1. Forms
2. CM
3. CM-60-09

What the form is

The CM 60 09 "NEGOTIABLE SECURITIES SENT UNDER AIR BILL" is an endorsement to the Commercial Inland Marine Mail Coverage Form (CM 00 60). Its primary purpose is to extend the coverage provided by the Mail Coverage Form to include direct physical loss or damage to negotiable securities. This extended coverage specifically applies when these securities are shipped via an air bill issued by an air carrier that is named in the policy's declarations.

Classes of business it applies to

This endorsement is typically used by financial and fiduciary organizations that are eligible for and utilize the Mail Coverage form. This includes entities such as:

• Banks and bankers
• Trust companies
• Insurance companies
• Security brokers
• Investment corporations whose business is primarily fiduciary in nature
• Corporations that act as their own security transfer agents or registrars

Real-world examples:

• A commercial bank sending a batch of stock certificates to a brokerage firm using a designated air freight service.
• An investment management company shipping bond certificates to a custodian via a named airline carrier.

Special considerations

There are several important conditions and limitations to be aware of when using this endorsement:

• Geographic Limitation: Coverage for securities sent under an air bill applies only to shipments between places within the continental United States. Shipments to or from Alaska or Hawaii are typically excluded under this endorsement.
• Value Declaration: The insured is required to declare the actual value of the negotiable securities to the air carrier at the time of shipment. This declared value must not be less than the market value of the securities on the date they are sent.
• Named Carrier: The air carrier used for shipping the securities must be specifically named in the declarations page of the insurance policy for coverage to apply.
• Underlying Form: This endorsement modifies the Mail Coverage Form (CM 00 60). All other terms, conditions, and exclusions of the Mail Coverage Form remain applicable unless specifically amended by this endorsement.

Key information for agents and underwriters

Agents and underwriters should consider the following when dealing with this endorsement:

• Risk Assessment: Key factors in underwriting include the types and typical values of negotiable securities being shipped, the frequency of such shipments, the specific air carriers being utilized, and the security measures and loss history associated with those carriers.
• Declarations Accuracy: It is crucial to ensure that the air carriers the insured intends to use are accurately and explicitly named in the policy declarations. The limits of insurance for shipments made under this endorsement should also be clearly defined.
• Valuation Compliance: Agents should emphasize to the insured the importance of complying with the requirement to declare the full actual market value of the securities to the air carrier. Failure to do so could potentially lead to claim disputes or inadequate coverage in the event of a loss.
• Coverage Scope: This endorsement is specific to negotiable securities sent via an air bill with a named carrier. It does not automatically cover other types of property or shipments made through other means (e.g., regular mail, other courier services not declared). Ensure clients understand any potential gaps and if other endorsements (like CM 60 08 for Transfer Agents Mail or CM 60 10 for Securities Sent by the Treasury Department) might be necessary.
• Pricing Considerations: The premium for this endorsement will be influenced by factors such as the agreed limits of liability, the nature and value of the securities, the volume of shipments, and the risk profile of the declared air carriers.