Coverage Provides Variety of Protection for Risks That Are Neither Inland Nor Marine

Talk about small but mighty: there is a type of insurance that accounts for only about 2% of the premiums for the property/casualty insurance industry, yet returns a much larger share of the industry profit: Inland marine, which posted a combined ratio of 97.5% from 1991-2000, compared to 105.2% for personal lines and 109.9% for commercial lines during the same reporting period, according to industry analyst A.M. Best Company. The insurance is actually a chain of small classes or lines that have very unique features that are more different than they are alike; inland marine rating assesses risks for those classes and establishes a variety of coverage that is generally applied to products and goods that are moveable, in transit, under construction, very large, or risks that are unique in nature and undergo frequent and constant change. A good illustration of this exposure is the construction lines (e.g., contractor’s heavy equipment, builders risk, or installation floaters), which make up the biggest share of premium volume in that segment.

Constant change is all in a day’s work with Union City Construction

Consider Union City Construction, a local contractor that has a variety of tractors, backhoes and caterpillars running on a large lot that is being developed to construct a 100-unit condo complex complete with underground garages, multiple pools and spas, and units with multiple levels. The ground may be dry and flat one week, yet after a prolonged rainstorm the following week it could turn into a slippery, muddy slope that takes the drivers all their considerable skill to navigate without incident. And of course, the job site that Union Construction begins work on at the start of each day is by nature a changed entity at the end of the day, because some portion of the job is at a different point of completion.

Understanding the risks to determine the right premium

To calculate the correct inland marine rating for the risks that Union City Construction faces as well as any other business or risk that warrants coverage, insurance professionals may add special perils loads for on- and off-premises exposures, plus loads for flood, earthquake, and additional perils common for contractors heavy equipment, as well as loss multipliers and other factors. For the risks that you may face, contact a professional insurance agent who can provide guidance in obtaining this special coverage.

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