Differences from ISO

Summary: Marine insurance is the oldest line of insurance in the world. It also is the basis for one of the oldest rating bureaus in the country, American Association of Insurance Services (AAIS). The Mutual Marine Conference (MMC) was established in 1936. In 1947 the MMC merged with the Mutual Aircraft Conference to form the Transportation Insurance Rating Bureau (TIRB). In 1975, AAIS was incorporated as the successor organization to TIRB, adding personal and commercial lines. AAIS is unique among rating bureaus, in that it remains a non-profit association owned by its members. The commercial inland marine program of the American Association of Insurance Services (AAIS) contains twelve filed classes: accounts receivable; camera and musical instrument dealers; floor plan merchandise; jewelry dealers; mobile equipment dealers; musical instruments; negative film; photographic equipment; physicians and dentists equipment; signs coverage; theatrical property; and valuable papers and records. This article offers an analysis of these coverages.

Topics Covered: Introduction Accounts receivable Camera and musical instrument dealers Floor plan merchandise Jewelry dealers coverage Mobile equipment dealers Musical instruments Negative film Photographic equipment Physicians and dentists equipment Sign coverage Theatrical property Valuable papers and records

Introduction

A monoline AAIS commercial inland marine policy contains a declarations page; a common policy conditions form (CL 100); the appropriate inland marine coverage form; any applicable coverage endorsements; and the appropriate state amendatory endorsement. The common policy conditions form provides the standard provisions regarding policy assignment, cancellation, changes, inspections, and examination of the insured's books and record. The inland marine coverage form describes the coverage for the particular line chosen.

When an inland marine coverage form is added to other coverage parts (property, liability, or crime, for instance), the reader is refereed to the policy writing instructions that apply to the other policy forms.

Although each line of coverage contains unique rating provisions, AAIS does publish individual risk premium modifications that may be applied to all risks. These include modifications to the base rate for the following characteristics:

1.Location—accessibility and environment.

2.Premises—general condition, care, and suitability for operations conducted.

3.Equipment—types, condition, and care taken on premises or job site.

4.Employees—selection, training, and stability.

5.Management—attitude toward compliance with company recommendations.

6.Dispersion or concentration of property.

7.Storage practices and control of hazards.

8.Roof anchorage and other windstorm related features.

9.Other superior or inferior structural features.

10.Obsolescence.

11.Damageability of property.

12.Protection not otherwise recognized.

The rest of this discussion highlights the filed AAIS coverage forms and some comparisons between the forms of the AAIS and the ISO commercial inland marine programs.

The term “specified perils” refers to the perils of civil commotion; explosion; falling objects; fire; hail; leakage from fire extinguishing equipment; lightning; riot; sinkhole collapse; smoke; sonic boom; vandalism; vehicles; volcanic action; water damage; weight of ice, snow, or sleet; and windstorm.

The AAIS forms contain coverage for collapse. Collapse is covered if caused by specified perils; breakage of building glass; hidden decay, unless known by the insured prior to collapse; weight of rain that collects on a roof; or the use of defective materials or methods of construction, remodeling, or renovation if the collapse occurs during the course of renovation, remodeling, or construction. If a collapse occurs after renovation, remodeling, or construction and is caused by a peril listed in the provision, collapse is covered even if defective materials or methods were used. Collapse is a sudden or unexpected falling down or caving in. Collapse does not include buildings or structures in eminent danger of collapsing or that have separated from another building or structure.

Accounts Receivable

Form: IM 1000. AAIS accounts receivable coverage may be written on either a reporting or nonreporting basis. If the insured chooses the reporting basis, it may be on either a monthly or quarterly basis. Form IM-1013, Accounts Receivable Reporting Conditions, requires values to be reported within thirty days of the end of the chosen reporting period.

Coverage: The IM 1000 covers direct physical loss to accounts receivable records on the described premises. The property may also be covered in transit or away from the described premises, by showing a limit on the schedule of coverages. The premises are described on the declarations. A physical loss to accounts receivable may result in one or more of the following monetary losses to the insured:

1.Sums the insured cannot collect from his customers;

2.Interest on a loan that the insured must take out until the insurance proceeds are collected;

3.Any collection cost above the insured's normal collection costs;

4.The reasonable cost to reconstruct the insured's record.

