Key Takeaways
- Inland marine insurance protects movable property over land from loss or damage.
- It covers goods transported by truck or train, not by sea.
- Inland marine insurance is often called a floater policy because it covers property that moves.
- Businesses may need this insurance for equipment at job sites not covered by commercial policies.
- Inland marine policies typically have deductibles and exclude certain damages, like floods.
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Inland marine insurance protects businesses that transport movable property over land, including equipment, machinery, tools, and cargo. Unlike ocean marine insurance, which covers shipments over water, inland marine insurance focuses on items that travel by truck, train, or other land routes.
This coverage is important for companies and protects their assets, especially if their properties are away from their main location. Learn more below about inland marine insurance.
Detailed Overview of Inland Marine Insurance Coverage
Inland marine insurance covers damage by a covered peril to movable property like tools, equipment, and building materials. It also covers high-value items that aren’t adequately insured (or aren’t covered at all) under your commercial property or business owners policy. An example is a bulldozer valued at $150,000 that your business uses at construction sites.
Inland marine insurance may cover “all-risks” or named perils. An all-risk policy covers damage caused by any peril not specifically excluded. It’s broader than a named-perils policy, which covers only the perils listed in the policy.
Inland marine policies also vary in how they value damaged or destroyed property. Some policies pay losses based on the replacement value of the property at current prices without considering depreciation. Others base the payment on the property’s actual cash value, which includes a deduction for depreciation.
Fast Fact
Commercial property policies mainly cover property at your business premises. Most provide little or no coverage for property at other locations, such as job sites.
What Does Inland Marine Insurance Not Cover?
While inland marine policies vary, many exclude damage caused by insects, wear and tear, mold, floods, and earthquakes. Many also exclude vehicles, stationary property that remains at your business premises (like desks and cabinets), property shipped by sea or air, and property damage that occurs before an item is shipped.
Types of Inland Marine Insurance Policies
There are many kinds of inland marine insurance, each designed to cover a specific type of property. Here are some examples.
- Contractor’s equipment floater: This covers loss, damage, or theft of a contractor’s equipment or tools wherever the loss occurs, including at the contractor’s business premises, at a job site, or while in transit.
- Electronic data processing (EDP) insurance: This protects businesses against loss or damage to desktop computers, mainframes, laptops, tablets, and other equipment used to process or store data. Policies cover damage caused by a range of perils, including fire, floods, theft, and electrical disturbances.
- Bailee insurance: This covers your business’s liability for damage to customers’ property in your care for service, repair, and storage. The term “bailee” means custodian. Businesses that need this coverage include dry cleaners, computer repair services, and pet boarding operators.
- Accounts receivable insurance: This protects your business from financial losses caused by damage or destruction of your accounts receivable records by a covered peril or your customers’ failure to pay invoices.
- Installation floater: This protects contractors against theft, damage, or destruction by a covered peril of equipment, materials, or supplies while in transit or awaiting installation at a job site.
Fast Fact
Because inland marine insurance covers property that moves from place to place, it’s often called a floater policy. Coverage goes wherever the insured property is.
Inland Marine Insurance: Limits and Deductibles Explained
An inland marine policy may include scheduled limits, blanket limits, or a combination of the two. A scheduled limit applies to a single item, while a blanket limit applies to a group of items. When you buy inland marine insurance, you might choose specific limits for your most valuable items and a blanket limit for your remaining property.
For instance, you might select a $150,000 specific limit for your new bulldozer and a $35,000 blanket limit for your tools and other property. When a loss occurs, the most your insurer will pay is the limit (scheduled or blanket) that applies to the damaged property.
Fast Fact
Most inland marine policies include a deductible, such as $1,000 or $2,500. The deductible is your out-of-pocket cost for each claim.
Does My Business Need Inland Marine Insurance?
Your business may need inland marine insurance if you ship property over land by train or truck or if you transport equipment to jobs sites. You also may need inland marine insurance to cover property that isn’t adequately covered (or not covered at all) under your commercial property policy.
For instance, while many commercial property policies cover computers, they exclude damage caused by power failures and equipment breakdown.
Why Is It Referred to as ‘Inland Marine’ Insurance?
Inland marine insurance gets its name from ocean marine insurance, from which it’s derived. While ocean marine insurance covers goods transported by sea, inland marine insurance covers goods transported by truck or train. Inland marine insurance protects businesses from loss or damage to property as it travels over land from its place of origin to its final destination.
What Are Examples of Inland Marine Insurance 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 Insurance the Same as General Liability Insurance?
No, inland marine insurance and general liability insurance aren’t the same thing. Inland marine is a type of property insurance. It protects your business from financial losses caused by physical damage to equipment, tools, and other movable property. General liability insurance covers claims by your customers or other third parties for bodily injury or property damage arising from accidents caused by your negligence.
The Bottom Line
Inland marine insurance protects movable property that isn’t covered under standard commercial property policies. It’s designed for businesses that transport or use valuable items away from their main location, such as tools, equipment, or materials. It ensures that property is protected during transit or at temporary sites, making it essential for industries like construction, logistics, and repair services.
