Inland Marine Coverage – An Insurance for Movable Property and Goods
In plain language: Inland marine is a type of business insurance that offers coverage for goods, equipment, and other types of movable property that are being transported over land, or are stored at a location other than the business’s primary premises.
Technical definition: Inland marine insurance is a specialty form of risk management that provides coverage for a variety of unique items and circumstances beyond the scope of traditional property insurance. It applies to property that is likely to be moved or transported, property temporarily held by someone other than the owner, and assets that are part of the “instrumentalities of communication and transportation.”
Imagine a construction company transporting a bulldozer to a job site, and halfway it gets stolen. In such situations, inland marine insurance comes to the rescue.
TL;DR
- Inland Marine is insurance for movable property.
- It plays a crucial role in covering goods or equipment while being transported.
- Many businesses overlook its importance, assuming their general business insurance will cover such losses.
- Educated businesses stand the chance to evade substantial financial threats by having inland marine coverage.
What Is Inland Marine Coverage in Insurance?
Diving deeper into the inland marine concept, it primarily covers products, materials, and equipment while being transported or stored on a location other than your main premises. Although the term “inland marine” might suggest it’s related to water-based transport, it’s not limited to that. It evolved from “ocean marine insurance,” which originally insured cargo and ships, and the coverage extended to goods once they were off the ship and in transit on land, as well.
The items covered by inland marine policies are often excluded from general commercial property coverage because they have a high mobility or unique value, such as mobile medical equipment, musical instruments, or rare coins. It also caters to property housed on other’s premises or transported goods, which falls under “property in transit” or mobile equipment category.
Importantly, inland marine insurance covers are customized to the specific needs of a business, which is why understanding the nuances is paramount for both agencies and clients.
Key Related Terms to Know
- Floater Policy – A policy which covers property that is easily movable and provides coverage wherever the items are.
- Movable Property – Any assets not attached to land or a building, and can be moved from location to location.
- Property in Transit – Goods or property being transported from one location to another by a vehicle.
- Scheduled Items – Specific items or types of property listed in an inland marine policy that are covered.
- Instrumentalities of Communication – Properties like bridges, roads, and communication towers that facilitate communication and transportation.
Common Questions About Inland Marine
What are the types of risks covered by inland marine insurance?
Inland marine insurance covers a wide range of circumstances depending upon the nature of the business. This could range from a photographer losing his camera to a crane being damaged at a construction site.
Who should consider purchasing inland marine insurance?
Businesses that have property regularly in transit, temporarily stored at a location other than the primary location, or have unique or valuable property that traditional property insurance doesn’t cover.
How does inland marine insurance relate to ocean marine insurance?
While ocean marine insurance covers goods and vessels at sea, inland marine insurance takes over coverage once goods are unloaded from the ship and cover them during transportation, installation, or storage on land.
What is an installation floater?
An installation floater covers materials from the time they are loaded onto a vehicle for transport until they are accepted by the purchaser or installed and used. It’s beneficial for items such as HVAC units or large appliances being transported for installation.
Inland Marine vs. Commercial Property
While both inland marine and commercial property insurance cover businesses from damage or loss to their property, they differ significantly in the type of property they cover. Inland marine coverage tends to focus more on movable property or goods in transit, whereas commercial property insurance typically applies to stationary property.
Comparison Area | Inland Marine | Commercial Property
|
Primary use case | Covers movable property | Covers stationary property |
Coverage/concept type | Specialty coverage | Main coverage |
Typical exclusions | Stationary property | Movable property |
Who is most affected by errors | Businesses with high-value movable assets | All businesses |
Common mistakes | Underestimating the value of movable property | Overlooking movable assets |
Real Claim Examples Involving Inland Marine
Scenario 1: A local photographer was hired for a destination wedding. While transporting the equipment, his car got crashed, damaging his high-end cameras and lenses. Luckily, he had inland marine coverage, which helped him quickly replace the damaged equipment.
Scenario 2: A construction company was transporting a piece of heavy machinery to the new site. Midway, the machinery was stolen from the parked trailer. Thanks to the inland marine policy, they were able to recover the loss.
Scenario 3: A specialized medical diagnostic machine being transported to a health facility was damaged en route due to improper handling. As the machine was listed in the inland marine policy’s “scheduled items,” the healthcare facility was reimbursed for the loss.
Limitations and Common Mistakes
Beware of these pitfalls:
- Believing stationary property is covered.
- Overlooking the declaration of all items to be covered under the policy.
- Retailers assuming regular business insurance will cover goods in transit.
- Ignoring the need for inland marine when leasing expensive equipment.
How to Explain Inland Marine to Clients
Personal Lines client “Inland marine insurance is like a safety net for your valuables when they’re away from home. For example, if you’re a musician and your expensive instruments get stolen during a tour, this policy would cover the loss.”
Small Business owner “Inland marine policy is a special type of business insurance that can safeguard your movable equipment or goods during transportation or storage. So, if your construction equipment is stolen from the job site, this policy will cover the loss.”
CFO or Risk Manager “Inland marine is a customizable policy tailored to cover specific movable assets and goods in transit of your enterprise. This can extend from expensive machinery to unique artifacts. It provides a financial cushion against transportation risks, theft, or unforeseen damage.”