Under the ISO Accounts Receivable Coverage form, records are covered while within the insured's premises—with “premises” defined as the interior portion of the building at the address shown in the declarations the that the insured occupies for its business—and while in transit and temporarily off premises, but not in storage. For records away from the described premises, the AAIS form covers them whether or not they are in storage.

Both forms cover the property when it must be moved to protect it from further damage from a covered peril and require a written notice from the insured within ten days after the property is moved.

Exclusions: The AAIS Accounts Receivable form contains the following exclusions:

1.Civil authority, nuclear hazard, war and military action, acts or decisions, collapse (except as provided under the other coverage for collapse), and concealment.

2.Criminal, fraudulent, dishonest, or illegal acts, except those of carriers for hire. The form covers destruction of property by the insured's employees but not employee theft. Nor does it cover loss caused by any actions to conceal a crime. This exclusion is intended to address crimes of a financial nature such as embezzlement or fraud.

3.Electronic damage to or erasure of data, if the cause of the damage is a programming error or faulty maintenance/installation of computer equipment. Disturbances of electrical power that take place more than 100 feet from the premises are also excluded.

4.Bookkeeping, accounting, or billing errors.

5.Losses discovered by discrepancies found in the insured's books or records (through audits or inventories), but only if this is the only way to prove a loss occurred. However, such discrepancies may be used to support a claim of loss, if other evidence of loss exists.

6.Fault, defect, or error.

7.Pollutants—this exclusion was added in the 2005 edition and clarifies that only pollutants released by a specified peril are covered.

8.Loss caused by the insured's voluntary parting with covered property or unauthorized instructions to transfer property is not covered.

9.Loss of use or market and weather.

Valuation: The methods for determining accounts receivable losses (when actual losses cannot be determined by the insured) are essentially the same for both AAIS and ISO.

Nonreporting policies: The policy promises to pay the lesser of the following three amounts:

1.The total sum of accounts receivable. The insurer then subtracts the following five amounts from this amount to arrive at a total due:

a. Amounts from records not lost.

b. Amounts that can be established by other means.

c. Amounts that the insured has already collected.

d. Unearned interest and service charges.

e. An allowance for bad debts.

2.The insured's costs to reconstruct its records.

3.The limit of liability.

If the insured cannot establish the actual amount of accounts receivable lost, the policy sets out a formula to determine what will be paid. It is the average monthly accounts receivable amounts for the twelve months immediately prior to the loss. The insurer also agrees to adjust for any verifiable variance in the accounts receivable amount for the month in which the loss occurs. The payment is subject to an 80 percent coinsurance requirement. ISO's form adjusts losses in the same way.

Reporting policies: The amount of accounts receivable for the same month of the previous year is determined. A trend factor, developed using the average monthly accounts receivable for the preceding year, is applied to that amount. Adjustments are made for normal fluctuations and changes in the insured's business in the month of the loss. ISO's reporting form also uses the previous twelve months of accounts receivable.

Available endorsements: IM 10 12 specifies that the insured must duplicate at least the percentage of accounts receivable records shown in the schedule, and they must be kept for at least six months.

Losses arising from failure of any electronic data processing equipment, computer program, software, media, or data to correctly recognize, interpret, or process encoded, encrypted, or abbreviated dates or times may be covered via endorsement IM 1275.

Camera and Musical Instrument Dealers

Form: IM 1050. The AAIS camera and musical instrument dealers form covers the stock of such dealers. It may be used for dealers who are primarily manufacturers, though property is not covered while it is being manufactured. Under the ISO program, dealers who are primarily manufacturers are specifically ineligible.

Coverage: The AAIS form covers the property in one of the following four locations, when a limit appears on the declarations:

1.On the premises.

2.In transit.

3.In the custody of the insured or employees away from the premises.

4.On other premises not described in the schedule of coverages.

Coverages 3 and 4 provide an automatic amount of $10,000. Additional limits may be purchased.

AAIS also provides removal coverage for property being moved or stored to protect it from loss. The form also covers damage done to the building by thieves if the insured owns the building or is responsible for it.

