Inland Marine Insurance Explained: Coverage Details & 2025 Pricing Guide

Andy Smith is a Certified Financial Planner (CFP®), licensed realtor, and educator with over 35 years of extensive financial management expertise. He specializes in personal finance, corporate finance, and real estate, having guided thousands of clients toward achieving their financial objectives.

Inland marine insurance is a specialized form of commercial property insurance designed to protect your business assets such as equipment, machinery, tools, cargo, and other valuable items transported over land via truck or train. Unlike standard commercial property policies that mainly cover fixed locations, inland marine insurance safeguards property used at job sites, stored in warehouses, or in transit.

• Provides coverage for equipment, tools, and property utilized on-site, stored off-premises, or transported over land.
• Tailored policies address specific asset categories, ensuring precise protection.
• Covers assets ranging from construction machinery to electronic equipment.
• Originates from ocean marine insurance, extending protection from sea to land transport.
• Essential for businesses shipping or using property away from their primary location or holding high-value items inadequately covered by standard policies.

What Does Inland Marine Insurance Cover in 2024?

Inland marine insurance protects against damage or loss caused by covered risks to movable property like tools, machinery, and building materials. It also secures high-value items often excluded or underinsured in commercial property or business owner policies. For example, a $150,000 bulldozer used on construction sites can be insured under this policy.

Policies may be "all-risk," covering all perils except those explicitly excluded, or "named perils," covering only specified risks. All-risk policies offer broader protection compared to named peril policies.

Valuation methods vary: some policies reimburse replacement cost without depreciation, while others pay based on actual cash value, deducting depreciation.

Important Note

Typical commercial property insurance covers assets at the business location but offers limited or no protection for property at other sites like job locations.

Exclusions: What Inland Marine Insurance Does Not Cover

Common exclusions include damage from insects, gradual wear and tear, mold, floods, and earthquakes. Many policies also exclude vehicles, stationary office property (desks, cabinets), items transported by sea or air, and damages occurring before shipment.

Specialized Inland Marine Insurance Types

Various inland marine policies cater to specific asset types, including:

• Contractor’s Equipment Floater: Covers loss, theft, or damage to contractors’ tools and equipment anywhere, including job sites, transit, or business premises.
• Electronic Data Processing Insurance: Protects computers, servers, laptops, and data storage devices against fire, theft, floods, and electrical issues.
• Bailee Insurance: Covers liability for customer property in your care, such as dry cleaners or repair services.
• Accounts Receivable Insurance: Shields businesses from financial losses due to damaged records or customer nonpayment.
• Installation Floater: Protects materials and equipment in transit or awaiting installation at job sites.

Pro Tip

Often called "floater" policies, inland marine insurance moves with your property, providing coverage wherever it goes.

Policy Limits and Deductibles

Policies may include scheduled limits (per individual item) or blanket limits (covering groups of items). For example, a $150,000 limit for a bulldozer and a $35,000 blanket limit for tools. Your insurer pays up to the applicable limit for any claim.

Most policies require a deductible, commonly between $1,000 and $2,500, representing your out-of-pocket expense per claim.

Note

Understanding your deductible is crucial for managing your risk and claim costs.

Does Your Business Need Inland Marine Insurance in 2024?

If your business transports property over land by truck or train, or moves equipment to various job sites, inland marine insurance is vital. It also covers valuable assets not fully protected by standard commercial property policies, such as computers vulnerable to power failures or mechanical breakdowns.

Why the Name "Inland Marine"?

Derived from ocean marine insurance, which covers sea transport, inland marine insurance extends coverage to property transported over land. It protects your business assets as they travel from origin to destination across land routes.

Examples of Inland Marine Insurance Claims

• A landscaping company claims for fire damage to a backhoe at a construction site under contractor’s equipment coverage.
• A clothing manufacturer recovers losses from a $25,000 unpaid invoice due to customer bankruptcy through accounts receivable insurance.
• A solar installation firm files a claim for stolen solar panels from a job site using an installation floater.

Inland Marine Insurance vs. General Liability Insurance

Inland marine insurance protects your movable property against physical loss or damage. In contrast, general liability insurance covers legal claims from third parties for bodily injury or property damage caused by your business operations.

Summary

Inland marine insurance is essential for businesses transporting or using movable property away from their premises. Originating from ocean marine insurance, it offers tailored coverage for various assets like construction equipment, electronics, and accounts receivable. Given the limited protection from standard commercial property policies for off-premises property, inland marine insurance is a critical safeguard for 2024 and beyond.

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