Limits of insurance

Deductible

Additional conditions

Definitions

Coverage

Through the use of IH 00 72, the insurer promises to pay those sums that the named insured becomes legally obligated to pay for loss to covered property caused by a covered cause of loss. Note that the form provides liability coverage for "you," the named insured, as opposed to "the insured," a generalized term that the CGL form uses in its insuring agreement.

The insurer will pay, if the named insured becomes legally obligated to pay, for a loss to covered property. Covered property is defined in the policy as property of others described in the declarations that the named insured has accepted for transportation as a common or contract motor carrier under the named insured's tariff and bill of lading or shipping receipt issued by the named insured. In other words, the covered property has to be described in the declarations in order to be covered for loss, although omnibus terms can be used to describe the property. For example, the covered property can be described as 25,000 cartons of 60 Watt light bulbs as opposed to a specific description of each light bulb.

IH 00 72 covers the property while in the custody of the named insured as the carrier or in the custody of connecting carriers until the property is delivered to its destination. Or, the property is covered when loaded or unloaded at a facility (terminal, warehouse, or other storage area) for up to 72 hours (excluding Sundays and holidays). Note, however, that this latter limitation does not apply to property at terminals whose locations are specified or property at unspecified terminals if a limit of insurance for those coverages is shown in the declarations.

If the property is not delivered, the form covers the return of the property to the named insured.

There are twelve categories of property not covered under the terms of IH 00 72. These items include:

1. accounts, bills, currency, deeds, evidences of debt, money, notes, or securities
2. bullion, gold, or other precious metals, jewelry, watches, precious or semiprecious stones;
3. furs or garments trimmed with fur;
4. coins or stamps;
5. live animals;
6. the vehicle carrying the property;
7. intermodal containers, unless included in the value of the shipment;
8. property while waterborne, although the policy does cover property while aboard vessels on inland waterways when the waterborne transportation is incidental to the land portion of the journey;
9. import shipments until discharged from the import conveyance or until the ocean marine insurance ceases, whichever occurs last;
10. export shipments after placed on the outbound conveyance or when ocean marine insurance applies to the shipment, whichever occurs first;
11. works of art unless described in the declarations;
12. contraband, or property in the course of illegal transportation or trade.

This property needs to be insured under specialty type policies or, in the case of contraband, cannot be insured.

IH 00 72 applies to loss caused by a covered cause of loss. As with other commercial inland marine policies, IH 00 72 is an open perils policy, that is, covered causes of loss means any direct physical loss or damage for which the named insured is liable, except for those causes of loss listed in the exclusions section of the policy.

IH 00 72 also covers the named insured's earned freight charges that the named insured is unable to collect arising from a loss covered by IH 00 72. The most the insurer will pay in any one occurrence is $2,500. This amount is in addition to the limits of insurance shown in the declarations.

Exclusions

There are several exclusions that apply under three main headings.

In the first set of exclusions, IH 00 72 states that the insurance does not apply to the named insured's liability for loss or damage caused directly or indirectly by any of the exclusions. Such loss or damage is excluded regardless of any other cause or event that contributes concurrently or in any sequence to the loss or damage (anti-concurrent causation clause). The exclusions in this category include governmental action, nuclear hazard, and war and military action.

Seizure or destruction of property by order of governmental authority is not a covered cause of loss. However, the insurer will pay for loss or damage caused by or resulting from acts of destruction ordered by governmental authority and taken at the time of a fire to prevent its spread, if the fire would be covered under this coverage.

Loss or damage caused by nuclear reaction or radiation, or radioactive contamination, however caused, is not covered. Of course, if a resulting fire causes direct loss or damage, IH 00 72 will pay for that fire loss.

War damage and any type of military action damage are excluded.

These exclusions apply whether or not the loss event results in widespread damage or affects a substantial area.

The next set of exclusions applies to the named insured's liability for loss or damage caused by or resulting from the listed causes of loss. There are seven exclusions in this set.

Loss or damage caused by improper packing or stowage or rough handling is excluded.

Loss or damage caused by delay, loss of use, loss of market or any other indirect loss is excluded.

Loss or damage caused by breakdown of refrigeration equipment is not covered. But, IH 00 72 will pay for such loss caused directly by fire, lightning, explosion, windstorm, vandalism, aircraft, rioters, strikers, theft or attempted theft, or by accident to the vehicle carrying the property.

Dishonest or criminal acts committed by the named insured or any partners, employees, directors, trustees, or authorized representatives are not considered covered causes of loss. This exclusion does not apply to covered property that is entrusted to others who are carriers for hire or to acts of destruction by employees of the named insured.

Voluntary parting with any property if induced to do so by any fraudulent scheme, trick, device, or false pretense is not a covered cause of loss; this is the false pretense exclusion.

Loss or damage caused by unauthorized instructions to transfer property to any person or to any place is not covered by IH 00 72.

And, if an insured neglects to use all reasonable means to save and preserve property from further damage at and after the time of loss, that damage is not going to be covered by IH 00 72.

The final set of exclusions note that if loss or damage by a covered cause of loss results from the listed causes of loss, the insurer will pay for loss or damage caused by the covered cause of loss. The causes of loss excluded in this category are: any quality in the property that causes it to damage or destroy itself; gradual deterioration, corrosion, rust; dampness, extremes of temperatures; and insects, vermin, or rodents.

Limits of Insurance

The most the insurer will pay for loss or damage in any one occurrence is the applicable limit of insurance shown in the declarations.

Deductible

The deductible is shown in the declarations and it applies on an any one occurrence basis.

Additional Conditions

The valuation general condition in the commercial inland marine conditions is replaced in IH 00 72 by the following information.

The value of property will be the least of the following amounts: the cost of reasonably restoring that property to its condition immediately before loss; the cost of replacing that property with substantially identical property; the value stated in the bill of lading or shipping receipt; or the limitation state in the tariff.

In the event of loss, the value of property will be determined as of the time of loss or damage.

IH 00 72 also adds a coverage territory condition; this applies in addition to the commercial inland marine conditions and the common policy conditions. Property is covered wherever located within the United States, Puerto Rico, and Canada. Also, IH 00 72 covers property being shipped by air within and between points in the U.S., Puerto Rico, and Canada.

Definitions

IH 00 72 defines one term: accident.

An accident means the upset or overturn of the transporting vehicle, or the violent and accidental contact of the transporting vehicle with another vehicle or object. However, this latter portion of the definition does not include contact with the roadbed or curbing, rails or ties of street, steam or electric railroad, or any stationary object while backing for loading or unloading purposes.