Optional coverage is available for peak season periods; the coverage applies only from the first day of the peak season period to the last day, as indicated on the schedule of coverages.

The AAIS form also lists property not covered as property being manufactured; contraband; sold property; property shipped by mail (other than by registered mail); money and securities; and office supplies or fittings, molds, dies, and patterns.

Exclusions: The AAIS form excludes volcanic eruption but covers volcanic action (airborne volcanic blast or airborne shock waves, ash, soot, particulate matter, or lava flow).

The flood exclusion is similar to ISO's water exclusion, but ground water is excluded under a separate sewer backup and water below the surface exclusion.

The war exclusion defines a warlike action as action to prevent or defend against attack; insurrection includes action taken by governmental authority for prevention or defense against such action. If an act of war involves a nuclear event, the war exclusion applies in place of nuclear hazard exclusion.

The electrical current exclusion applies only to the property artificially generating the current.

Only pollutants released by a specified peril are covered.

The wear and tear exclusion does not include depreciation.

Territory: Previous editions of this form did not cover property in transit to or from Alaska, Hawaii, or Puerto Rico. That limitation does not appear in the current edition, with the territory being the United States (including territories and possessions), Canada, and Puerto Rico.

Premises protection: Protective devices must be maintained in proper working order. As with the ISO form, AAIS specifies that coverage is suspended unless such devices are in working condition and are also in operation when the business is closed.

Valuation: Under the valuation provision for films and prints, the cost of labor or materials for developing is covered. Previous editions of this form did not cover this cost.

Once an item's value is established, the form describes how much the insurer will pay in the event of a loss. Payment is subject to insurable interest, deductible, coinsurance (80 percent), insurance under more than one coverage, and insurance under more than one policy.

The final payment is the lesser of: the amount determined under valuation; the cost to repair, replace, or rebuild the property with like kind and quality; or the limit of insurance.

Records: There is no specification of length of time to maintain records regarding covered property; the ISO form requires they be maintained for three years.

Available endorsements: Endorsement IM 1263 covers the insured's business personal property, such as furniture and fixtures, patterns, and tenant's improvements.

Endorsement IM 1261 may be used to waive the coinsurance provision, or it can be amended with IM 1273.

Floor Plan Merchandise

Form: IM 1100. Floor plan merchandise coverage is written to cover dealers' merchandise that has been financed through a lending institution. It covers property in which the insured has an interest or in which the insured and a secured lender have an interest. Manufacturers and processors are not eligible. The form covers the property on premises, in transit, or at unscheduled premises. The form can be written to cover the single interest of the dealer or lending institution or the dual interests of each.

Valuation: The value of unsold property is the purchase price to the dealer including transportation charges. Under the ISO form, the value of unsold property is the smallest of the following: the cost to restore the property, the cost to replace the property with substantially identical property, or the dealer's purchase price including transportation charges.

Once an item's value is established, the form describes how much the insurer will pay in the event of a loss. Payment is subject to insurable interest, deductible, full reporting, late reports, insurance under more than one coverage, and insurance under more than one policy.

The final payment is the lesser of the amount determined under valuation; the cost to repair, replace, or rebuild the property with like kind and quality; or the limit of insurance.

Reporting: AAIS and ISO both address single interest and dual interest reporting.

Exclusions: Differences in the exclusions of the AAIS floor plan coverage from the ISO coverage are as follows:

1.The exclusion of losses due to flood or ground water does not provide an exception for subsequent losses by theft, as ISO does. On the other hand, AAIS provides coverage for subsequent loss from sprinkler leakage, which is not in ISO.

2.Insect or vermin damage is no longer excluded, as in previous editions.

3.Losses due to obsolescence or depreciation of property are no longer excluded, as in previous editions.

Collapse is covered if caused by specified perils; breakage of building glass; hidden decay or hidden vermin damage (unless known by insured prior to collapse); weight of people or personal property; weight of rain that collects on roof; or the use of defective materials or methods of construction, remodeling, or renovation if the collapse occurs during the course of construction, renovation, or remodeling. If a collapse occurs after renovation, remodeling, or construction and is caused by peril listed in the provision, collapse is covered even if defective materials or methods were used.

