Sometimes, insurance language has its quirks. As if insurance wasn’t confusing enough, there are many terms that originated over a century ago still in use today.
Inland Marine is one.
It sounds like you’d only need it if you have a boat, but in reality, it’s not about boats at all. Well, at least not today.
Let me take you on a quick trip back in history…
The very first insurance “policies” were marine insurance contracts, created by Italian merchants who needed a way to recover losses when the goods they sent by ship were lost at sea.
Then in 1686, Edward Lloyd opened Lloyd’s Coffee House, the first true marine insurance market, and the predecessor of Lloyd’s of London. Marine insurance played a key role in expanding trade routes, and even the discovery of the New World.
Until the 1800’s, ships were the only method of transporting goods long distances — hence the term “shipping”, which we still use today, even if there’s no actual ship involved.
Once the railroads were invented, goods could also be “shipped” over land. The insurance industry coined the term “inland marine” to describe insurance for products being shipped on land.
Thankfully, when airplanes were invented, the insurance industry used the term “aviation” instead of “air marine.” That would have been even more confusing!
Today, inland marine insurance covers all goods shipped within the country, while ocean marine covers international shipments, regardless of whether they are shipped by sea, air, or land.
But inland marine isn’t limited to shipments — nearly every business will have a need for some form of inland marine insurance. Let’s look at a few of the main types of inland marine needs.
Property in Transit
Do you ever ship products to your customers? I’m sure you’ve seen pictures of overturned 18-wheelers with the cargo scattered across the road. That’s just one example of when inland marine coverage is valuable.
A company that sells and installs HVAC equipment at the customer’s site will use a special inland marine policy known as an installation floater to cover the unit before installation.
Movable Property and Mobile Equipment
Inland marine policies are sometimes referred to as a “floaters” because they’re for property that “floats” or moves around. (Yes, another insurance term that dates back to ships!)
That can include items you take to a sales presentation at a prospect’s office, a forklift truck, and just about anything in between.
Do you have any leased property or a booth you take to trade shows? You’ll need inland marine coverage.
Inland marine is also used to insure fine arts, musical equipment, and recording equipment.
For businesses with mobile equipment, knowing whether it should be insured on your business auto policy or on a separate inland marine policy can be tricky. Be sure to let us know what mobile equipment you have and we’ll make sure it’s on the right policy so you won’t have an uninsured loss.
Customer Property in Your Care
Do customers leave anything at your business to be repaired, stored, or serviced?
If they do, you’ll need a special inland marine policy known as bailee’s coverage to cover any losses to your customer’s property while it’s in your custody.
A fire at a dry cleaners… a car stolen from the valet lot… a flood at a repair facility. Without inland marine insurance, there’s nothing to pay to replace the customer’s lost property.
Broadcast Equipment
It might surprise you that television and radio towers are also considered inland marine property and not regular business property.
Transmission towers, bridges, and satellite dishes are all considered “instrumentalities of transportation and communication,” so they too are insured by inland marine insurance.
Buildings Under Construction
Whether it’s new construction or a major renovation, builder’s risk coverage, another specialty inland marine policy, covers losses to the structure and building materials during construction.
I’ll go into this topic in more detail in an upcoming blog post because it’s an important one for all types of contractors.
If you’re thinking inland marine insurance is complicated, you’re right! And I’ve just skimmed the surface of which businesses depend on this specialized insurance to protect them from costly losses.
The good news is, you don’t have to figure it out on your own. Give us a call and our team of insurance specialists will make sure all of your property is on the right policy.
And we’re always happy to explain confusing insurance terms in simple, easy-to-understand language.
