This article explores the general rules and conditions applying to commercial inland marine coverage under the simplified language program. Any variations in these rules and conditions as they pertain to the separate inland marine classes are noted in the individual coverage form discussions in this section, which discuss the most recent versions of the ISO commercial inland marine forms.

Topics covered:

General information

General rules

Conditions

Loss conditions

General conditions

Declarations page

 General Information

 Twelve individual classes constitute the current inland marine division of the ISO commercial lines manual: accounts receivable, camera and musical instrument dealers, commercial articles, equipment dealers, film, floor plan, jewelers block, mail, physicians and surgeons, signs, theatrical property, and valuable papers. All the simplified language inland marine coverage forms contemplate open perils coverage and all but three (film, floor plan, and mail) are nonreporting forms. Rating information for inland marine coverage forms contemplates the presence of a deductible for the coverage.

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 General Rules

 The general rules for writing inland marine coverage (found in division eight, section I of the commercial lines manual) include the common general rules (defining such items as policy term, cancellations, and return premium) applicable to all lines of commercial insurance. Other inland marine general rules are excerpted from the old inland marine program; for example, one former rule is modified to state that no inland marine coverage parts may be issued as master policies where certificates of insurance are attached extending coverage to other unrelated entities. Previously, the rules for some individual inland marine classes allowed such a format.

 One rule dictates that common policy conditions form IL 00 17 11 98 and commercial inland marine conditions form CM 00 01 09 04 be attached to all inland marine policies. Additionally, the general rules for inland marine coverage stipulate use of resident agent countersignature endorsement IL 09 17 11 85 in states where such an endorsement is mandated. Still another rule permits amendment of the basis of valuation (as found on CM 00 01, inland marine conditions or as modified on the inland marine coverage forms themselves) as long as both the insured and insurer are agreeable; this permits an insured to negotiate replacement cost coverage on a physicians and surgeons form, for instance. Finally, rule 24 dictates that endorsement IL 09 35 07 02, Exclusion Of Certain Computer-Related Losses, be attached to all inland marine policies.

 Conditions

 Under the previous inland marine program, policy conditions were supplied in one of two ways. On some coverage forms—specifically, accounts receivable, film, floor plan, jewelers block, mail, and valuable papers—conditions were self-contained. All other inland marine forms had to be attached to a scheduled property floater (CM 00 01) that listed the applicable conditions.

 In contrast to this approach, inland marine conditions now appear separately on two forms, as mentioned above (note that there may also be applicable additional conditions found on the individual inland marine coverage forms). The common policy conditions are contained on IL 00 17. These are general conditions that apply to all the commercial lines programs and they pertain to cancellation, policy changes, examination of books and records, inspection and surveys, premiums, and transfer of the insured's rights and duties. For more information on IL 00 17—Common Policy Conditions.

 The second set of conditions, commercial inland marine conditions (CM 00 01) is divided between ten loss conditions and six general conditions, discussed in the next section.

 Loss Conditions

 A.Abandonment

There can be no abandonment of any property to us.

Analysis

The insured may not simply abandon damaged property to the insurance company. For whatever reason an insured may want to abandon damaged property, the insurer has agreed only to pay for loss to covered property and does not seek possession of the property itself.

 B.Appraisal

If we and you disagree on the value of the property or the amount of loss, either may make written demand for an appraisal of the loss. In this event, each party will select a competent and impartial appraiser. The two appraisers will select an umpire. If they cannot agree, either may request that selection be made by a judge of a court having jurisdiction. The appraisers will state separately the value of the property and the amount of loss. If they fail to agree, they will submit their differences to the umpire. A decision agreed to by any two will be binding. Each party will:

 1.Pay its chosen appraiser; and

2.Bear the other expenses of the appraisal and umpire equally.

If there is an appraisal, we will still retain our right to deny the claim.

Analysis

 The condition regarding appraisal provides that if either the insurance company or the insured submits a written demand for an appraisal after a loss, each will choose and pay for an appraiser. No time constraints are set. In the event the appraisers fail to agree on both the value of the property and the amount of loss, the issue is given to an umpire, and when an agreement is reached by any two of these parties (among the appraisers and umpire), the decision stands.

 Any expenses beyond the cost of each party's appraiser are divided equally between the insurance company and the insured.

 It is stated within the provision that the insurance company may still deny a claim despite the fact an appraisal has been done. The purpose of the statement may be to avoid a legal argument that the insurer's participation in the appraisal carries an implied agreement on the part of the insurer to pay and prevents denial of coverage regardless of the facts.