Collapse is a sudden or unexpected falling down or caving in; collapse does not include buildings or structures in eminent danger of collapsing or parts hat have separated from another part of a building or structure.

Dual interests: Similar to a mortgagee clause in a homeowners policy, the protection for a named secured lender is not jeopardized by the failure of another interested party to comply with the policy provisions.

Jewelry Dealers Coverage

Forms: Under the AAIS inland marine program, two jewelry dealers coverage forms are available: form IM 1200 provides coverage on an open perils basis; and form IM 1201 provides coverage on a named perils basis. Form IM 1211, Jewelry Dealers Proposal, must be submitted for each location.

The AAIS jewelry dealers forms are available for use by manufacturers, wholesalers (including those defined as loose diamond risks), retailers, and pawnbrokers with inventories of $250,000 or less. The program does not cover jewelry, silverware, and watch departments of department stores.

Ineligible risks include fine arts or antique dealers, and those not otherwise engaged in the jewelry trade. ISO's jeweler's block coverage has a similar list of ineligible operations.

Neither the AAIS nor the ISO jewelry dealers coverage forms may be used to insure auctioneers, exhibitions off the insured's premises, or watch repair risks.

Coverage: The coverage provided under the AAIS jewelry dealers coverage forms varies as follows:

1.Jewelry dealers coverage form IM 1200 insures covered property on an open perils basis, subject to a number of exclusions: breakage; contamination; dishonest or criminal acts; defective packing; insects; loss of use or market; missing property; property while being worked on; inventory shortage; showcase theft; theft from an unattended vehicle; shortage from a package; and voluntary parting.

2.Jewelry dealers coverage form IM 1201 insures covered property against the following named perils: fire; lightning; windstorm; hail; explosion; strike, riot or civil commotion; vandalism; aircraft, spacecraft or self-propelled missile—including objects that fall there from; vehicles; smoke; water, except as excluded; and burglary and robbery, as these terms are defined in the form. In addition, there is no extension of coverage for damage to the premises done by thieves.

Covered property: Covered property includes the insured's stock of jewels, jewelry, precious and semiprecious stones, precious metals and alloys, and other items that are usual to the insured's business. Additionally, property of others for which the insured is liable, including the cost of the insured's labor and materials, is also covered under the insuring agreement.

Property in transit is covered under the jewelry dealers form only when (1) sent by registered mail; (2) shipped by armored car messenger service; (3) shipped by private paid delivery service; (4) in the custody of the insured, an employee of the insured, or a commissioned salesperson; or (5) shipped by other common or contract carrier subject to the same conditions regarding the declaration of values as are found on the fur dealers coverage form.

Excluded property: The Jewelry Dealers form specifically excludes contraband; property displayed in show windows or showcases, property at exhibitions, property sent C.O.D., property excluded in the schedule of coverages, sold property, watch dealers warehouse and storage property, and worn property (except watches being worn while being serviced).

Limits: Like the ISO Jewelers Block form, limits are indicated on the schedule of coverages for all of the following property: (1) on the described premises: (2) property in transit by registered mail, armored car, private paid delivery service, or other common or contract carrier; (3) property in safes or vaults of banks, trusts, or safe deposit companies; and (4) property in the custody of another jewelry dealer.

The AAIS Jewelry Dealers Coverage forms also require separate limits to be shown for property while away from the described premises while in the custody of a sales representative or in the custody of the insured or the insured's employee. For property off the insured premises in any situations not covered by the foregoing, a separate limit may be indicated.

Valuation: The valuation clause of each of the Jewelry Dealers Coverage forms provides for the adjustment of insured losses on the basis of the lowest of four values: the cost to repair, rebuild, or replace the property; the lowest amount listed for the property on the insured's books at the time of loss; the unpaid part of an amount the insured loaned on pledged property, including the interest earned on such property as of the date of loss; or the coverage amount shown.

No antique or historic value of property enters into the computation of a settlement for loss.

Once an item's value is established, the form describes how much the insurer will pay in the event of a loss. Payment is subject to the following: insurable interest, deductible, insurance under more than one coverage, and insurance under more than one policy.

