Commercial or Auto Insurance – Oldest Insurance Coverage?

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A common question you may have when searching for Ocean Marine insurance is coverage. No matter if your are on the hunt for cheap car insurance or a specialty program, coverage is huge.

Looking for the lowest rate possible with the right package is what you need. Regardless if you live in Anaheim, or Riverside, understand what you are buying.

Before you start shopping for the lowest rates, make sure you understand what you are getting first.

 

Oldest Insurance Coverage

On to the main course. So, what is Ocean Marine Coverage? This is a common question, especially if you found yourself in an industry which requires this type of coverage.

For starters, it’s the oldest commercial line policy. Yes, it’s not automobile insurance like many might believe.

Actually it makes auto insurance look small in comparison.

 

Roots in Insurance Coverage

In fact, it’s the modern commercial insurance marketplace began with Lloyds of London. This is where a system for insuring cargo inside ocean going ships was set up.

This coverage would cover against loss and damage in the early 19th Century. Many of the unique terms and conditions that define coverage, came from this start.

The tradition is deep and lives on in present day. Pretty fascinating stuff, so let’s dig deeper.

 

Policy Coverage Overview

Now that you have a framework of how it got it’s roots, let’s look at an underwriters perspective. This is important to understand since this is how your policy is either accepted or rejected.

Curious to what an underwriter is looking for in respect to cargo? Well, below is a list of their interests.

  •  Shipments export or import
  • Cargo hauled by vessel or craft.
  • What are the places of origin and destination
  • Types of commodities shipped
  • Methods of packing the shipped merchandise
  • Cargo hauled below or on deck

 

 

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Underwriter Policy Review

An underwriter of the policy may collect more information then you think. It’s their job to review the details of each policy. This helps to reduce company claims and proper classification of policies.

There are times when policies are not matched up with best insurance companies. Every carrier has certain markets they specialize in. This offers the best business solution or cost efficient way to find low cost insurance.

Important Points to Remember

  • Get information on values shipped on a yearly basis.
  • Get information how merchandise will ship. For example, via containers, crates, pallets, etc.

 

Open Cargo Policy

A marine open cargo policy is a contract between you the insured and your company. This is no different if you were to buy commercial auto insurance, same procedure.

This coverage will provide automatic protection on all shipments that are within coverage scope. This coverage scope on your policy declaration page will outline this for you.

This coverage takes place regardless of prior notice. The policy is continuous until cancelled. It can have a 30 day cancellation notice.

Your company will want each shipment declared on a company provided form.

 

Hull Policy Protection

Common question if your in the marine business and need this coverage. So, what is Hull Coverage? It started with the american hull market for large ocean hulls.

These hulls past through 1898. This is when the American Institute of Marine Underwriters became a formation. This group became an industry trade organization.

 

Marine Act

In 1920, the Merchant Marine Act passed through the federal government.

This act let American marine companies to underwrite the new American merchant. These merchant marines were first of their kind during this period.

In current day, the American hull syndicate has over 70 companies.

It has also a capacity of $50,000,000 per vessel. You can see why it is one of the leaders in the world of marine coverage.

 

Protection and Indemnity Coverage

A company will want complete information when looking at your risk.

This gives the underwriter a complete overview of the exposures. If the risk changes during the policy term, contact your company. They need know of any changes.

Reporting becomes an important role if your in this business. Operations change. Shipments and types of products can change depending on contracts.

This is why it is important to keep good record keeping. You want to have any new changes to your operation noted. You will want to pass this information to your carrier right away.

This ensures you have no gaps in coverage. Also, if there are underwriting exclusions, you will find out once you report updates.

 

Ocean Marine

Ocean marine is a difficult risk. It has broadening of legal interpretations which open it up for exposure.

If you put that together with many settlements awards increasing, than you can see how hard it is to place.

Rarely will a company underwriter accept this class of business without the hull coverage.

