling objects, fire, hail, leakage from fire extinguishing equipment, lightning, riot, sinkhole collapse, smoke, sonic boom, vandalism, windstorm, and weight of ice, snow, or sleet.

g. Suit. Judicial proceedings set up to determine liability and damages for losses.

h. Terms. All applicable provisions, exclusions, conditions, limitations, and definitions.

i. Volcanic Action. Airborne volcanic blast or shock waves; ash, dust, or particulate matter; lava flow. The cost to remove ash, dust, or particulate matter that does not cause direct physical loss to covered property is not included.