The final payment is the lesser of: the amount determined under valuation; the cost to repair, replace, or rebuild the property with like kind and quality; the lowest figure shown in the insured's records as applying to the damaged property; the unpaid amount of any loan that the insured has made on the property; or the limit of insurance.

Available endorsements: Fire and lightning may be excluded for a premium credit on endorsement IM 1212.

Coverage may be extended to property at exhibitions. Members of the Jewelers Security Alliance receive a rate credit, as long as they remain members with endorsement IM 1213.

Endorsement IM 1220 covers items in a vault that have been pledged as security.

Protective inflation guard coverage may be provided with or without increasing the coverage amount for stock via endorsement IM 1219.

Mobile Equipment Dealers

Form: IM 1150. This form covers the stock of agricultural, construction, or materials handling equipment dealers. It may not be used to cover property being manufactured or sold on an installment plan.

Covered property: The form covers the insured's stock, accessories, and supplies. Coverage applies while the stock is on the described premises; in transit; or at other premises owned by the insured, but not for business purposes. It also covers similar property of others in the insured's care, custody, or control.

Coverage extensions: The form extends coverage to newly acquired locations (thirty days); to building damage caused by thieves; emergency removal of property from an endangered premises; pollutant cleanup ($10,000 annual aggregate per location); and to removal of debris of covered property damaged by a covered peril. Only the coverage for pollutant cleanup is in addition to the limits shown. Coverage extension limits cannot be combined or added to the limit of other coverage extensions or optional coverages. Coinsurance provisions do not apply to coverage extensions.

Optional coverages: An optional coverage is available for peak season if indicated in the schedules of coverages.

Excluded property: The following items of property are not covered:

1.Contraband.

2.Office furniture and the like.

3.Property of others transported by the insured, when the insured is acting as a carrier for hire. This exclusion also applies if the insured arranged the transportation of the property.

4.Property rented to others.

5.Vehicles designed for highway use or aircraft or watercraft.

6.Property being manufactured or assembled.

7.Money and securities.

8.Property sold to others once it leaves the insured's custody.

9.Property of persons, firms, or corporations named in the schedule of coverages.

Limits: The insured may specify limits for property at each location where the insured does business, property in transit, property at newly acquired locations, and for property that is at other premises.

Exclusions: The form excludes flood. However, the flood exclusion provides an exception for loss from sprinkler leakage but not from theft.

Territory: Coverage territory encompasses the United States (including territories and possessions), Canada, and Puerto Rico.

Coinsurance: An 80 percent coinsurance provision applies to all covered property. However, this provision does not apply when the insured chooses a reporting form.

Reporting provisions: If the insured chooses a reporting form, those provisions are attached via form IM 1264. The reporting provisions require the insured to submit reports showing the amount of the premium base, as indicated on the declarations. Reporting periods may be monthly, quarterly, semiannually, or annually.

Valuation: The form values unsold property on an actual cash value basis. The ISO form defines the value of unsold property as the least of its actual cash value, the cost of reasonably restoring the property to its condition immediately before loss, or the cost of its replacement with substantially identical property. Property sold but not delivered is valued at selling price less discounts and allowances; property of others at the amount for which the insured is liable.

Once an item's value is established, the form describes how much the insurer will pay in the event of a loss. Payment is subject to the following: insurable interest; deductible, coinsurance (80 percent), insurance under more than one coverage, and insurance under more than one policy.

The final payment is the lesser of: the amount determined under valuation; the cost to repair, replace, or rebuild the property with like kind and quality; or the limit of insurance.

Records and protective safeguards: Unlike the ISO equipment dealers form, there are no provisions regarding the maintenance of records or protective safeguards on the AAIS equipment dealers form.

Available endorsements: The Waiver of Coinsurance endorsement, IM 1261, is available with no change in premium.

For an additional premium, the insured may use endorsement IM 1263 for coverage for the insured's personal property.

Musical Instruments

Form: IM 1250. This form covers musical instruments, sheet music, music stands, cases, and other accessories. Stationary organs are also eligible. The items must be owned or used by a professional musician, business, or educational institution. Instruments for sale by a dealer and coin/token operated devices are unacceptable risks.

ISO does not have a form devoted exclusively to musical instruments. Rather, that program uses the Commercial Articles Coverage form. The list of covered property on the ISO form is not nearly as extensive as AAIS's, with ISO apparently relying on the wording “related equipment and accessories” to encompass any other items related to musical instruments.

