Commercial Property and Inland Marine Coverage
Commercial property
The Commercial Package Policy combines coverage forms and causes-of-loss forms. The Building and Personal Property Coverage Form covers the building, business personal property, and personal property of others. Basic, broad, and special causes-of-loss forms differ in the perils insured. Commercial property commonly uses coinsurance, replacement cost, agreed value, blanket limits, and deductibles. Business income with extra expense covers lost earnings and continuing or extra costs during the period of restoration. Ordinance or law, equipment breakdown, and spoilage may need endorsements.
Inland marine
Inland marine evolved from ocean marine and covers property that is mobile, in transit, or in the care of others. The Nationwide Marine Definition is the traditional reference for eligible property. Typical inland marine coverages include contractor's equipment, motor truck cargo, bailee's customer goods, fine arts, valuable papers, instruments, and accounts receivable. These floaters often follow the property rather than a fixed location and may have scheduled limits and lower or no coinsurance.
Worked example
A contractor's $70,000 excavator is stolen from a jobsite. A commercial property form may exclude vehicles and property in transit, while a contractor's equipment floater is designed for mobile equipment. The adjuster first confirms the equipment is scheduled or within the blanket limit, then applies the floater deductible and any valuation condition.
Traps
Do not use a commercial property form to cover a shipment in transit without checking for inland marine or cargo coverage. Coinsurance is not the same as a deductible. Special causes of loss is broader than broad, but it still has exclusions. Business income does not pay for permanent loss of market share unless endorsed.