What Does Inland Marine Insurance Cover?

Inland marine insurance covers property that is frequently in transit, movable, or considered an instrumentality of transportation or communication. This specialized property insurance evolved from ocean marine insurance to address risks for property moving over land or located at various sites. It fills gaps that standard property insurance policies typically do not cover for fixed locations. The coverage protects assets that do not remain at a single, fixed address, such as equipment moving between job sites or goods being shipped.

Types of Property Covered

Inland marine insurance protects diverse property types characterized by mobility, high value, or an integral role in transportation and communication. This includes items regularly moved between locations or those inherently movable. For example, contractors’ equipment like excavators, tools, and machinery, frequently transported to different job sites, requires coverage beyond a single fixed location.

Valuable items such as fine art, jewelry, and musical instruments often travel for exhibitions or performances, making them suitable for inland marine policies that “float” with the property. Property in transit, or cargo, whether by truck or train, also falls under this coverage, addressing shipping risks. This extends to property temporarily in the care, custody, or control of an insured, such as items left with a repair shop or a dry cleaner.

Beyond movable goods, inland marine insurance covers “instrumentalities of transportation and communication,” which are stationary properties facilitating movement or connectivity. Examples include bridges, tunnels, pipelines, and communication towers, which are integral to infrastructure.

Perils Covered

Inland marine insurance policies protect against a wide range of risks, often providing broad coverage for mobile or in-transit property. Many policies are written on an “all-risk” basis, meaning they cover loss or damage from any cause unless specifically excluded. This offers comprehensive protection. Other policies may be written on a “named peril” basis, limiting coverage to only those risks explicitly listed.

Common perils include theft, fire, windstorm, and other weather-related damages like hail, protecting against sudden and accidental physical loss. Risks associated with transportation, such as collision, derailment, or the overturning of a conveyance, are central to inland marine coverage. Accidental damage, mishandling, or misplacement of property are also common causes of loss that these policies address.

Specialized Inland Marine Policies

Several specialized inland marine policy forms exist, each tailored to specific needs and types of property.

A Contractors Equipment Floater covers machinery, tools, and equipment that contractors use and transport between different job sites. This policy protects against damage or theft of valuable equipment.

Builders Risk insurance provides coverage for structures and materials during new construction or renovation projects. This policy typically protects the building under construction, as well as materials, supplies, and equipment on-site, in transit, or stored off-site, against perils like fire, wind, and vandalism. It is a temporary policy that concludes once the project is completed or accepted.

Accounts Receivable policies protect businesses from financial losses if their accounts receivable records are damaged or destroyed, making it impossible to collect outstanding debts. This coverage can include the cost to reconstruct records and even the uncollectible amounts due to the loss of those records.

Valuable Papers and Records insurance protects important physical documents like blueprints, deeds, contracts, and medical records from loss or damage. It covers the cost of research and replacement of these crucial paper documents.

A Bailee’s Customers Policy is designed for businesses that temporarily hold the property of others, such as dry cleaners, repair shops, or warehouses. It covers damage or loss to customer property while it is in the bailee’s care, custody, or control.

An Installation Floater covers property and materials from the moment they are loaded for transport until they are installed and the work is completed or accepted. This is useful for contractors installing specific components, covering materials against damage or theft during transit and installation.

Finally, Trip Transit policies provide coverage for a single shipment of goods, protecting them from origin to destination during a specific journey. This is often used for high-value or unique items that are transported infrequently.

Understanding Policy Exclusions

While inland marine insurance offers broad coverage, policies contain specific exclusions that define what is not covered. Common exclusions include losses arising from ordinary wear and tear, which refers to the natural deterioration of property over time, and inherent vice, a characteristic within the property itself that causes it to damage or destroy itself. Policies also typically exclude losses due to mold, vermin, or insects, as these are often considered maintenance issues. Catastrophic events such as war, nuclear hazard, or governmental action (like confiscation or destruction by authorities) are universally excluded. Additionally, dishonest acts committed by the insured or their employees, and mechanical breakdown of equipment, are generally not covered. Damage resulting from improper packaging or handling, as well as unexplained disappearance where the cause of loss cannot be determined, may also be excluded.