Coverage: The form provides open perils coverage for the property on either a scheduled or blanket basis. Scheduled property must be listed on the schedule of coverages and is adjusted on an agreed value basis. Blanket coverage—subject to a 100 percent coinsurance requirement—applies to the insured's property and to that of others in the insured's care, custody, or control. The only class of property not covered is contraband.

Form IM 1250 also covers, for thirty days, newly acquired musical instruments. These are covered for the lesser of 25 percent of the limit for a scheduled item, 25 percent of the blanket limit, or $10,000.

Exclusions: In addition to exclusions discussed previously, form IM 1250 also excludes theft from an unattended automobile. However, it does not exclude voluntary parting or breakage.

Coinsurance: When blanket coverage is chosen, a 100 percent coinsurance requirement applies.

Valuation: All losses are adjusted on an actual cash value basis, unless otherwise noted. As mentioned, scheduled items are agreed value. Blanket items are ACV, subject to a 100 percent coinsurance clause. AAIS also applies the marine clauses of pair and set and loss to parts to limit payment for certain types of losses.

Once an item's value is established, the form describes how much the insurer will pay in the event of a loss. Payment is subject to the following: insurable interest, deductible, coinsurance (100 percent), insurance under more than one coverage, and insurance under more than one policy.

The final payment is the lesser of: the amount determined under valuation; the cost to repair, replace, or rebuild the property with “like kind and quality”; or the limit of insurance.

Available endorsements: Endorsement IM 1251 provides named perils coverage—fire, lightning, windstorm, flood, theft, and accident to a transporting vehicle.

Negative Film

Form: IM 1300. Individuals, as well as commercial insureds, are eligible for this coverage. The form covers exposed motion picture film, including its soundtrack. It also covers video tape that has been properly recorded, meaning it has been checked and replayed after recording.

The coverage is provided on a per production basis. It is a reporting form, with reports due at the end of each production. The schedule of coverages must show a description of the production, the media used, minimum and deposit premium, and limits. After each production, the insured must submit a report showing the actual cost, overhead, and related expenses of that production. The earned premium for each production is then subtracted from the deposit premium until the deposit premium has been fully earned.

In addition to contraband, form IM 1300 does not cover cut-outs, library stock, positive prints, and unused footage.

While similar to ISO's Film Coverage Form, the AAIS form does not contain the limitation on the policy period found in ISO. That limitation reads as follows:

We cover property until:

a.The full quota of positive prints or films has been made;

b.Your interest in the property has ceased;

c.The end of the policy period; or

d.This coverage is cancelled;

whichever occurs first.

Coverage: Form IM 1300 covers the property on an open perils basis, subject to certain exclusions.

Exclusions: In addition to the typical marine exclusions discussed elsewhere, the AAIS form also excludes loss caused by developing chemicals, developing film, electrical or magnetic injury to videotape or sound recordings (lightning loss is covered), or exposure of negative film to light.

Valuation: The form settles losses by adding together the cost to repair or reproduce the damaged property; and the reduction in value of the undamaged parts of the production. Specifically excluded from the valuation are items such as the cost of the story, scenario, sets, and props. The form also applies the pair and set and loss to parts clauses.

Once an item's value is established, the form describes how much the insurer will pay in the event of a loss. Payment is subject to the following: insurable interest, deductible, insurance under more than one coverage, and insurance under more than one policy.

The final payment is the lesser of the amount determined under valuation; the cost to repair, replace, or rebuild the property with like kind and quality; or the limit of insurance.

Available endorsements: The insured may receive a rate credit by restricting coverage to the “studios, laboratories, cutting rooms, and vaults” at the described location and while in transit between these locations using endorsement IM 1311.

Another credit is available for coverage restricted to property in vaults only one endorsement IM 1312.

Photographic Equipment

Form: IM 1350. Commercial insureds and nonprofit organizations may use the AAIS photographic equipment form to cover their cameras and photographic equipment. Projection machines and related equipment are also eligible, as well as movable sound equipment used in producing motion pictures. The final category of eligible property is miscellaneous equipment (such as lenses, tripods, or camera bags) used in connection with motion pictures. Property of others in the insured's care, custody, or control may also be covered.

