Commercial Property and Inland Marine Coverages
Commercial property
The commercial package policy combines property and liability. Property coverage parts include building, business personal property, personal property of others, business income and extra expense, and legal liability. Key concepts are coinsurance (80%, 90%, or 100%), agreed value (suspends coinsurance), blanket versus specific insurance, and the margin clause, which caps recovery at a stated percentage of the last reported values on a reporting form.
Causes of loss forms are basic, broad, and special. Special is open peril subject to exclusions (ordinance or law, earth movement, water, utility services, neglect, fungus). Equipment breakdown, flood, and earthquake must be added separately.
Business income pays lost net income and continuing expenses during the period of restoration plus 30 days of extended business income; extra expense pays costs to keep operating. Civil authority coverage is typically 72 hours.
Inland marine
Built on the Nationwide Marine Definition, inland marine covers property in transit, property of others in the insured's care, and mobile or floating property. Know motor truck cargo, bailee's customer coverage, contractor's equipment floaters, valuable papers and records, accounts receivable, EDP, fine arts, jewelers block, and installation floaters. Jewelry and furs are filed classes with standard forms.
Traps
Confusing business income with extra expense; assuming special means no exclusions; forgetting that equipment breakdown is separate; assuming a reporting form forgives underinsurance when the margin clause may still limit recovery.
Rule of thumb
Coinsurance formula: (limit carried / limit required) x loss, capped at the limit.