inland marine coverage IM
Inland marine coverage is property insurance for property in transit over land, certain types of movable property that may not remain at a fixed location, instrumentalities of transportation (such as bridges, roads, and piers), instrumentalities of communication (such as television and radio towers), and legal liability exposures of bailees. Many inland marine coverage forms provide coverage without regard to the location of the covered property; these are sometimes called "floater" policies. As a group, inland marine coverage forms are generally broader than property coverage forms.
Understanding Inland Marine Insurance
Inland marine insurance is a specialized form of property insurance that has its roots in ocean marine insurance, which protects goods as they are transported across oceans. As commerce evolved and the transportation of goods over land became just as critical as ocean transit, inland marine insurance emerged to fill the coverage gaps left by standard property insurance policies designed to cover property at fixed locations.
This coverage is used to insure a variety of property types, including property in transit over land, movable property that can be located at various places, and fixed properties that are instrumental in transportation and communication. Inland marine policies are also used to cover the legal liabilities of bailees, i.e., those who are temporarily entrusted with the property of others.
Nearly all businesses require some form of inland marine insurance, since nearly all businesses need coverage on their property while in transit. It is particularly important for businesses involved in the transportation of goods or those that possess valuable equipment that moves between locations.
Key Features of Inland Marine Coverage
Many inland marine policies are called "floater" policies, since they provide coverage that moves with the insured property, offering protection regardless of the property's location. This is important for assets that are frequently in transit or moved from one location to another, such as construction equipment, artwork, and mobile medical equipment.
Inland marine coverage forms are generally broader than standard property coverage forms. This is true with respect to covered causes of loss as well as covered locations. Standard property insurance policies typically impose more limitations on the coverage provided than inland marine policies.
Also, compared to standard property insurance, inland marine insurance typically offers more flexibility when insuring unique assets. Standard property insurance policies often impose more limitations on the coverage provided than inland marine policies. It may be easier to tailor an inland marine policy than a commercial property policy to meet the policyholder's specific needs.
IRMI's Commercial Property Insurance provides in-depth analysis and line-by-line interpretations of standard and nonstandard insurance forms, including ISO, AAIS, and NFIP policies, aiding agents, brokers, risk managers, and underwriters with detailed coverage explanations and providing practical advice.
Who Needs Inland Marine Insurance?
Inland marine insurance benefits a wide array of businesses and individuals. It is needed by all those with assets that are mobile or do not conform to the traditional categories of property insurance.
Construction companies, for example, move equipment and tools from one job site to another, exposing these assets to various risks. Inland marine insurance ensures these valuable items are protected regardless of their location. Also, construction companies and owners of property under construction need inland marine builders risk insurance for a variety of reasons. One reason is to cover the property that will become part of the finished structure regardless of whether it is at the construction site, in transit, or at an off-site storage location.
Retailers and wholesalers that transport goods and merchandise between locations or directly to customers also rely on this type of insurance to safeguard their products in transit. Service providers, including medical equipment providers and technology firms, require coverage for their equipment when it is away from the primary business location, making inland marine insurance an ideal solution. Additionally, artists and galleries dealing with valuable artworks that are frequently shipped to exhibitions or buyers need the specialized coverage options that inland marine policies offer.
The need for inland marine insurance extends beyond businesses to individuals with unique items (such as antiques), mobile property (such as jewelry), or specialized equipment (such as golf carts or snowmobiles).
Common Exclusions
While inland marine insurance policies typically provide broad coverage, like other types of insurance, inland marine policies do contain exclusions. Common exclusions vary by coverage type, but typically include losses due to wear and tear, inherent vice (a quality of the item that causes it to damage or destroy itself), and employee dishonesty.
FAQs
Q: Can inland marine insurance cover items shipped overseas?
A: Inland marine insurance primarily covers goods in transit over land. For international shipments, marine cargo insurance is typically required to cover goods in ocean transit. Property shipped by air may be covered under certain types of inland marine cargo policies, if air is included as a covered method of shipment.
Q: Does inland marine insurance apply only to commercial entities?
A: No, inland marine insurance is not exclusive to commercial entities. While businesses commonly utilize it for equipment, products, and materials in transit, individuals can also procure this insurance for personal property that meets the criteria, such as jewelry, high-value collectibles, or art that moves between locations.
Q: Is there a difference between an inland marine policy and a floater policy?
A: A floater policy is a type of inland marine coverage designed to cover property that moves from location to location, offering continuous coverage. While all floater policies are a form of inland marine insurance, not all inland marine policies are floaters, as some may cover fixed items such as bridges and piers.
Q: How are premiums for inland marine insurance determined?
A: Premiums for inland marine insurance are determined based on several factors, including the value of the insured items, the risk level associated with their movement or location, the coverage limits, and the deductible chosen by the policyholder.
Q: Can I add inland marine coverage to my existing business insurance package?
A: Yes, in many cases, inland marine coverage can be added to an existing business insurance package or commercial property policy. This can be a convenient and cost-effective way to ensure comprehensive coverage for movable assets or property in transit.