TV cameras and equipment, coin operated cameras, equipment owned by dealers or manufacturers, and aerial or radar cameras are listed in the rules as ineligible.

Form IM 1350 also covers, for thirty days, newly acquired photographic equipment. This equipment is covered for the lesser of 25 percent of the limit for a scheduled item or $10,000.

The property may be covered on either a blanket or scheduled basis.

The one category of property not covered is contraband.

The ISO form that covers this type of property is CM 00 20, Commercial Articles Form. The list of covered property on the ISO form is not nearly as extensive as AAIS's, with ISO apparently relying on the wording “related equipment and accessories” to encompass any other film making necessities.

Coverage: Form IM 1350 covers the property on an open perils basis, subject to certain exclusions.

Exclusions: In addition to the typical open perils exclusions, form IM 1350 also excludes theft from an unattended vehicle. The exclusion does not apply if the insured's property is stolen from an unattended vehicle of a carrier for hire.

Coinsurance: When blanket coverage is chosen, a 100 percent coinsurance requirement applies.

Valuation: Scheduled items are adjusted on an agreed value basis, with actual cash value applying to all others. In addition, pair and set and loss to parts clauses also apply. Blanket items are subject to a 100 percent coinsurance requirement.

Once an item's value is established, the form describes how much the insurer will pay in the event of a loss. Payment is subject to the following: insurable interest, deductible, coinsurance (100 percent), insurance under more than one coverage, and insurance under more than one policy.

The final payment is the lesser of the amount determined under valuation; the cost to repair, replace, or rebuild the property with like kind and quality; or the limit of insurance.

Physicians and Dentists Equipment

Form: IM 1400. The form provides equivalent coverage to that found on the ISO physicians and surgeons equipment coverage form: equipment, tools, supplies, and scientific books used in the insured's profession, as well as such property in the insured's care, custody, and control; furniture, fixtures, office equipment; and use interest in improvements. The coverage for medical equipment and the like also applies to the property of others that the insured uses.

Coverage extensions: The same additional coverages are available on both the AAIS and ISO programs, but different methods are used to indicate coverage. The first AAIS additional coverage is damage to building done by thieves. It specifies that the insured must own the building or be responsible for it. It would not cover damage done by thieves at any other building.

ISO's coverage extension does essentially the same thing. However, when the insured purchases coverage for his equipment off-premises, that coverage extension is deleted in its entirety, leaving the insured open to damage done by thieves at his office, with no coverage.

The second coverage extension of the AAIS form is “emergency removal.” It covers the property for ten days while it is being moved to another location or stored to prevent loss from a covered peril.

Coverage is available while the property is in the care, custody, or control of a carrier for hire.

Excluded property: Neither AAIS nor ISO covers radioactive substances or contraband. AAIS also excludes property belonging to “dealers, clinics, hospital, medical schools,” or other similar organizations.

Territory: Coverage territory encompasses the United States (and possessions), Canada, and Puerto Rico.

Exclusions: Under the form—except for lenses—breakage of glass, tubes, bulbs, or lamps, or articles made largely of glass is excluded. In addition, losses resulting from marring, scratching, or chipping are excluded. Exposure to light is also excluded.

Both the AAIS and ISO forms contain an exception permitting coverage for breakage losses that result in certain perils. However, those perils differ considerably. Both forms provide exceptions for fire, lightning, explosion, windstorm, earthquake, vandalism, aircraft, rioters, strikers, theft, attempted theft, or accident to a transporting vehicle. However, the AAIS coverage form also covers breakage losses from hail, civil commotion, fire extinguishing equipment leakage, collapse, falling objects, smoke, sonic boom, sinkhole collapse, volcanic action, or weight or ice, snow, or sleet.

Valuation: AAIS adjusts all losses on an actual cash value basis, with the addition of the pair or set and loss to parts clauses. Tenant's improvements must be repaired within a reasonable time and are settled based on the cost to repair, replace, or rebuild them with material of like kind and quality. Under the ISO coverage form, an actual cash value settlement is made for these items.

