Inland Marine Insurance 101
A guide to the who, what, and why’s of Inland Marine Insurance.
What is Inland Marine Insurance?
Inland marine insurance will cover business property that moves over land or is stored away from the business property. You can also cover certain specialized items that traditional property insurance doesn’t cover.
How Does Inland Marine Insurance Differ from Commercial Property Insurance?
Most small businesses hold their property in one location – supplies in the back office, the store of your shop, or the equipment at your warehouse. This property is usually protected through commercial property insurance. But what happens when these items are regularly mobile or if it consists of specialized equipment or property? That’s when you need to consider inland marine insurance. This coverage add-on will ensure you’re covered when transporting your assets.
If your business model revolves around transporting or storing your property away from your primary location, inland marine coverage should be a part of your commercial insurance package. In this article we will discuss what inland marine insurance covers, the typical costs associated, and where you can learn more about coverage options.
Do I need Inland Marine Insurance?
If you have substantial assets, you should already hold a commercial property insurance policy – if you don’t, you need to get a policy as soon as possible. This coverage will protect your property that is stored at a fixed business location. For example, if a fire were to break out, the property is vandalized, or a pipe bursts and floods on-site, commercial property insurance would come to your rescue to help recoup costly repairs.
Commercial property insurance covers assets that are stored at a permanent business location. For example, if someone vandalizes your shop window, or if a fire burns down your back office, commercial property insurance would provide protection.
However, let’s say you’re transporting inventory between two different business locations. If the truck bed malfunctions and your stock falls out and gets damaged, standard commercial property insurance won’t provide coverage. Similarly, if you have certain highly valuable or unique types of property, traditional property insurance might have an exclusion. That’s why you need Inland Marine Coverage.
What Does Inland Marine Insurance Cover?
Inland marine insurance can typically be purchased as a stand-alone policy or added as an endorsement to a traditional property policy or business owner’s policy (BOP). The specific coverages can vary based on your insurer and the type of business you have.
In general, inland marine insurance includes the following:
- Property in transit: This is the property that you transport over land from one location to another.
- Property on movable vehicles: For example, an inland marine policy would cover the cooking equipment and raw ingredients that are stored in a food truck.
- Property stored off-site: This includes items or equipment that you keep at a warehouse or storage facility.
- Property that provides the means of transportation: Inland marine insurance can cover businesses that own bridges, roads, or communication towers.
In addition to the above, inland marine policies can also provide custom coverage for the specific property. For example, Veterinarians might need to transport live animals to a clinic, vending machine owners’ store machines long-term on other people’s property, contractors may need to store their property off-site while working on a project. Inland marine insurance can provide coverage in all of these situations.
Your inland marine policy might differ based on exactly which risks you’re insuring against and what type of business you have. For example, inland marine insurance is called “bailee’s customer insurance” in instances where you are transporting a customer’s property. A “builder’s risk policy” covers construction tools and machinery kept at job sites and storage yards.
Inland marine insurance covers losses resulting from the same events that trigger standard property insurance. For example, most inland marine policies cover fires, certain types of weather damage, vandalism, and theft.
What Doesn’t Inland Marine Insurance Cover?
It’s important to carefully read your inland marine insurance policy and speak with your agent to truly understand what your policy includes so that you know what’s included and excluded.
Typically, the following are excluded from inland marine insurance:
- Stationary property: This is covered by standard commercial property insurance.
- Vehicles: To cover vehicles that you use for business purposes, you need to purchase commercial auto insurance. However, inland marine insurance can protect the contents inside your vehicle.
- Earthquake and flood damage: Businesses in earthquake or flood zones should purchase separate commercial flood insurance or commercial earthquake insurance.
- Property transported by sea or air: In these cases, you would need ocean marine insurance or air cargo insurance, respectively.
- Property damaged before shipment: Inland marine insurance typically only covers damages or losses in transit (unless you have a specific policy such as an art dealer policy).
Your inland marine insurance can either be an “all-risk policy” or a “named-peril policy.” In an all-risk policy, all types of losses are covered unless they are specifically excluded. A named-peril policy offers narrower coverage because only the specific types of losses listed are covered.
Inland marine coverage is essential for the following types of businesses:
- Freelancers who travel between job sites
- Construction businesses
- Food truck vendors/caterers
- Business owners who attend trade shows, exhibitions, and conventions
- Businesses that ship raw materials or finished goods over land areas
- Businesses that have specialized property types, such as veterinarians who transport animals or art dealers who store artists’ work
Most of the time, when the property goes farther than 1,000 feet from your property, inland marine policies kick in. If your business property were to be damaged or stolen while say, at a trade show, that property likely is not located within 1,000 feet of your property policy’s ‘described premises.’ You would need inland marine coverage to compensate you for the loss.
The name ‘inland marine insurance’ can be confusing for business owners. Despite the word ‘marine,’ this coverage has nothing to do with the ocean or waterways. If you transport products over water domestically or internationally, you actually need ocean marine insurance. Businesses that transport property by air would need air cargo insurance. Some insurers offer a comprehensive commercial cargo policy that insures against all three types of transit — land, sea, and air. Inland marine insurance only protects property that is transported over land or stored on land away from your primary business premises.
How much Inline Marine Coverage do I need?
Coverage needs vary for each specific business model – so it’s best to speak with a licensed agent to break down your commercial property needs. Our team is here to help you understand your coverage and protect your company from a catastrophic loss. Get in touch with one of our agents today to learn more about Inland Marine Insurance.