Inland Marine Insurance
Inland marine insurance protects insured items in transit on land. Hence, the name “inland.” Contrary to popular belief, inland marine insurance has nothing to do with the sea or shipping goods overseas.
Businesses that have workers travel between different job locations with their equipment and tools in their vehicles purchase inland marine insurance to ensure that they will be reimbursed if their items are stolen or lost.
Large and small companies with warehouses in multiple locations purchase inland marine insurance to protect their products that may go missing or become damaged in transit.
What Inland Marine Insurance Covers
Inland marine insurance covers many different types of property. Most policies for businesses are specialized, catered to your respective industry, and proportionate to the value of your business’s goods.
Unlike other more conventional forms of commercial insurance, inland marine insurance coverage options are often specialized to an industry-specific standard.
Depending on what you are looking to cover, your policy may vary, be it electronics or technical equipment. Inland marine insurance is often used to protect workers that travel around a lot.
Individuals who work in the scientific, electrical, photographic, communications, and construction fields are usually covered by their employers’ inland marine insurance.
Policies typically do one of two things:
- Reimburse you for the value of what is stolen
- Replace any goods or equipment that is stolen
Some inland marine insurance policies will also cover your client’s materials or items if they are damaged or stolen on your property. Seeing that inland marine insurance policies are customizable, even leased or rented equipment is insurable.
What it Does Not Cover
Despite the name, inland marine insurance does not protect goods traveling overseas. Individuals looking to protect their products while traveling on water need to purchase marine insurance.
Inland marine insurance also isn’t product liability insurance. Most people who purchase inland marine insurance insure high-priced goods, products, or equipment. That doesn’t mean that an inland marine policy can’t cover your company’s products.
However, individuals looking to protect mass shipments of low-priced goods should first look at product liability policies.
Some inland marine insurance policies also do not cover goods damaged from certain natural disasters, depending on your business’s location. Inland marine insurance will only cover goods on the go, meaning that stationary equipment is not covered.
Most companies protect stationary equipment through a product, liability, or umbrella policy.
Are there Policy Limits?
Given that policies vary greatly depending on what you are insuring, policy limits can also vary. The policy limit for protecting fine art is different than protecting solar panels. In fact, fine art and collectibles can even be safeguarded on loan.
Policy limits and quotes can be discussed further with a local insurance agent from KRA Insurance.
Types of Inland Marine Insurance Coverage
Camera and Musical Instrument Dealers
Usually retailers can cover stocks of inventory under the Commercial Property Form. However, by using the Commercial Inland Marine Program, merchants dealing principally in camera and musical instrument equipment can arrange more specific, open perils coverage.
Because of an optional coverage under the form allowing furniture and fixtures to be covered – where the insured has no other property exposure (such as building) – the Camera and Musical Instrument Coverage Form can stand as the insured’s only property coverage.
There is no Legal Liability Coverage for the premises in this form – that would be added by endorsement. This form covers property while at the premises, in transit, and away from the premises in the custody of employees and elsewhere.
Commercial Articles Coverage
This form is similar to the Camera and Musical Instrument Form, but camera and musical instrument can also be covered under the Commercial Articles Form.
Generally, it is intended to cover commercial property; this includes photography studios, motion picture production companies, professional musicians, boards of education, and municipalities.
The form is an open peril basis, but it requires scheduling of individual items with a limit of insurance provided for each item. The form provides blanket coverage in some cases.
Equipment Dealers Coverage
This form is used to provide coverage for dealers of agricultural implements and contractor’s equipment, insuring the dealers’ stock in trade and similar property of others in the dealers’ custody or control on an open peril basis.
Other incidental operations are covered. For example, if the dealer also sells seed, grain, and hand tools, that inventory would also be covered. The form draws a sharp distinction between the kinds of mobile equipment insurable under the Equipment Dealers Form.
Note: Motor vehicles designed for use on highways are not eligible for coverage under the Equipment Dealers Form.
The form can be written on a reporting (values reported each month) or a non-reporting form. The declaration page of the policy lists five separate coverage parts:
- Property at the insured premises with space for three location and limits in building and outside.
- A limit for property at newly acquired premises which usually only applies for 30 days and is then added to the policy.
