Inland Marine Insurance

Businesses often rely on transporting valuable equipment, products and materials over land. While many assume standard commercial property insurance provides adequate protection, some assets fall outside its scope. Inland marine insurance steps in, offering specialized coverage for property in transit or stored away from a fixed location.

Inland marine insurance covers property transported over land, stored off-site or moved between locations frequently. Unlike standard commercial property insurance, inland marine coverage extends to movable assets, often referred to as “floaters,” providing protection beyond the limits of static, location-based policies. Whether goods are shipped by truck or rail or even transported by a contractor’s vehicle, inland marine insurance addresses the risks involved.

This type of insurance evolved from early policies protecting ocean shipments, reflecting the complexities of modern commerce. As businesses expanded across borders and new land-based trade routes developed, insurers tailored coverage to keep up with evolving risks. Today, commercial inland marine insurance protects businesses from theft, damage and losses incurred during transit or while stored temporarily.

Inland marine insurance covers property types that move between locations or are stored off-site. Here are common coverages:

There are some risks that typically aren’t covered by inland marine insurance, including:

• Stationary property: Coverage for stationary buildings and contents typically falls under a commercial property policy.
• Normal wear and tear: Damages resulting from routine use, natural aging or gradual deterioration are not covered by inland marine insurance coverage.
• Intentional damage: Losses caused by intentional acts or fraudulent claims are excluded.
• Money and securities: Financial instruments are excluded and typically require specialized coverage.
• War and nuclear hazards: Damage caused by acts of war or nuclear incidents falls outside the scope of commercial inland marine coverage.

Businesses can consider several types of inland marine insurance, such as:

• Bailee’s customer coverage: This inland marine policy protects businesses holding customer property in their care. Dry cleaners, repair shops and storage facilities use this coverage to protect their clients’ assets against loss or damage.
• Contractor’s equipment insurance: Contractors rely on inland marine coverage to protect their heavy equipment, tools and machinery transported between jobs.
• Builder’s risk coverage: This policy protects buildings under construction, including materials and equipment on-site or in transit. Coverage extends to losses from theft, weather events and accidents.
• Fine arts coverage: Art galleries and collectors use this coverage to protect art during exhibitions, transit or while on loan.
• Motor truck cargo coverage: This policy shields carriers against loss or damage to cargo during transport. It is especially valuable for logistics companies moving goods across regions.
• Installation floater insurance: Businesses installing large machinery, HVAC systems or other significant equipment rely on marine insurance policies to cover items from delivery through installation.

Inland marine insurance offers essential protection across a range of scenarios:

1. Theft of contractor’s tools: A construction crew’s tools are stolen from a job site overnight. Inland marine insurance policies cover the cost of replacing these tools.
2. Damaged art in transit: A museum exhibit being transported to another city suffers damage due to an accident. Marine insurance policies cover the repair or replacement of the damaged pieces.
3. Technology loss during transport: An IT firm loses servers while shipping them to a data center. Inland marine coverage reimburses the value.
4. Stolen medical equipment: Mobile diagnostic equipment is stolen while en route to a clinic. Inland marine insurance protects healthcare providers from incurring significant losses.
5. Product loss during shipment: A retailer loses merchandise due to an accident during transit. Inland marine insurance policies cover the lost inventory.

General liability insurance covers claims related to bodily injury, property damage and advertising injury that occur on business premises or as a result of business operations. It focuses on third-party claims, such as customer injuries. In contrast, inland marine insurance provides coverage for assets in transit, at off-site locations or those that frequently change locations.

For example, inland marine insurance would cover tools stolen from a job site, while general liability might cover injuries sustained by a customer on-site. In some instances, businesses require both policies to ensure comprehensive protection.

Inland marine policies have coverage limits determined by the value of the insured property. These limits define the maximum payout the policyholder can receive in case of a covered loss. Factors influencing limits include the type of assets covered, their mobility and associated risks. A construction company may opt for higher limits to cover expensive machinery, while a retailer may require different limits for transporting goods.