The American Association of Insurance Services (AAIS) has released a series of new policy forms, endorsements, and corresponding schedules for covering public or private infrastructure facilities.
The forms were recently released under the miscellaneous forms section of the AAIS Inland Marine Guide, an industry resource of forms, rating, and underwriting guidelines for the traditionally nonfiled classes of inland marine insurance.
The Guide is developed and maintained by AAIS, which develops policy forms and rating information used by more than 700 property/casualty insurers throughout the U.S.
The Guide’s latest base form, Infrastructure Property Coverage, covers the physical structures and equipment of an interrelated system that provides public or private service such as roads, water supply, electrical grids, or telecommunications. An accompanying schedule can be used to indicate and describe the covered infrastructure, and to indicate policy income coverage options, limits, deductibles, waiting periods, valuation, and coinsurance.
According to Robert Guevara, AAIS vice president of inland marine and the principal developer of the Inland Marine Guide, the new forms are designed to address property coverage needs of infrastructure facilities that are distinct from those addressed by standard commercial property forms.
“Commercial property forms are designed to cover buildings and contents at specific locations,” he explains. “Infrastructure consists of interconnected structures and equipment that are spread out over a wide area.”
Guevara says this could apply to those insurance companies that want to insure larger structures, such as a sewage system, “Commercial property coverage is not designed for the structures, such as pipes and tunnels, or equipment, such as pumps, that make up a sewage system.”
“Coverage under the Guide’s new infrastructure forms is for physical networks that can include transportation, energy, water management, communications, and solid waste management facilities,” he says.
In addition, the Guide also provides infrastructure endorsement options for covering buildings that house the insured infrastructure property, as well as buildings and personal property used to support the operation of the insured infrastructure. Other endorsements and corresponding schedules are available for providing coverage for business income, earthquake and flood, and sewer backup.
While the Inland Marine Guide is devoted to the traditionally nonfiled classes, its forms are filed by AAIS in numerous states that do not exempt inland marine insurance from filing requirements. For those states, the infrastructure forms are being filed with a proposed effective date of Jan. 1, 2013.