Boiler and Machinery Insurance

The boiler and machinery lines are two of the basic coverages comprising the casualty insurance field. While they do not produce a premium volume of such size as automobile liability and workmen's compensation, they are nevertheless of considerable importance, and have been given wide acceptance by the general public for many years. To date the proceedings of the Casualty Actuarial Society have not contained any papers or discussions relating to this type of insurance. The most probable reason for the neglect of these lines of insurance by this society is that boiler and machinery insurance have been considered by most people to be the exclusive domain of the engineer. While it is perfectly true that a competent engineering staff is essential to the successful underwriting and inspection of boiler and machinery objects, it will not be amiss for the actuary and statistician to become familiar with these fields of insurance, and to study the ratemaking and statistical procedures that are involved. It is the intent of this paper to outline very briefly the coverage and rating of boiler and machinery objects, to review the ratemaking method used in the recent manual revision, and to suggest a few points in the rating procedure which seem to offer possibilities for further investigation.