CM 00 01 – Commercial Inland Marine Conditions

A. Concealment, Misrepresentation, or Fraud

The insurance company trusts and relies on the named insured’s statements and issues the policy and adjusts claims based on those statements. Coverage is void if the named insured commits fraud or intentionally conceals or misrepresents any material fact at any time with respect to this coverage, the covered property, its interest in the covered property, or a claim that this insurance covers.

B. Control of Property

The named insured is not responsible for acts or neglect by any party that is not under its control or direction and the insurance coverage is not affected by those acts. If the named insured disregards any policy condition at one location, coverage at other locations is not affected provided that it did not violate the same condition at those locations.

Example: Both of Alex's locations are equipped with automatic sprinkler systems. He inadvertently lets the service contract with the installing company lapse at his main location. A fire occurs at his other location, and the sprinkler system quickly controls it. Although the main location system was no longer in proper service, the loss at the second location was fully covered because that system was not affected or impaired by the lapse at the main location.

C. Legal Action against Us

The named insured may be dissatisfied with the insurance company's actions in handling a claim. However, it cannot bring legal action against the company until and unless it has complied with all the coverage form or policy’s terms and conditions. In addition, the legal action must be initiated within two years after the named insured first knew about the loss or damage.

Note: The time to bring legal action is different in certain states because of specific legislation. In those cases, the state's requirements supersede and replace these requirements.

D. No Benefit to Bailee

This insurance coverage is written for only the named insured’s benefit. No other person, organization, or bailee that has custody of covered property benefits from this insurance.

E. Policy Period, Coverage Territory

The insurance company pays for only insured losses or damages to covered property that take place during the policy period and that occur within the defined coverage territory.

F. Valuation

The insurance company pays the least of the following:

• The property's actual cash value
• The cost to restore the property but only to the condition it was in immediately prior to the loss
• The cost to replace the damaged or destroyed property with similar property

The value of covered property is not determined at the time insurance is purchased but instead is determined at the time of loss or damage.

Note: This valuation condition is often altered in the various coverage forms, and changes to it must be carefully reviewed.