Inland Marine Insurance. It’s a term you may have heard, or this type of coverage has been recommended to you, but you’re not sure what it is or why you’d need it.
In this video and post, I’ll explain what inland marine insurance is, where and how it’s used, who needs it, and why.
So, let’s start off with the term: Marine Insurance. Sounds sort of old-fashioned, because it is.
Marine insurance covers cargo vessels, ships, boats, and cargo carried on those vessels, and that’s actually how the insurance business started in the late 1600s.
In a London coffee shop merchants and shipowners gathered and agreed to trade the risks their ships faced on their voyages.
The name of that coffee shop was Lloyd’s and it grew into the venerable Lloyd’s of London.
Okay, enough history.
Marine insurance kept its name from that period of time and is intended to cover various risks on vessels and grew to include aircraft and shipments by air.
In the insurance industry, marine insurance is also called “wet marine”.
So what’s inland marine?
As you may have guessed by now, it’s anything that isn’t wet. But in keeping with the theme of movement, such as ships, inland marine is intended to insure things that move or are transported.
In fact, you may have heard the term “floater” policy used as another way of saying inland marine policy.
A floater sort of indicates that the property moves or floats around.
Where you will often find inland marine insurance deployed is on:
- Contractors’ equipment such as backhoes, dozers, excavators, and even lawnmowers.
- Photography equipment
- Television and movies production equipment
- Computer equipment, especially laptops
- Trade show exhibits
- Goods in transit – meaning goods on trains or trucks being delivered to a warehouse or its final destination.
- Goods that are stored in a non-owned warehouse.
But over the years, inland marine has been used to cover items that are either excluded or just don’t fit very well in the definition of business personal property, often called contents.
Items or classes of property that have high values or unique valuation considerations are often insured on an inland marine policy as well and include things like:
- Medical and scientific equipment – including large diagnostic machines like CAT scanners
- Fine Arts and collectibles
- Solar panels and wind turbines
There are also special classes of property often insured on an inland marine policy form including:
- Bailees coverage where an insured would take possession of another person’s property – commonly you’ll find this with dry cleaners.
- Buildings in the course of construction are known as builders’ risk policies, as well as installation floaters which cover materials or equipment being installed in a building.
- Radio towers and cell phone antennas – this may seem odd because these items don’t move, but what does move is the radio transmissions emitted from the antennas.
- Another weird class of inland marine are bridges because a bridge helps move vehicles.
So, I’ve given you a bunch of types of the property insured on inland marine policy forms, so let’s talk about why you may need it.
First, as I’ve mentioned if you own or lease any type of property that moves, or has a high value, or is unique, an inland marine policy may be a good idea.
One of the key advantages of inland marine over insuring property as part of your BOP or property policy is that each item insured is usually scheduled – meaning it’s itemized on the policy and a specific value is set on that item.
So if you’ve invested $3,000,000 into a medical diagnostic machine or $1M in an excavator you know that it’s specifically insured for that specific value.
If there’s a loss there’s no dispute as to the item insured or its value.
When it comes to goods in transit by truck or goods stored in warehouses the goods are not insured in an itemized fashion, but instead by a blanket limit.
What’s important here is to make sure you update your limits and warehouse locations as your business grows or changes.
Who typically needs inland marine insurance?
- Contractors of all types
- Home builders
- Medical practices and medical diagnostic centers
- Importers & Distributors
- Dry Cleaners
- Art Galleries
- and many others.
How do you get it?
That’s easy, you contact me! We work with all the major insurers writing inland marine insurance and I’d be happy to discuss your needs and how to best ensure this special class of property.
Along the same lines, this video “Business Insurance Reviews Reveal that 9 Out of 10 Insurance Programs Are Dangerous” may be helpful if you’re not sure what you need in terms of insurance for your business or if you’re not sure what you have is right.
If you’d like to connect and talk about your situation let’s connect and have a conversation.