Inland Marine Insurance covers goods, tools, equipment, and other property not tied to a fixed location.
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When it comes to protecting business property, companies generally look to a commercial property insurance policy to provide the coverage they need. However, commercial property policies often exclude a variety of property that isn’t specifically fixed in place at your business premises. For companies looking to completely protect all of their property, whether it’s a palette of inventory being trucked to a warehouse or a set of specialized construction equipment that’s moved from job site to job site, it’s critical to consider Inland Marine Insurance.
Table of Contents
- What is Inland Marine Insurance?
- Why is it called “Inland Marine” Insurance?
- What does Inland Marine Insurance cover?
- What risks are covered by Inland Marine Insurance?
- Types of Inland Marine Coverages
Inland Marine Insurance is a form of property insurance that covers goods, tools, equipment, and other property that is not tied to a fixed location and is not covered by a standard commercial property policy. Despite the name, Inland Marine Insurance doesn’t have anything to do with insuring boats stored on land.
Inland Marine Insurance provides coverage for a variety of property, including merchandise you ship by truck to a customer, equipment used by construction contractors, musical instruments, photography equipment, fine art, and more. Inland Marine Insurance provides broad coverage for property that helps fill the gap in coverage left by standard commercial property policies.
- Your logistics company is transporting pharmaceutical products via a refrigerated truck from the manufacturer to one of your storage facilities. During transport, the refrigeration malfunctions, causing the pharmaceuticals to be exposed to extreme heat and voiding the product. Your Inland Marine Insurance would cover the damages.
Hundreds of years ago, ocean shipping was the primary means of transportation for goods. Shippers needed a way to insure their goods against loss or damage as it crossed the ocean, so ocean marine insurance was created. These insurers offered “all-risk” policies that covered almost any cause of loss for this cargo.
Over time, railroads and highways allowed goods to be shipped more cheaply over land, and population centers developed farther away from port cities. The insurance companies offering ocean marine insurance began to insure these goods as they traveled on trucks, trains, and river barges. This new coverage was called “inland marine.”
Inland Marine Insurance grew to cover all sorts of products, merchandise, equipment, and other property that moves around to different places and is not covered under standard commercial property policies. Although times have changed, insurance companies still retained the historical name “Inland Marine Insurance.”
Inland Marine Insurance protects your property regardless of where it is located. This is in contrast to commercial property insurance, which may have limited coverage for damage or loss to your property that occurs when it is not on your business premises.
Your existing business owner’s policy or commercial package policy may provide sufficient protection for limited amounts of property that are taken offsite. For example, tools and equipment that travel with an employee to a nearby job site may be covered if they are valued under a certain amount. However, if you have high-value equipment or goods that are being shipped or that move around, you may need Inland Marine Insurance.
Some types of property that can be covered by Inland Marine Insurance include:
- Property that is being moved or transported. This might include a shipment of merchandise or a photographer’s specialized equipment.
- Property you’re holding for someone else. A computer repair store might need Inland Marine Insurance to cover their customers’ computers while they are being repaired.
- Property installed in a vehicle. The video broadcasting equipment installed in a news van can be covered by Inland Marine Insurance, as it may not be covered under commercial auto insurance. However, the van itself would only be covered by commercial auto insurance.
- Property that moves from place to place. This may include construction equipment that is used at different construction sites.
- Fixed property that can be used for transportation or communication. This property includes bridges, piers, pipelines, transmission lines, and radio towers.
Inland Marine Insurance is offered on either an all-risk basis or a named perils basis. All-risk policies cover any cause of loss other than those that are specifically excluded by the policy. Named perils policies only cover those risks specifically named in the policy.
Commonly covered named perils include:
- Fire or lightning
- Theft or vandalism
- Damage from vehicles or airplanes (excluding those owned by the business)
- Water damage, sprinkler leakage, or burst pipes (but water damage from flood is excluded)
- Windstorm or hail
- Smoke from accidental fire
- Riots or civil commotion
- Sinkhole collapse or building collapse
However, every insurance contract covers different perils, so it is important to read your contract and discuss with your agent or insurance company.
All-risk policies are usually more expensive than named perils policies, but they provide greater protection for your property. Usually, Inland Marine Insurance all-risk coverage has fewer exclusions compared with a standard all-risk or open perils commercial property coverage.
Shipping and Transit
For a manufacturer, wholesaler, or retailer, Inland Marine Insurance can provide financial protection for your goods while they are in transit to a customer or between your distribution center and your retail outlet. Inland Marine Insurance is appropriate for covering any type of high-value merchandise that is being shipped.
The installation floater covers materials and products from the moment they are loaded on a truck up until they are installed for use. This coverage can be useful for items such as:
- Communication and networking equipment
- Medical and scientific equipment
- Construction materials
- Solar panels and wind turbines
The motor truck cargo coverage can protect a trucker carrying goods or property for a client. This coverage will insure the client’s property while in the possession of the trucker. Note that motor truck cargo only covers the actual cargo. It does not protect the truck itself. To protect the truck, commercial auto insurance is required.
Bailee’s Customer Coverage
Bailee’s customer coverage protects property that is temporarily in your possession for a benefit of a client. It can cover a variety of businesses including:
- Jewelers and pawn shops
- Computer repair services
- Furniture repair stores
- Watch and lock repair
- Dry cleaners
- Storage facilities
- Veterinarians and pet hotels
- Businesses that offer valet service
Movable Equipment or Property
Inland Marine Insurance can protect property or equipment that regularly moves around or that is normally used on client job sites. This property is protected wherever it is located, whether it is stored on your business property, in transit, in storage, or on a job site. Examples of property that can be covered include:
- Computer equipment including servers and laptops
- Photography, cameras, and movie equipment
- Musical instruments
- Catering equipment
- Cleaning equipment such as a power floor cleaner
- Tradesperson’s or repair person’s tools and equipment
- Trade show booths
- Pet grooming equipment
- Vending machines
- Salesperson’s samples
- Contractor’s equipment such as bulldozers and tools
- Cooking equipment stored in food trucks
For construction industry businesses, Inland Marine Insurance also offers builder’s risk coverage which provides coverage for buildings in progress before they are completed. This coverage can include protection for materials stored at a building site while construction is in progress, as well as partially completed and temporary structures.
Inland Marine Insurance can also financially protect artworks when they are on exhibit, in transit, or on loan.
Instruments of Transportation or Communication
Some fixed infrastructure is also covered under Inland Marine Insurance when it is an instrument of transportation or communication. This includes:
- Cellular towers
- Radio broadcasting towers
Businesses looking to protect and insure their property commonly look to commercial property insurance to provide coverage. However, standard commercial property policies typically exclude coverage for property that isn’t housed at your business premises. This gap in coverage can be addressed through Inland Marine Insurance, which protects a broad range of property, including goods or inventory in transit, equipment or tools that are moved to job sites, or even artwork on display at an exhibition. If your business owns high-value property that may be housed or transported away from your business premises, consider investing in Inland Marine Insurance to provide protection against damage or loss.