Insurers seeking to write property coverage for equipment sales and rental operations now have access to a new set of standardized policy forms and coverage schedules for doing so.
The American Association of Insurance Services (AAIS) is adding a new class of coverage — Equipment Sales and Rental — to its Inland Marine Guide. The Inland Marine Guide is an industry resource of forms, rating procedures, underwriting guidelines, and other information for the traditionally non-filed classes of inland marine insurance.
The new Equipment Sales and Rental class features a base form that provides open perils coverage for agricultural, construction, and other kinds of mobile equipment held for sale or rental and described on a schedule. Coverage is also provided for parts and accessories, for equipment of others the insured is servicing, and for loss to rented equipment when the lessee fails to meet obligations to insure it.
The form includes two options for providing the principal property coverage:
— “Inside and Outside Building Coverage,” where separate limits are indicated on a schedule for insured property inside buildings and insured property in outdoor storage yards; or
— “Separate Limit Coverage,” where limits apply to each type of described property (e.g., equipment for sales, equipment for rent, equipment being serviced, parts and accessories) whether the property is inside or outside of buildings.
A schedule of coverages is provided for each option; the insurer makes its selection among the options by utilizing one or the other schedule.
Supplemental coverages built into the base form provide coverage for, among other things, equipment that is away from the insured premises while being transported, serviced, on exhibition, or used during a trial period.
The Guide’s new Equipment Sales and Rental class also includes 10 endorsement options, including options for covering rented property other than equipment and tools, the insured’s interest in equipment sold under an installment plan, and equipment of others the insured is transporting as a carrier for hire.
Rating procedures and loss cost rating information for the new class are being released to users of the AAIS Inland Marine Guide.
Although the Equipment Sales and Rental class is introduced as a non-filed class of inland marine insurance, AAIS is filing the new forms in 21 states that do not exempt inland marine insurance from filing requirements.
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