5.4 Inland Marine Insurance: The Nationwide Definition, Filed and Non-Filed Forms
Key Takeaways
- The Nationwide Marine Definition, adopted by the NAIC, lists the classes of property that may be written as inland marine: imports, exports, domestic shipments, instrumentalities of transportation and communication, personal property floaters and commercial property floaters.
- Filed or controlled inland marine forms have rates and forms filed with the state regulator, while non-filed or uncontrolled forms are written on manuscript terms at rates the insurer sets, which is why inland marine is prized for unusual risks.
- Inland marine coverage typically follows the property rather than a location, is usually written open peril on a replacement cost or agreed value basis, and often carries no coinsurance.
- Bailee forms cover the customers' goods in the insured's care, custody or control, and a bailee's customers form pays regardless of the bailee's legal liability.
- Instrumentalities of transportation and communication such as bridges, tunnels, piers, pipelines, radio and television towers are insured under inland marine rather than commercial property.
Quick Answer: Inland marine covers property that moves, is held by a bailee, or is hard to rate at a fixed location. The classes eligible for inland marine treatment are set by the Nationwide Marine Definition adopted by the NAIC. Filed (controlled) forms have rates and forms on file with the regulator — the personal articles floater, the commercial contractors equipment and installation forms. Non-filed (uncontrolled) forms are manuscripted at rates the insurer sets, which is why inland marine handles the exotic risks. Coverage is usually open peril, follows the property rather than a location, and often carries no coinsurance.
Inland marine is the answer to a simple historical problem. Ocean marine insurers covered cargo across the water; when goods came ashore and moved by rail and truck, marine underwriters followed them inland. Regulators eventually had to define where marine ended and fire insurance began, and the result is the Nationwide Marine Definition.
The Nationwide Marine Definition
The Nationwide Marine Definition, developed by the NAIC, is the regulatory list of what may be written as marine (ocean or inland) insurance. Its six broad classes are:
- Imports — property being imported, from the time it leaves the foreign point of origin until it reaches its destination, subject to limits on how long it may remain in storage.
- Exports — property being exported, from the point of shipment in the United States until delivery abroad.
- Domestic shipments — property in transit within the United States by rail, truck, air, coastwise vessel, mail or parcel service, whether the insured is the shipper, consignee or carrier.
- Instrumentalities of transportation and communication — bridges, tunnels, piers, wharves, docks, pipelines, power transmission and telephone lines, radio and television towers, and outdoor cranes and loading equipment. These fixed structures qualify as marine because they facilitate transportation or communication.
- Personal property floaters — coverage on personal property wherever it may be, written on a scheduled or blanket basis.
- Commercial property floaters — coverage on business property of a mobile or floating nature, and on property of others in the insured's care.
The definition also states what is not eligible: buildings and their contents at a fixed location that are not incidental to a marine class, and most stationary merchandise stock.
Filed (Controlled) Versus Non-Filed (Uncontrolled) Forms
| Filed / Controlled | Non-Filed / Uncontrolled | |
|---|---|---|
| Regulatory treatment | Forms and rates are filed with, and approved by, the state insurance regulator | No filing requirement; the insurer sets terms and rates |
| Standardization | Standard ISO or bureau forms, consistent across carriers | Manuscript wording drafted for the specific risk |
| Typical classes | Personal articles floater, personal effects, camera and musical instrument floaters, contractors equipment, installation, bailee, accounts receivable, valuable papers, signs, theatrical property | Difference in conditions, exhibition and fine arts on unique terms, cargo for a specific trade, transmission and distribution systems, satellite and specialty risks |
| Why it matters at a claim | The adjuster can look up the standard form and apply known case law | The adjuster must read the actual manuscript wording; nothing can be assumed |
The classic exam framing is that controlled forms are filed and standard, uncontrolled forms are unfiled and negotiated. The practical framing is that when an inland marine claim arrives, the first job is to determine which kind of form is on the file.
Personal Inland Marine
- Personal Articles Floater (PAF). Schedules high-value classes the homeowners form sublimits or excludes: jewelry, furs, cameras, musical instruments, silverware, golfer's equipment, fine arts, stamp and coin collections. Coverage is open peril, worldwide, and usually agreed value or stated amount with no deductible on scheduled items. It fixes the two homeowners problems: the special-limit sublimit on theft of jewelry and the absence of coverage for mysterious disappearance and breakage.
- Personal Property Floater. Blanket coverage on the insured's unscheduled personal property, worldwide.
- Personal Effects Floater. Covers personal effects of tourists and travelers while away from the residence premises.
- Fine Arts. Written at agreed value with the schedule and appraisal attached; a pair-and-set clause governs partial losses.
Commercial Inland Marine
| Form | Exposure Covered |
|---|---|
| Contractors Equipment Floater | Mobile tools, machinery and equipment at job sites and in transit; scheduled or blanket, often with a small-tools sublimit |
| Installation Floater | Materials and equipment a contractor is installing, from the time of purchase through installation and acceptance |
| Builders Risk (inland marine version) | Structures under construction, though many Florida builders risk exposures are written on the commercial property CP 00 20 form |
| Motor Truck Cargo — carrier's form | The trucker's legal liability for cargo of others in its custody |
| Motor Truck Cargo — owner's form | The shipper's own goods while in transit |
| Transportation / Annual Transit | The insured's own property in transit by any carrier, on named-peril or open-peril terms |
| Bailee's Customers Form | The customers' goods in the insured's care — dry cleaners, repair shops, processors — payable regardless of the bailee's legal liability, which is what distinguishes it from a bailee legal liability form |
| Accounts Receivable | Loss from the inability to collect because records were destroyed, plus the cost of reconstructing them |
| Valuable Papers and Records | Cost to research, restore or replace destroyed books, manuscripts, drawings, films and abstracts |
| Electronic Data Processing (EDP) | Hardware, media and, by extension, data; often written with mechanical breakdown and electrical injury buy-backs the property form excludes |
| Signs Floater | Neon, fluorescent, automatic and mechanical signs, on open-peril terms |
| Physicians and Surgeons Equipment | Professional instruments and office furnishings |
| Jewelers Block and Furriers Block | Stock, customers' goods and property in transit for those trades |
| Exhibition Floater | Property while on display at trade shows and exhibits |
Claim-Handling Points for a Florida Adjuster
- Coverage follows the property, not the address. An inland marine loss can occur anywhere in the coverage territory, so the first questions are what the item was, where it was, and who had custody.
- Valuation varies by form. Agreed value on scheduled fine arts, replacement cost on much contractors equipment, actual cash value on some transit forms. Never assume; the valuation clause is the settlement.
- Care, custody or control matters twice. It triggers coverage under a bailee form and it triggers an exclusion under the CGL. The same fact pattern that voids a general liability claim may be squarely covered by inland marine.
- Concurrent coverage. A contractor's tools stolen from a locked trailer may implicate the contractors equipment floater, the commercial property form if the trailer was at the described premises, and the auto policy if the trailer was attached to a covered auto. Sort the other insurance clauses before making a payment.
- Florida windstorm. Many inland marine forms cover windstorm without the hurricane deductible structure that governs the property policy, because F.S. § 627.701's hurricane deductible rules attach to residential property insurance, not to a contractors equipment floater. Confirm the deductible clause on the marine form itself.
A Florida dry cleaner's plant suffers a covered fire that destroys $40,000 of customers' garments. The dry cleaner is insured under a bailee's customers form. The insured proves the fire started from a neighboring building and was in no way the dry cleaner's fault. How does the bailee's customers form respond?
Which of the following would properly be insured as inland marine under the Nationwide Marine Definition?