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12.0 Commercial Marine & Aviation Insurance

Learning Objectives​

Upon completing this chapter, you should be able to:

  1. Compare the purposes and uses of Inland Marine and Ocean Marine insurance.
  2. Identify the major classes of property insured under marine insurance contracts.
  3. Describe the principal Inland Marine coverage forms and floaters.
  4. Distinguish among the transportation coverage forms available under Inland Marine insurance.
  5. Identify the property and liability coverages provided by Ocean Marine insurance.
  6. Recognize the property and liability coverages available under Aviation insurance.

Overview​

Commercial Auto coverage forms insure autos used in the insured’s business, but they generally do not cover property being transported in those autos. Standard commercial property policies also exclude certain types of property, including personal property in the care, custody, or control of a bailee, as well as piers, docks, mobile equipment, and aircraft. Inland Marine insurance may be used to address these coverage gaps.

Because these types of property present specialized exposures, they often require separate insurance coverage. Inland Marine insurance, sometimes called dry transportation insurance, covers various types of movable property while on land. Ocean Marine insurance, also known as wet transportation insurance, covers property transported over water and may also insure the vessel itself. Aviation insurance provides coverage for physical damage to aircraft and liability arising from their ownership, maintenance, or use.

Marine and aviation insurance may be written as stand-alone policies or added to a Commercial Package Policy as separate coverage parts. Each coverage is governed by its own provisions and conditions, along with the Common Policy Conditions discussed in Chapter 9. When included in a Commercial Package Policy, the coverage is also subject to the Common Policy Declarations and the Declarations for the applicable coverage part.

This chapter examines the key concepts, coverages, and policy options associated with Inland Marine, Ocean Marine, and Aviation insurance.

An Insurance Story

The Furniture Company’s Building and Personal Property Coverage Form generally covers stock only while it is located on or near the insured premises. Even when the Causes of Loss – Special Form applies, standard commercial property policies provide limited, if any, coverage for property while it is in transit.

This creates a potential coverage gap for furniture and other stock that the company has purchased from manufacturers but that has not yet arrived at its stores. Adding an Inland Marine coverage part can help protect this property while it is being transported.