The final payment is the lesser of the actual cash value; the cost to repair, replace, or rebuild; the amount of the insured's interest in the property; or the coverage amount.

Coinsurance: A coinsurance provision requires the insured to maintain limits equaling 80 percent of the full actual cash value of the covered property.

Available endorsements: The insured may choose to cover office furniture away from described premises, extra expense, money and stamps, personal effects, and records via endorsement IM 1411.

Sign Coverage

Form: IM-1450. The AAIS Sign Coverage Form (like the comparable ISO Signs Coverage Form) may be used to insure neon, electric, fluorescent, automatic, and mechanical signs but not billboards or ordinary fixed signs, even if they are directly illuminated by electric lights.

Coverage: The form covers much the same property as ISO. However, AAIS adds coverage for lamps and street clocks and data processing equipment used with such signs. The property may be covered on a scheduled or unscheduled basis. The only category of property not covered is contraband.

Exclusions: The typical open perils exclusions apply. Both ISO and AAIS exclude breakage of the property while it is being “installed, dismantled, repaired, or in transit.” However, AAIS gives back coverage if the breakage is caused by one of the specified perils.

Territory: The policy territory includes the United States, Puerto Rico, and Canada.

Coinsurance: When unscheduled coverage is chosen, a 100 percent coinsurance requirement applies.

Valuation: The form uses actual cash value for unscheduled items and agreed value for scheduled items. It also applies a pair and set clause and a loss to parts clause.

Once an item's value is established, the form describes how much the insurer will pay in the event of a loss. Payment is subject to insurable interest, deductible, coinsurance (100 percent), insurance under more than one coverage, and insurance under more than one policy.

The final payment is the lesser of the amount determined under valuation; the cost to repair, replace, or rebuild the property with like kind and quality; or the limit of insurance.

Theatrical Property

Form: IM 1500. This form is intended to cover scenery, costumes, and other property used in plays or theatrical productions that are described on the schedule of coverages. Ineligible risks include carnivals, circuses, rodeos, costume rental companies, and theatrical suppliers. The form also covers similar property of others in the insured's care, custody, or control.

Coverage: The form provides open perils coverage for the property on a blanket basis. Property not covered includes animals, buildings and improvements, contraband, furniture, jewelry; money and securities, valuable papers, and vehicles. It does, however, cover vehicles actually used in the production. ISO lists all of these items as not covered, except valuable papers and furniture, fixtures, and other property that is not used in the production.

Exclusions: In addition to the typical open perils exclusions, the AAIS form (as well as the ISO form) also excludes theft from an unattended auto and missing property, when there is no physical evidence to indicate what happened to the missing property.

Valuation: The AAIS form adjusts losses on an actual cash value basis. It also applies a pair and set clause and a loss to parts clause. The adjustment is subject to an 80 percent coinsurance clause.

Once an item's value is established, the form describes how much the insurer will pay in the event of a loss. Payment is subject to the following: insurable interest, deductible, coinsurance (80 percent), insurance under more than one coverage, and insurance under more than one policy.

The final payment is the lesser of the amount determined under valuation; the cost to repair, replace, or rebuild the property with like kind and quality; or the limit of insurance.

Valuable Papers and Records

Form: IM 1550. This form covers documents, records, or manuscripts, including maps, deeds, books, abstracts, drawings, films, or mortgages. Ineligible property includes contraband, data processing media, money and securities, property held for delivery, property in storage, property that cannot be replaced, and samples for sale.

Coverage: The form provides open perils coverage on the described property. Coverage is provided on a blanket basis, but individual items may be scheduled.

Exclusions: In addition to the typical open perils exclusions, the AAIS form (as well as the ISO form) excludes electrical or magnetic damage to recordings and errors or omissions in processing and such.

Valuation: Scheduled items are covered on an agreed value basis; unscheduled items at ACV. AAIS also applies the pair and set clause and the loss to parts clause.

Once an item's value is established, the form describes how much the insurer will pay in the event of a loss. Payment is subject to the following: insurable interest, deductible, insurance under more than one coverage, and insurance under more than one policy.

The final payment is the lesser of the amount determined under valuation; the cost to repair, replace, or rebuild the property with like kind and quality; or the limit of insurance.