- A limit for property in transit.
- A limit to property not at the insured premises and not covered by A, B, or C (such as property stored at someone else premises).
- A total limit for all covered property at all locations.
This provides broad coverage for exposed motion picture and magnetic or video tapes, including sound tracks and other sound records. Any person or firm engaged in commercial production of motion picture film, or the commercial recordings of magnetic or video tapes, is eligible for coverage.
Floor Plan Coverage
This is affordable open perils coverage on merchandise held for sale that has been financed through a lending institution.
The type of merchandise is relatively expensive, individually identifiable by serial number, and subject to only moderate turnover (i.e. items expected to remain in inventory over 30 days before selling).
The form is usually written on a monthly reporting form basis with payments due monthly. The policy may be written to cover the single interest of the dealers or lending institution or written to cover the dual interest of the two entities. Manufacturers or processors are not eligible.
This is available to retailers with average inventories no larger than $250,000.
Ineligible classes are retailers with average inventories of $250,000 or over, wholesalers, manufacturers, pawnbrokers, loose diamond risks, bullion and precious metal dealers, industrial diamond risk, auction dealers, fine art and antique dealers, watch repair shops, and exhibitions, but it may be extended by endorsement to cover trade shows.
The cover is written for “risk of direct physical loss.” This covers “stock in trade” consisting of jewelry, precious and semi-precious stones, and precious metals and alloys.
It also includes “other stock” used in the business, so porcelains and crystal in inventory are also covered. The meaning of “covered properly” also includes property that has been sold waiting delivery. Coverage is provided in the US, Puerto Rico, and Canada.
Mail Coverage Form
This is used to insure valuable mail shipments made by financial and fiduciary organizations.
Coverage is provided against risk of direct physical loss (accidental loss or damage) to covered property, when it is sent by first class mail, certified mail, US Postal Service, express mail, and registered mail.
This form can be used by banks, trust companies, insurance companies, security brokers, and investment corporations whose business is primarily fiduciary in nature as well as corporations that act as their own security transfer agents or registrars.
Covered property when sent by first class mail or other classes, include:
- Bonds, stock certificates, certificates of deposits and other securities
- Coupons if detached from bonds
- Postage and revenue stamps, postal express, and other money orders, check drafts, notes, bills of lading, etc.
Note: Other property may have coverage, but only when sent by other forms of delivery.
Physicians and Surgeons Equipment Coverage
Under the current form, professional equipment, office equipment, and tenant-insured’s interest in improvements and betterments are insured on an open peril basis subject to exclusions.
Sign Coverage Form
This affords open perils coverage for neon, fluorescent, automatic, or mechanical electrical signs and lamps. Ineligible risks include billboards and/or ordinary fixed signs, whether they are or aren’t directly illuminated by electric lights.
Theatrical Property Coverage
This is used to cover scenery, costumes, theatrical properties, and similar belongings to others in the insured’s care or intended to be used in a production scheduled in the policy declaration.
Any theatrical productions or plays are eligible except for carnivals, circuses, rodeos, costume rental companies, or theatrical supply houses.
Accounts Receivable Coverage
This covers loss resulting from the insured’s inability to collect amounts due from customers due to a covered loss.
Also covered are interest charges on loans required to offset amounts that the insured is unable to collect pending the insurer’s payment of a loss, collection expenses in excess of the insured’s normal collection expenses that are made necessary by the loss, and other reasonable expenses incurred by the insured to reestablish lost records of accounts receivable.
Valuable Papers and Records Coverage
Many businesses possess valuable papers and records such as blue prints, manuscripts, deeds, maps, or everyday business records and avoid the financial loss of such items by keeping duplicates at another location.
Insureds that can do this may have little or no need for this coverage, but in some cases the document is irreplaceable or a copy won’t work. There are two methods to insure valuable papers: the Limited Amount Property Form or arranged coverage under a separate Valuable Papers and Records Form.
Other Inland Marine Coverage
There are Marine exposures in addition to inland marine involving aircraft or ships that many businesses face, but these coverages will not be discussed here. We have carriers that specialize in physical damage and liability coverages for aircraft and ships.