To put this in context, let's venture into the history of insurance.
Marine insurance is the earliest form of insurance as we know it today. Although, the basis for insurance of personal property is linked historically to the British, it most likely originated from risks faced by Italian merchants sailing to England.
Nevertheless, it is the British origin that we have history support from which to develop a basis for today's personal property insurance. We find that Lombard Street - a center of business - in London was the origin point of "insurance," with historical descriptions of the concept of marine insurance dating back to at least the 1470s. By the way, Lombard streetLombard Street was named after the merchants of Lombardy of Italy, see the connection? It was, to say the least, not well organized especially if a dispute arose.
Subsequently, in 1575 we find the first legal registration of insurance policies by the Chamber of Assurances. Later, in 1601, marine policies were settled by a Court of Arbitration. However, in 1720 there came the Bubble Act which chartered two insurance companies, namely Royal Exchange and London Assurance. They were limited to only marine insurance. Eventually, they were repealed.
Believe it or not, coffee houses were an important part of the historical development of marine insurance. The most famous one was Lloyd's of London.1 Investors would gather, drink coffee, and underwrite cargo ships and their shipments. These so-called investors became organized three years later and called themselves Lloyds of London.2
The various investors who bid to insure a ship and its cargo were concerned with two factors, namely the ship seaworthiness and the cargo risk. The least risk was a ship with an A rating and a cargo rating of 1 (one) from which we get the expression A1.
Marine insurance was eventually expanded to include all non-marine moveable (personal property). Marine insurance is the most common policy used for personal property. It may be associated with a homeowners policy to cover scheduled personal property or completely unassociated.
"Marine insurance includes insurance against any and all kinds of loss of or damage to: Precious stones, jewels, jewelry, gold, silver and other precious metals, whether used in business or trade or otherwise and whether the same be in course of transportation or otherwise."3
Since marine policies originally dealt with ship cargos and since ships (or their cargo) "floated," the policies were also called floaters.
"Floater coverage for property which moves from location to location either on a scheduled or unscheduled basis. If the floater covers scheduled, coverage is listed for each item. If a floater covers unscheduled property, all property is covered for the same limits of insurance."4
A floater usually has no deductible and covers all risk. Once an item is scheduled via a floater, it is not included in the regular homeowners policy (you cannot collect on one item twice).
Eventually, cargos being insured by marine insurance were transported by wagons and other land based transportation.5 Thus, the term "inland marine policy" came in to use. Now, this type of policy is also available to private citizens and does not apply exclusively to cargo, ships, or wagons. Therefore, one may encounter either term (marine or inland marine) being used for personal property floaters which have nothing to do with cargo. The two terms are synonymous.
"Jewelers' Block Insurance Policy type of Inland Marine Insurance which provides coverage for jewels, watches, gold, silver, platinum, pearls, precious and semiprecious stones. Property can be owned by the insured jeweler, or can be customer's property in care, custody, and control of the jeweler. Coverage is on an all risks basis except specifically excluded perils such as wear and tear; war; decay; loss of market; flood; earthquake; loss or damage while jewelry is being worn by the insured or his/her representatives; loss resulting from the infidelity of any person under the care, custody, and control of the insured; damage or destruction of jewelry after it leaves the insured under an installment contract; mysterious disappearance; and shipments of jewelry not sent registered first class mail."6
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1. Owned by Edward Lloyd circa 1688. Back to Text ↑ ↑ ↑
2. Their "messengers" were still called "waiters" in the 1970s. Back to Text ↑ ↑ ↑
3. California Insurance Code § 103(c). Back to Text ↑ ↑ ↑
4. Barron's Dictionary of Insurance Terms, page 115. Back to Text ↑ ↑ ↑
5. This is the case in the United States. Back to Text ↑ ↑ ↑
6. Barron's Dictionary of Insurance Terms, page 115. Back to Text ↑ ↑ ↑
7. Illustrations - Istockphotos.com.