What Does Inland Marine Insurance Cover?

Inland marine insurance is a specialized form of property coverage that protects movable property and goods. Despite its name, this insurance primarily covers property transported over land or stored at temporary locations. It addresses unique risks for assets not confined to a fixed location, offering financial protection where standard policies have limitations.

Understanding Inland Marine Coverage

Inland marine insurance developed from ocean marine insurance, which traditionally covered goods transported by sea. As commerce expanded and land transportation became common, similar protection was needed for property in transit on land. The term “marine” remained as a historical reference, even though coverage evolved to encompass a wide range of land-based risks. The Nationwide Marine Definition, adopted in 1933, standardized the types of property eligible for this coverage.

Inland marine insurance covers movable property, property in transit, or property not at a fixed location. It also covers unusual property not adequately covered by standard policies. This flexibility leads to many inland marine policies being called “floaters,” meaning coverage “floats” with the property, protecting it wherever it is located. This is beneficial for businesses or individuals whose valuable assets are frequently moved or used off-premises.

Inland marine policies are commonly written on an “all-risk” basis, providing broad coverage for any cause of loss unless specifically excluded. This differs from “named perils” policies, which only cover losses caused by explicitly listed perils. While “all-risk” coverage is extensive, common exclusions include war, nuclear hazard, or certain natural disasters. Additional coverage can often be purchased for these.

General Principles of Inland Marine Coverage

Inland marine insurance extends its protection to various categories of property and situations that involve mobility or unique characteristics. These principles define the scope of what this specialized coverage addresses, filling gaps left by traditional property insurance.

Property in transit is a primary focus of inland marine coverage. This includes goods, materials, or equipment being transported over land by truck, train, or other means. Examples range from construction equipment moving between job sites to fine art being shipped for exhibition, or salespersons’ samples carried on the road. This protects assets during transportation.

Another category involves property held by bailees, which is property belonging to others but temporarily in the insured’s care. Businesses such as dry cleaners, repair shops (including jewelry, computer, or furniture repair), and storage facilities commonly fall into this category. Inland marine coverage for bailees protects against damage, loss, or theft of customer property while in the business’s temporary possession.

Coverage also extends to unique or valuable property not adequately insured under standard policies due to its high value or specialized nature. This includes items like fine art, jewelry, furs, musical instruments, and photography equipment. Valuable papers and records, such as wills or blueprints, can also be covered.

Property not at a fixed location, including tools and equipment regularly moved between job sites, represents another core principle. This category often applies to contractors’ equipment like bulldozers, cranes, and hand tools, as well as mobile medical equipment or the contents of a food truck. Inland marine ensures continuous protection for these assets, regardless of their temporary placement.

Finally, instrumentalities of transportation and communication are covered by inland marine policies. This includes fixed properties that facilitate movement or communication, such as bridges, tunnels, pipelines, and radio or television towers. Though stationary, their direct role in transportation or communication qualifies them for this coverage.

Key Types of Inland Marine Policies

Inland marine insurance encompasses various policy types, each designed for unique risks associated with movable or specialized property.

Builders Risk Insurance

Builders Risk Insurance covers structures and materials during new construction or renovation projects. It is typically needed by general contractors, property owners, and engineers. It protects the building under construction, as well as materials, supplies, and equipment on-site or in transit to the site, against perils such as fire, wind, vandalism, and theft. Some policies may also cover “soft costs” like architect fees or debris removal.

Contractors’ Equipment Floater

A Contractors’ Equipment Floater provides coverage for tools, machinery, and equipment used by contractors and other tradespersons. This policy suits businesses that frequently move equipment between job sites, protecting assets from hand tools to heavy machinery. Coverage protects against damage or theft in transit, at job sites, or other off-premises locations.

Motor Truck Cargo Insurance

Motor Truck Cargo Insurance is designed for commercial truckers and logistics companies transporting goods for others. This policy covers the freight or goods being hauled against loss or damage due to various risks, including theft, fire, collision, and natural disasters. It can also cover associated costs like debris removal or legal expenses. Many clients require carriers to have this coverage.

Scheduled Personal Property Floater

A Scheduled Personal Property Floater is an endorsement or standalone policy for individuals with high-value personal items that exceed typical homeowners’ or renters’ insurance limits. This policy allows specific items like jewelry, fine art, furs, musical instruments, and collectibles to be listed for their appraised value. It offers broader “all-risk” coverage, including accidental damage and mysterious disappearance, and provides worldwide protection.

Computer and Electronic Data Processing (EDP) Equipment Coverage

Computer and Electronic Data Processing (EDP) Equipment Coverage protects electronic devices and the data they contain. Businesses relying heavily on technology, especially with mobile or off-site equipment, benefit from this policy. It covers hardware like computers, servers, and networking devices, as well as software and data stored on various media. Coverage typically extends to perils like power surges, mechanical breakdown, computer viruses, and hacking, protecting assets on or off premises.

Bailees’ Customers Policy

A Bailees’ Customers Policy is for businesses that temporarily possess customers’ property for services like repair, cleaning, or storage. Examples include dry cleaners, auto repair shops, and storage facilities. This policy covers damage or loss of customer property while in the insured business’s care, whether on premises, in storage, or in transit. Covered perils often include fire, flood, theft, and traffic accidents.

Exhibition/Fine Art Floater

An Exhibition/Fine Art Floater provides specialized coverage for art and exhibits, including paintings, sculptures, and collections. This policy is essential for museums, art galleries, private collectors, and businesses that transport or display valuable art. It protects against damage, theft, or loss while the art is on display, on loan to other institutions, or in transit. Often “all-risk,” coverage typically values items at an agreed-upon amount.

How Inland Marine Differs from Other Insurance

Inland marine insurance occupies a distinct space in the insurance landscape, serving as a complement to other common insurance types. Its primary distinction lies in its focus on mobile property, property in transit, or property not at a fixed location, addressing risks traditional policies often exclude or limit.

Commercial property insurance typically covers buildings, fixed assets, and business personal property at a specific, permanent address. This coverage is limited to the insured premises and often has restricted or no coverage for property once it leaves that location or is transported. Inland marine insurance fills this gap by protecting movable equipment, inventory, and materials when they are away from the main business site, whether at a temporary job site, in storage, or in transit.

Homeowners’ or renters’ insurance policies cover personal belongings but commonly impose sub-limits on high-value items like jewelry, fine art, or collectibles. These policies may also offer limited protection for personal property away from the insured residence, or may only cover a narrow range of perils. Inland marine policies, often as scheduled personal property floaters, offer broader “all-risk” coverage for these high-value items, typically covering them at their appraised value and providing protection regardless of their physical location.

For businesses involved in transportation, motor truck cargo insurance stands apart from standard auto insurance. Commercial auto insurance primarily covers the vehicle itself, as well as liability for bodily injury or property damage that the vehicle may cause. However, commercial auto policies exclude coverage for the cargo being carried by the vehicle. Motor truck cargo insurance, an inland marine policy, covers goods or freight being transported, protecting against loss or damage to the cargo while in transit.