Inland Marine Insurance: Hurry! Keep Your Pockets Safe
For example, your grocery store sells frozen foods. The frozen items are brought to your store via the company-owned truck that’s equipped with proper refrigeration. When the goods make it to your store, you notice all of them are destroyed, causing you a loss of several thousand dollars. Turns out, the refrigerator had malfunctioned and exposed the frozen items to extreme heat while in transit. Usually, you’d have to pay the loss from your pockets, but with inland marine insurance, such losses are paid by your insurer.
In this blog
- A Common Question— Why Inland “Marine” Insurance?
- What Does Inland Marine Insurance Cover?
- What Does Inland Marine Insurance Not Cover?
- Miscellaneous Exclusions to Consider in Inland Marine Insurance
- Do I Need Inland Marine Insurance?
- Factors Determining the Cost of Inland Marine Insurance
- FAQ About Inland Marine Insurance
A Common Question— Why Inland “Marine” Insurance?
In ancient times, the primary mode of transportation was through waterways making ocean shipping widely popular. Instances of damage, loss, or theft of cargo during shipping were common. Consequently, shippers had to bear thousands of dollars for their losses. Hence, ocean marine insurance was developed. The insurance made cargo shipping safer.
Over time the development of roadways and railways made inland shipping cheaper. People started to ship cargo in areas beyond the major port cities. That led to new demand for protecting goods during inland transit, which is now known as “inland marine insurance.”
What Does Inland Marine Insurance Cover?
Inland marine insurance covers losses and damages of five different property types:
Properties transported from one place to another via trucks, rails, etc., are covered. A few examples are:
- Employees of a photography company need to travel with expensive cameras and gears. The insurance covers the cameras, lighting, harnesses, and other equipment moved via the company’s van.
- Suppliers deliver goods to their customers. However, during shipment, goods are prone to damages due to vehicular accidents.
- Transferring private property, such as an heirloom, to someone else. While transporting the property, there is a risk of theft.
- A firm’s property may be damaged while shifting from warehouses to retail outlets.
- A company’s salesmen may have to carry goods during sales campaigns. The company can suffer losses if the goods are stolen or damaged while out on the road, but an inland marine policy can protect your company from such losses.
- For a contractor, there is a risk of damage to site equipment such as generators, paving equipment, etc. If damages occur while in transit, inland marine insurance covers you. It also covers the loss when a contractor needs to operate equipment away from the business’s main place.
- Artworks are prone to damage while in transit. For art galleries, inland marine insurance is instrumental in avoiding such losses.
- For police and firemen, inland marine insurance protects the equipment installed in their vehicles.
- Property in transit to a temporary location like a fair, exhibition, and convention are also covered.
In bailee’s custody
A bailee is a party who holds goods for repair, custody, or any other purpose, without receiving ownership. Inland marine insurance covers bailees from loss or damage to such property. Here are a few examples:
- Dry cleaners: There is the possibility of damaging or losing customers’ clothing items.
- Jewelry repairers: If their shop is robbed, they are insured for the theft of their customers’ jewelry.
- Computer repairers: The insurance covers laptops, desktops, and other electronic devices left in your shop for repair.
- Warehouse: A warehouse operator stores goods for suppliers. Inland marine insurance protects such operators from loss due to theft or damage of stored goods.
- Delivery service: Delivery services like DHL or FedEx, can be liable for goods until they complete the delivery. For example, an employee gets in an accident while on their way to deliver a TV. Inland marine insurance would cover for the loss of the TV as well as any other goods damaged by the accident.
- Exhibit companies: They hold valuable artworks, antiques, stones, and other items. While in their custody, those items may be damaged or stolen.
- Furniture and appliance repair shops: They hold customer’s furniture or appliances for repair. They are liable for any damage to the client’s property on their watch.
- Bars and Cafes: They may hold another party’s artwork on display. Damages to such property are reimbursed through inland marine policy.
Inland marine insurance covers property moveable in a fixed location. Additionally, it also covers properties moved from the primary place of business. While it covers moveable equipment, it does not cover the vehicle itself. Here are a few examples of moveable property:
- Medical equipment such as X-ray machines, MRI machines, etc.
- A contractor’s equipment while moving it from storage to a job site.
- A handyman’s tools and properties while they carry them at work.
- Musical instruments such as a piano, guitar, amps, etc. that musicians carry.
- Photography equipment that is transported to different places as the job requires.
- Pet grooming equipment such as clippers, slicker brush, greyhound comb, etc.
- Vending machines that are kept outside the business premises.
- The cooking equipment in a food truck. Equipment like fryers and refrigerators are more prone to damage due to the jerking and constant motion of the truck.
Transportation and communication properties
Inland marine insurance covers properties essential for transportation and communication. Below are a few examples of such properties:
- Dry docks and marine railways
- Transmission lines, towers, and related equipment
- Outdoor cranes and loading equipment
Vehicular installations refer to any equipment attached to a vehicle. For instance, a news van may have video broadcasting equipment installed. Commercial auto insurance does not cover such equipment. However, inland marine insurance protects from the loss of such equipment.
What Does Inland Marine Insurance Not Cover?
