What Does an Inland Marine Policy Cover?

Inland marine insurance provides specialized property protection for items that are mobile, unique, or frequently in transit. This type of coverage addresses gaps often found in standard property insurance policies, which typically focus on property at a fixed location. It safeguards assets that are regularly moved, are of high value, or possess characteristics that make them unsuitable for traditional coverage. It extends protection beyond a stationary building, offering financial security for property wherever it may be.

Core Characteristics of Inland Marine Insurance

Inland marine insurance originated from ocean marine coverage, which protected goods transported across seas. As commerce evolved and transportation shifted to land-based methods, the need arose for similar protection for property moving overland. This led to the development of inland marine policies, whose primary function is insuring property not confined to a single, fixed location.

A defining feature of inland marine insurance is its flexibility, often structured as an “all-risk” policy. This means it covers all causes of loss unless a specific exclusion is listed within the policy. This broad coverage contrasts with “named perils” policies, which only cover losses caused by risks explicitly stated. Inland marine policies can be tailored to diverse needs, covering property at various temporary locations, during transit, or while stored off-site.

These policies are well-suited for “movable property” and “property of an unusual nature,” which standard commercial property insurance might not adequately cover. For example, equipment frequently moved between job sites or valuable art pieces on exhibition require this specialized protection. The insurance follows the property, providing continuous coverage regardless of its temporary whereabouts.

Property Types Covered

Inland marine policies protect a wide array of mobile, valuable, or unique property types.

Contractors’ Equipment

This includes tools, machinery, and heavy equipment used by construction companies. This equipment is frequently moved between various job sites, making it vulnerable to theft, damage, or loss during transit or temporary storage. Coverage typically extends to items like excavators, scaffolding, generators, and hand tools.

Builders’ Risk Insurance

This specific type of inland marine policy is tailored for structures under construction. It covers the building itself, along with materials and equipment at the construction site, from the ground up until completion. This coverage protects against perils such as fire, windstorm, vandalism, and theft of materials, which are common risks during the building phase.

Fine Art and Collectibles

This includes valuable paintings, sculptures, antiques, rare books, and other unique collections. These items often have significant monetary and sentimental value. Inland marine coverage for fine art protects against damage, theft, or loss, whether the items are at a permanent location, in transit, or on loan for display.

Computer and Data Equipment

This includes servers, laptops, specialized IT equipment, and data itself. Businesses that rely on mobile technology or have remote employees may find standard property policies insufficient for protecting these assets when off-premises or in transit. Inland marine coverage protects against physical damage, theft, or power surges outside the main business location.

Musical Instruments

These instruments are frequently transported to performances, rehearsals, or recording studios. Coverage extends to damage, theft, or loss during travel. This specialized protection often covers accidental damage not covered by a standard homeowner’s policy.

Jewelry and Furs

These high-value personal items frequently exceed the limits of a standard homeowner’s policy. Inland marine coverage provides broader protection for these items, whether worn, stored at home, or traveling. It covers losses due to theft, mysterious disappearance, or accidental damage.

Communications Equipment

This includes broadcast towers, satellite dishes, and related electronic systems. These large, often exposed structures are vulnerable to severe weather, vandalism, or other external forces. Dedicated inland marine coverage ensures their protection.

Goods in Transit

Commonly referred to as cargo, these are protected when being shipped by land-based methods like truck, rail, or air. This coverage protects against damage or loss of inventory while it is being transported between locations. It safeguards the financial value of goods during their journey.

Other Unique or Movable Property

This broad category encompasses a diverse range of items, from specialized medical equipment that travels between clinics to unique displays used at trade shows. If an item is valuable, mobile, or subject to specific risks due to its nature or use, an inland marine policy can be customized to provide the necessary protection.

Perils and Limitations

Inland marine policies are often “all-risk,” meaning they cover all perils unless specifically excluded. Common perils typically covered include theft, fire, windstorm, collision during transit, vandalism, and other forms of accidental damage. This broad scope ensures property is protected against a wide range of unforeseen events, whether on a job site, in a warehouse, or in transit.

Despite their comprehensive nature, inland marine policies contain specific limitations and exclusions. Common exclusions often include wear and tear, which is gradual deterioration, and inherent vice, a defect within the property itself causing damage. Losses from intentional acts, war, or nuclear hazards are also typically excluded.

Some policies may exclude perils such as flood or earthquake unless specific endorsements are added. Policyholders should review their specific policy language to understand what is and is not covered.

Tailoring Your Inland Marine Policy

Customizing an inland marine policy involves several key considerations.

Scheduled vs. Blanket Coverage

Scheduled coverage involves listing each individual item to be insured, along with its specific value. This provides precise protection for high-value or unique assets, such as fine art collections or specific heavy equipment.

Blanket coverage insures a category of property up to a single, aggregate limit without listing each item individually. This method is suitable for numerous items, those with fluctuating values, or those frequently replaced, such as a contractor’s smaller tools or a company’s inventory in transit.

Valuation Method

The valuation method used for claims is another important element. Actual Cash Value (ACV) pays the replacement cost minus depreciation, reflecting current market value. Replacement Cost Value (RCV) pays the cost to replace the damaged or lost item with a new one of similar kind and quality, without depreciation. RCV typically results in a higher payout but also comes with a higher premium.

Deductibles and Scope

Deductibles represent the amount the policyholder must pay out-of-pocket before coverage begins. Selecting a higher deductible can lower the premium, while a lower deductible results in a higher premium but reduced out-of-pocket costs. The geographic scope can also be adjusted, with some policies covering specific regions, while others offer worldwide protection. Policy endorsements add or modify coverage for specific needs.