Inland Marine Insurance vs Marine Insurance
Inland marine insurance is often misunderstood. In fact, despite the nautical language, inland marine insurance is not designed for property at sea. And it’s not “marine” insurance. The term was created in the 19th Century to describe insurance beyond what had previously been available for property at sea. This type of insurance can be written for almost any kind of property, anywhere in the world. Despite being a broad insurance category, there’s nothing standard about inland marine insurance. It can address a wide range of property your company owns or has in its custody, if your policy isn’t constructed correctly, it could lead to a significant uninsured loss.
What does Inland Marine Insurance Cover?
Inland marine insurance can be used for any kind of miscellaneous property. For example, if you’re a contractor, you need insurance for your equipment (i.e., bulldozers, excavators, tools, etc.). It is likely insured under an inland marine policy. Another example is transit insurance. If your business ships a product (yours our others) using a truck, train or airplane and it is lost or damaged while in transit, coverage could be provided by inland marine insurance. Even jewelers’ block insurance, which covers jewelry in a display window, is considered inland marine insurance.
How do I ensure I have appropriate Inland Marine Coverage?
There’s nothing standard about inland marine insurance. Inland marine policies are completely customized contracts between insurance companies and the insured. So, if your broker isn’t familiar with the type of inland marine insurance you need, you’re not going to get the best policy possible. For example, if not negotiated correctly, it’s not uncommon for contractor’s equipment to be replaced at actual cash value (ACV) with major deduction for depreciation, versus replacement cost or for a policy to exclude flood coverage. There are also times when businesses have inland marine policies that may not be necessary. Often your broker can bundle coverage for items like computer equipment, forklifts, and other items that remain at a company’s facilities with their property policy. The advantage of bundling is you can improve the coverage terms while reducing the cost.
Inland Marine Insurance is a broad insurance category that can fill important niches in your insurance program. However, it’s not effective if the terms and conditions of your policy aren’t optimized for your specific needs. To make sure that they are, work closely with your broker to reduce your exposures.
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