Inland marine insurance does not cover every kind of loss. Below are the exclusions:
Wear and tear
Wear and tear can be due to insects, rust, climate, depreciation, hidden defects, etc. The insurance excludes losses due to such events.
Any damage due to nuclear hazards is beyond the scope of the insurance.
The insurance eliminates coverage of loss due to dishonesty, recklessness, or negligence. For example, a person hides their insured and high-valued art and claims theft to get money from their insurance provider.
Any losses due to war are beyond the scope of inland marine insurance. War, undeclared war, or warlike action by any government-sponsored military force, revolution, rebellion, insurrection, etc., are the excluded causes of loss.
The government may seize or destruct a covered property. For instance, the government may take your property for public use. Insurance excludes such loss. However, if the government has to destruct the insured property to prevent fire, the insurance covers such losses.
Inland marine insurance does not cover losses caused by inaccurate inventory counting, record-keeping mistakes, etc. You will have to bear such losses on your own.
Loss of income or market
Suppose that during a high-volume sales season, as shopkeeper’s insured inventory is destroyed. In no way will the insurer be liable for anticipated sales. However, for damages arising from covered risks, the insurer will compensate the shopkeeper up to their policy limits.
Although “marine” is in the name, inland marine insurance does not cover properties transported over water. You can insure such properties through ocean marine insurance.
Miscellaneous Exclusions to Consider in Inland Marine Insurance
- Loss due to insufficient planning, zoning, surveying, siting, grading, compacting, land use, or development of property.
- Causes of loss such as faulty design, blueprint, specification, artistry, construction, renovation, remodeling, or repair of the property.
- Loss resulting from the use of defective materials to construct, remodel, or repair the insured property.
- Properties such as motorcycles, aircraft, snowmobiles, etc., that are typically covered by specially designed policies.
- Loss due to a mysterious disappearance.
Talk to your insurance provider or comment below for any questions you have regarding inland marine insurance.
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Choose from various options and select the policy
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Do I Need Inland Marine Insurance?
The U.S. Department of Transportation reports trucks as the major mode of shipment. The same report says that it is expected to see an increment in the value. The value is estimated to be $16.219 billion by 2045. Additionally, after controlling for inflation, per ton value is expected to rise from $1,016/ton in 2018 to $1,455/ton in 2045.
As shipping your valuable goods gets more and more expensive, you’ll want to make sure they’re protected in transit. You can save your business anywhere from thousands to millions of dollars by paying much smaller amounts (depending on your coverage needs). Clearly, that’s a winning deal for you.
To clarify, commercial property insurance may exclude properties not fixed on your business premises. Additionally, the insurance may limit coverage if the damage or loss of property occurs outside your business premises.
Furthermore, a BOP is more likely to provide coverage to off-site properties. For instance, a customized BOP may cover any inventories that you store off-site. Nevertheless, the coverage amounts for floating high-value goods or equipment is limited. To have sufficient coverage on such assets, you need inland marine insurance.
Factors Determining the Cost of Inland Marine Insurance
The cost of inland marine insurance can be below $500, or can easily cross $10,000. Your premium will depend on the following:
Size of business
Do you own a small business? Or are you operating a large-scale business? Given that a small-scale company has relatively lower property and revenue value, its insurance costs are lower than that of a large-scale business.
Nature of business
Insurers classify businesses per the risks inherent in their industries—for instance, a construction company has higher risks than a food delivery company. Hence, the former will have higher costs than the latter.
In simple terms, coverage limits reflect the level of protection your business needs. The greater the coverage limit, the higher the premium. Moreover, insurance costs depend on whether you want your policy to provide extensive coverage or just partial coverage.
If the property meant for insurance is rare and highly-valuable, the premium rates will soar. The higher the property value, then the higher the severity of a possible loss. Therefore, the nature of the property significantly affects the cost of insurance.
Insurances with Inland Marine Coverages
These are the types of insurances that can include inland marine coverage:
- Contractors insurance
- Landscaping insurance
- Handyman insurance
- General contractor insurance
- Farm insurance
- Church insurance
- Entertainment insurance
- Truck insurance
- Art insurance
- Consultant insurance
- Photography insurance
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FAQ About Inland Marine Insurance
What are the risks covered by inland marine insurance?
Insurance companies may offer you an all-risk policy or named-peril policy. The former covers any losses except those explicitly excluded while the latter covers risks explicitly included.
The common named perils are:
- Fire or lightning
- Theft or vandalism
- Windstorm or hail
- Riots or civil commotions
- Water damage, burst pipes, sprinkler leakage, etc. (flood is an exclusion)
- Sinkhole or building collapse
Can I request additional coverage in my inland marine policy?
Yes, definitely. You can opt for an endorsement, which lets you add, remove, or modify your insurance policy’s coverages. Some common endorsements are installation floater, motor-truck cargo liability coverage, builder’s risk broadening, etc. Talk to your insurance agent to get all the information regarding the available endorsements available for your business.
Find an agent near you and start your journey with maximum coverage today.
Multiple coverage options on your fingertips.
Choose from various options and select the policy
that best suits your requirement.
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