Because accidents can happen at any time, there is definitely a risk factor involved with your company’s land-based transportation of goods, inventory, and equipment. The vehicle you use to transport these products is covered by commercial auto insurance, but the goods themselves are not covered. Additionally, uninsured goods and equipment can cause financial loss for your company.
Packaging Digest estimates that 11% of transported items arrive at distribution locations damaged. In such circumstances, unless you have inland marine insurance, your company would be responsible for covering the loss and supplying replacements for the damaged goods.
What Is Inland Marine Insurance?
Whatever your shipping is covered by inland marine insurance while it’s being transported on land by vans, lorries, railways, etc. It includes loss or harm brought on by outside forces.
While the word “marine” in the name of the insurance may be confusing, it has nothing to do with places or anything associated with water. An outgrowth of ocean marine insurance gives rise to its name. Shipping on rivers, waterways, and the ocean was the main mode of product transport for most of human history. Shippers were responsible if products were damaged or didn’t arrive at all due to the common risks of theft, loss, or damage to the cargo associated with long-distance shipping. Ocean marine insurance was created to provide defense against such threats.
Businesses that transported cargo inland needed similar protection with the development of roads and railways. Inland marine insurance was consequently introduced.
Fun fact: In 2020, inland marine insurance accounted for about 2.3% of net premiums written in the United States, according to Statista.
What Does Inland Marine Insurance Cover?
Inland marine insurance offers defense against the following losses and damages:
Personal Belongings in Temporary Care
Individuals and organizations can be protected by inland marine policy insurance from the loss or destruction of goods that have been temporarily entrusted to them by a client. Bailee’s client coverage is another name for this insurance.
Imagine if someone brings their laptop to your store for repair. The client’s device is destroyed as a result of an unexpected accident, such as a flood or a fire, and your store sustains considerable harm. In this scenario, the client’s device will be covered by inland marine insurance.
Inventory is Frequently Utilized in Different locations
If you routinely transport tools and equipment from one place to another and utilize them there, inland marine insurance will offer essential protection. An excellent example would be a construction company carrying heavy equipment and toolboxes from one location to another.
Goods and Equipment in Transport
While being transported from one place to another, your business’s assets are safeguarded. Usually, this coverage is not included in commercial property insurance.
For instance, a photographic studio that decides to change locations will need to move its cameras, lighting, stands, and other equipment. Commercial property insurance won’t cover damage to these products that occur during transportation. Instead, the expense of equipment maintenance or replacement will be covered by inland marine insurance.
Additional Coverage
In addition to this, inland marine insurance provides protection against specific dangers and perils that could harm your property while it is in transit.
These consist of:
- Fire
- Lightning
- Windstorms
- Hail
- Sinkholes
- Civil riots
- Theft and vandalism
- Smoke damage
- Water damage (burst pipes, sprinkler leakage, etc.)
Exclusions for Inland Marine Insurance
Although inland marine insurance may offer protection against any transport-related damage, it doesn’t offer complete coverage.
Here are a few typical policy exclusions.
- Goods that haven’t been transported or sent
- The vehicles utilized to move the insured goods
- Items not covered by the policy
- Damage to property from normal use, corrosion, weather, concealed flaws, natural disasters, and other factors
- Declared war and related activities by any government or military organization that cause harm to covered property
- Nuclear hazard due to war or nuclear sites which causes loss of insured’s property
- Government actions such as seizure for public use or destruction of a covered property
- Immoral acts that cause loss, damage, or theft of insured property, such as dishonesty, carelessness, fraud, or irresponsibility
- Marine transport or shipping of goods over bodies of water
In addition to these, there are also miscellaneous exclusions that involve inland marine insurance. These exclusions are:
- Flood-related damages
- Loss due to unknown disappearance of property
- Properties with special insurance policies such as motorcycles, classic cars, snowmobiles, aircraft, and more
- Damage and loss due to the use of faulty materials to repair, replace, construct, or remodel the insured property
- Loss due to inadequate planning, surveying, and development of insured property
Do Businesses Need Inland Marine Insurance?
For any business that transports its goods and inventory on a regular basis, inland marine insurance is essential. For businesses that move or keep client property as their main firm, this coverage is also important. As a result of the fact that the insurance it provides is obliged wherever the insured property is transported, it is known as “floater coverage.”
You might believe that your business owner’s policy or commercial property insurance will provide more than enough coverage for your goods. It’s not always the case.
To be clear, your business’s assets that do not belong to your business premises may not be covered by business assets insurance. The insurance policy may also restrict or reject coverage for any harm to your possessions while they are in transit or outside of your company’s premises.
For instance, let’s say that you manage a hardware store that frequently supplies equipment to other businesses. You deliver equipment to your customers using the company’s truck. You learn that your equipment suffered some damage, costing you a sizable loss, as the goods reach them. Without adequate coverage, you’ll have to pay out of your own pocket for their repair or replacement. In contrast, the loss will be covered by the insurer under inland marine insurance.
How Much Does Inland Marine Insurance Cost?
According to Insureon, inland marine insurance for small businesses typically costs $169 annually, or $14 monthly. These rates are determined by things like:
Business Size
Given its operation size, costs, and risks, a smaller business will likely have lower insurance costs than a larger one.
Type of Business
Each type of business encounters a unique set of risks. Additionally, the insurance rates will vary based on these risks. A food truck business, for instance, will face more risky situations than a package-delivery company.
Chosen Coverage Limits
The level of protection your company requires depends on the coverage limits you select. Your premium will be higher and you will receive more protection if your coverage limit is higher.
Property Value
The premium rates will be expensive if the asset you want to cover is rare and special. A property’s potential loss increases with its value.
When determining how much you will have to spend on your insurance coverage, you can ultimately take into account every tiny aspect. However, the total value of the assets you want to insure has the largest role in deciding the price of your inland marine insurance.
Best Inland Marine Insurance Agents Near You
Inland Marine Insurance is essential if your company deals with the shipping of products. Selecting the ideal insurance agent is even more important because it might be difficult to get the correct coverage. Start by asking for referrals from local business networks, then concentrate on seasoned brokers who are experts in inland marine insurance. Make sure they deal with a variety of providers to provide flexibility and take your time evaluating the insurance alternatives they offer.
In order to get the best inland marine insurance coverage for your company, United Finance Insurance is your partner. Get in touch with us right now for individualized security and comfort.