 

Freight Coverage

Freight coverage insures the charge made for shipping cargo. This coverage will cover for indirect loss. Freight covers the loss of shipping costs.

For example, if cargo is damage and you send out replacement cargo, you pay another fee. The second payment of shipping costs is the coverage.

Freight covers the cost of shipment.

 

Jones Act 1920

What is this act, common question. Masters and members of the crew of an ocean vessel have coverage.

Under this act, the law permits an injured seaman to sue the employer for damages and have a jury trial.

It would be in the employers best interest to buy the Voluntary Compensation Maritime.

This coverage endorsement is voluntary. It will provide coverage for statutory benefits of the worker’s home state.

This approach is a matter of goodwill and in hopes, will prevent lawsuits.

 

Defense Base Act

Legislation that extends the Long-shore and Harbor  Workers Compensation Act provides overseas coverage. This coverage only applies to certain categories of employees working overseas.

The 3 general divisions of covered employees are as followed:

  1. employees working on military bases acquired from foreign government after 1940.
  2. employees of contractors and subcontractors engaged in public work projects. These work projects are for the U.S. government outside the continental US.
  3. employees employed outside the continental US by a U.S. employer. The purpose of this employer is to provide welfare or other such services to the Armed Forces. The Secretary of Defense approved this coverage.

 

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United States Longshoreman and Harbor Workers Act

A federal law that provides no fault workers compensation benefits to employees.

These employees have to be other than masters or crew members of a vessel injured in maritime hours.

Maritime hours are the employment hours of the worker, but just on sea.

You can find these hours of operation during loading, unloading, repairing, or building.

 

Employer Rights

If you are an employer, you can buy coverage under a standard workers compensation form.

An endorsement called the US&H coverage endorsement is what you will want to buy if you need it.

 

Implied Warranties

Ocean Marine like many policies have implied warranties. Here are a list of the implied warranties.

  •  the voyage must be for legal purpose
  • the vessel must be sea worth
  • the cargo must have proper packaging on the ship
  • no changes in route on the voyage

As you can see, if any of these are not followed, coverage may not be present.

You always want to make sure you go over all your conditions and policy information. This is important stuff to read on. A misunderstanding in coverage information can cost you big down the line.

 

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Commercial Insurance CA

As you can see, there are many components to this type of insurance coverage. You always want to make sure to start with carriers who will accept your type of risk first.

After you get the approval from the carrier, then you start your quoting process. Remember, to compare auto insurance California is a lot different to this process.

When you shop for auto quotes for example, there are your basic few questions. Commercial coverage on this level involves a lot more questions on both ends.

 

Independent Insurance Agents Near Me

This is your best bet. Find local independent insurance agencies near me. 

We all do it. Search and research that is. So, do just that. Research your best options, and then find the best price. Not the other way around. The other way around will just cost you time and a lot people saying, “I’m sorry, we do not have a market for that”.

This can be frustrating, especially if you have to do this process every renewal period or term.

As a consumer, you will want to ask more questions to your agent then what you did with your automobile insurance agent.

In most cases, this type of coverage is for your livelihood. Yes, personal auto coverage transports you to work, but the concept is a lot different.

 

Find California Insurance Quotes

Commercial insurance quoting to this degree is not going to happen in minutes online.

You will still need to research where to begin your search.

There are not as many companies who offer this type of coverage so, this can become discouraging if your looking for this type of coverage.

 

Compare Coverage and Policy Price

Also, price or premium, is going to be very different from your personal policy.

We have been comparing commercial truck insurance and Auto insurance California.

We do this with over 100 A+ rated carriers for OVER 30 years. Regardless if you buy from us, were here to help!

Education is key to finding low cost insurance California!

 

Service Areas: Anaheim, Costa Mesa, Fullerton, Orange, Ontario, Fontana, Riverside, Yorba Linda, Moreno Valley,  Irvine.   

Commercial or Auto Insurance – Oldest Insurance Coverage?
  • Blanca Sanchez
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