Inland marine insurance is a first-party small business coverage that offers protection for products, equipment, and valuable goods while they are being transported over land or stored at an off-site location. Policies for inland marine insurance differ from standard commercial property policies by covering your property while it is not at the primary listed location on the commercial property policy. The cost of inland marine varies, but most insurers offer tools and equipment coverage (a type of inland marine) for around $20 a month.
Key takeaways
- Inland marine is a type of business insurance designed to cover your equipment, products, and valuable goods when they are away from the primary location of the business.
- Inland marine has different names like builders risk insurance, motor truck cargo, or tools and equipment insurance.
- Any business with valuable goods, equipment, or tools that are often off-site should consider inland marine.
How Inland Marine Insurance Works
“Inland marine insurance” functions as both an umbrella term for the family of policies and as a description for the most common type of inland marine insurance. For other types of inland marine insurance, the name and usage will change based on the industry and the insurance company. For example, an insurance company might offer an inland marine policy called “cargo insurance” for shipping businesses and another inland marine policy called “fine arts coverage” for gallery owners.
Inland marine insurance, like many insurance terms, is rooted in a specific period in history. Marine insurance covers cargo transported across oceans and waterways—and inland marine grew out of that insurance and time period when offering and was developed to extend coverage once ships docked and unloaded the cargo.
Like most first-party policies, inland marine insurance offers protection against the standard named perils:
- Fire
- Theft
- Wind damage
- Lightning strike
- Mysterious disappearance
Here is how it works: So, let’s say you have a carpentry and drywall business. Your business rents an office building and owns a warehouse. While your business owner’s policy (BOP) or commercial property insurance can handle both of those properties, inland marine will help cover your tools and equipment at the job sites.
It is important to keep in mind that coverage will vary by industry and insurer. It is always a good idea to discuss the specifics of your policy, including what items are covered, with your insurance representative.
What an Inland Marine Policy Doesn’t Cover
Like all insurance types, inland marine doesn’t cover every loss. Here are the primary items not covered by an inland marine policy:
- Property at a fixed location: Excludes items covered by your commercial property insurance policy, which are primarily items at a fixed location.
- Your vehicle: Excludes the actual vehicle you use to transport your property. Inland marine only covers the property being transported by the vehicle.
- Transport over water: Excludes goods or merchandise being transported across bodies of water, which is covered under an ocean marine insurance policy.
- Liability: Excludes any type of liability from your business operations or premises. General liability insurance is the primary type of business liability coverage.
- Employee injuries: Excludes employee injuries or illnesses as a result of their job—that coverage is provided by workers’ compensation insurance.
A Policy With Many Names
I mentioned earlier that different types of inland marine insurance policies have different names, though the way the policy functions remains essentially the same. Some examples of inland marine insurance sold under different names include:
- Builders risk insurance: Covers building materials and supplies (e.g., wood, bricks, etc.) in transit or stored offsite (including at the construction site, in nearby empty lots, or at third-party warehouses) for construction projects
- Motor truck cargo insurance: Covers property in transit on semi-trucks or cargo vans and the responsibility of the truck driver if cargo is lost or damaged
- Bailee’s customer insurance: Best for businesses that have a client’s property in their control, like a repair store or warehouse
Inland Marine Insurance Costs
The cost of an inland marine policy varies, but most small businesses pay anywhere from $200 to $1,000 per year. The ultimate cost depends on a few factors, such as the size of your business, your industry, how much protection you need, and any state or federal requirements you must meet.
Another significant factor in determining the cost of inland marine insurance is the value and type of equipment being insured. For example, a photographer who purchases a policy for a camera, some lenses, and a tripod will pay less than a carpenter with an entire truck bed full of expensive tools and equipment.
Who Needs Inland Marine Coverage?
Companies responsible for cargo, like truckers and carriers, or businesses that regularly store tools and equipment offsite should consider getting inland marine insurance.
Businesses that typically need inland marine coverage include:
- Transport and logistics companies: Businesses in the supply chain that ship and store goods in warehouses are prime candidates for inland marine insurance because they consistently transport and temporarily store third-party property.
- Construction contractors and builders: Businesses that move equipment and heavy machinery to construction sites need inland marine coverage, which is typically sold as builders risk insurance or contractors equipment insurance.
- Semi-truck businesses: Owner/operators and motor carriers need motor truck cargo insurance, which is a form of inland marine insurance that covers damage or loss to cargo they are carrying. For information on coverages and requirements, see our guide on semi-truck insurance.
- Commercial photography businesses: Photographers who go to different locations for photoshoots may need inland marine to cover their high-value photography gear and equipment. Read our guide on photography insurance for more details.
- Jewelers: Jewelers use an inland marine coverage called jewelers block insurance to protect their inventory, stock, goods in process, raw materials, and customer property entrusted to them.
- Warehouses: Companies that maintain the property of others, such as warehouses and storage facilities, take on the “care, custody, and control” of other people’s assets, making inland marine coverage necessary.
While this list includes businesses that commonly need inland marine insurance, dozens of additional businesses and professions may need it, too. Without this coverage, you may have a gap in your business insurance coverage because neither property insurance nor commercial auto insurance can protect your property as it travels.
Frequently Asked Questions (FAQs)
If you store property at an off-site location or frequently transport property from location to location, inland marine insurance is recommended. Commercial property insurance primarily covers only property located at the address listed on the policy.
You might. Inland marine insurance fills gaps in coverage on other policies—such as commercial property insurance or standard business property insurance—that don’t cover items in transit. It is also designed to cover assets while they are out of your normal control, such as at an office or store other than your primary location. Of course, every insurer is different, so always double-check with your current carrier regarding policies you have in place, as well as what they cover, to determine whether you need inland marine coverage in addition to property insurance.
No. However, inland marine insurance can usually be added to a BOP. BOPs provide liability coverage with business property coverage, so adding inland marine directly to the policy is an easy way for small business owners to avoid gaps in insurance.
An equipment floater is the official name for the inland marine rider used by many construction businesses that transport expensive equipment from location to location. Equipment floaters cover assets already covered by other insurance policies for short-term periods when they are not at a central business location or job site.
Bottom Line
It is easy to overlook inland marine insurance if you have a commercial property or BOP policy in place. However, if your business regularly transports valuable property from location to location, or often takes temporary possession of the property of others, then you should consider inland marine insurance coverage. A standard commercial property insurance policy does not typically cover these unique insurance needs.
If you’re looking to purchase inland marine, or even if you currently have it but would like to compare your coverage and cost with available options, online digital broker Simply Business is a great place to start. In 10 minutes or less, you can compare the costs with other providers to find the best value.
