What Is Inland Marine Insurance And How It Works

Inland marine insurance protects your company against loss or damage to equipment, machinery, merchandise, or other property transported by land. It covers property used on a job site, stored in a warehouse, or transported by train or truck. Inland marine is a subset of ocean marine insurance that protects property moved by sea.

• Inland marine insurance covers equipment, tools, and other property you use at a job site, store at a warehouse, or move over land.
• Each type of inland marine insurance is designed to cover a specific type of property.
  Property inland marine insurance can include property such as construction machinery or computer equipment.
• Inland marine insurance is an offshoot of ocean marine insurance, which covers property transported by sea.
• You should consider buying inland marine insurance if you ship or use property away from your premises or own valuable items that aren’t adequately covered by your property policy.

What Does Inland Marine Insurance Cover?

Inland marine insurance protects against damage caused by a covered peril to moveable property such as tools, equipment, and building materials. It also protects high-value objects that are underinsured (or not protected at all) under your commercial property or business owners policy. An example is a $150,000 bulldozer that your company utilizes on construction projects.

Inland marine insurance protects against damage caused by a covered peril to moveable property such as tools, equipment, and building materials. It also protects high-value objects that are underinsured (or not protected at all) under your commercial property or business owners policy. An example is a $150,000 bulldozer that your company uses on construction projects.

Inland marine insurance also differ in how they assess damaged or destroyed goods. Some plans compensate losses based on the property’s replacement value at current prices, regardless of depreciation. Others base payments on the property’s real cash worth, which includes a depreciation deduction.

• What Inland Marine Insurance Doesn’t Cover

While inland marine plans differ, many do not cover damage caused by insects, wear and tear, mold, flooding, or earthquakes. Many also exclude automobiles, immovable property that remains on your business premises (such as desks and cabinets), material carried by sea or air, and property damage that occurs prior to shipment.

• Special Types of Inland Marine Insurance

There are various types of inland marine insurance, each designed to protect a certain sort of property. Here are a few instances.

• Contractor’s equipment floater: Covers the loss, damage, or theft of a contractor’s equipment or tools wherever it occurs, whether at the contractor’s business location, on the job site, or in transportation.
• Electronic data processing (EDP) insurance: Protects enterprises against the loss or destruction of desktop computers, mainframes, laptops, tablets, and other data processing and storage equipment. Policies cover damage caused by a variety of risks, including fire, water, theft, and power outages.
• Bailee insurance: Coverage Insures your company’s responsibility for harm to customers’ property while in your care for service, repair, and storage. “Bailee” implies custodian. Businesses that require this coverage include dry cleaners, computer repair businesses, and pet boarding operators.
• Accounts receivable insurance: Protects your company from financial losses caused by damage or destruction of your accounts receivable records by a covered risk, or your customers’ inability to pay invoices.
• Installation floater: Contractors are protected against theft, damage, or destruction of equipment, materials, or supplies while in transit or awaiting installation at a construction site due to a covered risk.

Tip: Because inland marine insurance protects property that moves from place to place, it is commonly referred to as a floater policy. Coverage extends wherever the insured property is.

• Limits and Deductible

An inland marine policy can have scheduled limitations, blanket limits, or a combination of the two. A planned limit pertains to one item, whereas a blanket limit applies to a collection of items. When purchasing inland marine insurance, you may select specific limits for your most valuable assets and a blanket limit for your remaining stuff.

For example, you may set a $150,000 specific limit for your new bulldozer and a $35,000 blanket limit for your tools and other assets. When a loss occurs, your insurer will only pay the limit (scheduled or blanket) applicable to the damaged property.

Note: Most inland marine policies have a deductible of $1,000 or $2,500. The deductible represents your out-of-pocket expense for each claim.

• Does My Business Need Inland Marine Insurance?

Inland maritime insurance may be required if your company ships items over land by train or truck, or if you transfer equipment to job sites. Inland marine insurance may also be required to cover property that is underinsured (or not covered at all) under your commercial property policy.

For example, many commercial property policies cover computers but exclude damage caused by power outages and equipment breakdowns.

• Why Is It Called “Inland Marine” Insurance?

The term “inland marine insurance” is derived from “ocean marine insurance.” Inland marine insurance covers products moved by truck or train, and ocean marine insurance covers items transported by ship. Inland marine insurance protects businesses against loss or damage to property while it travels over land from its point of origin to its destination.

What Are Examples of Inland Marine Claims?

• A landscaping company files a claim under its contractor’s equipment insurance for damage to a backhoe caused by a fire at a construction site.
• A clothing manufacturer files a claim with its accounts receivable insurer because it’s unable to collect on a $25,000 invoice from a customer who has declared bankruptcy.
• A solar contractor files a claim under their installation floater for the loss of solar panels stolen from a construction site while the contractor was on a lunch break.

Is Inland Marine the Same as General Liability?

No, inland marine and general liability insurance are not the same thing. Inland marine is a sort of property insurance. It covers your company from financial damages resulting from physical damage to equipment, tools, and other transportable property. General liability insurance protects you against third-party claims for personal injury or property damage caused by your negligence.

Bottom Line

Inland maritime insurance protects materials, equipment, products, and other property moved by land. It evolved from ocean marine insurance, which protects things moved by sea.

There are various sorts of inland marine insurance, and the type you require depends on the property you wish to insure. For example, to insure a bulldozer, you’ll need a contractor’s equipment floater, and accounts receivable insurance will protect your accounts receivable records.

Most commercial property policies include little or no coverage for transportable property. If you carry property away from your business location, you should look into inland marine insurance.