How Does Inland Marine Insurance Work?

October 2018
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As a contractor, your tools and equipment are constantly on the move. Carted from one job site to the next, they are necessary for your business to keep moving forward. Without them, you could not succeed.

But what if they are lost, stolen, or damaged by vandals? Can you afford to pay out to replace them?

With inland marine insurance, you won’t have to foot the bill for tools and equipment losses that occur while in transit or on the job site.

Learn how inland marine insurance works and, more importantly, how it can work for your contractor business.

How Inland Marine Works

While commercial insurance generally covers assets for businesses that remain stationary, those that are mobile need special coverages to protect their moveable assets.

When your tools and equipment leave your place of business, they cease to be covered by commercial insurance. That’s when inland marine coverage kicks in.

Covering certain types of moveable property, including tools and equipment that regularly move between job sites, inland marine offers peace of mind to contractors who send their assets out into the field.

Understanding Inland Marine Coverage

It is important to understand which properties and perils are covered under an inland marine policy.

Properties Inland Marine Covers

Offering coverage to businesses that are on the go, inland marine insurance covers the following types of property:

Mobile property
Tools and/ or equipment that is moved from job site to job site.

Property in transit
Goods that are being transported/ shipped

Property that stays in a moveable location
Example: Food truck with kitchen equipment inside

Property deemed to be an “instrument of transportation or communication”
Such as bridges and radio towers.

Whether your work equipment is in transit or in the control of another person, inland marine covers losses or damage to:

  • Materials
  • Supplies
  • Tools taken to and from a job site

Inland marine protects all equipment, tools, and inventory that are on the move, within the area of coverage outlined in an individual policy. But what does it cover them for?

Losses Inland Marine Covers

Inland marine helps foot the bill when your moveable property is victim to:

It’s not unheard of for tools to go missing. If you or an employee misplace a tool between job sites inland marine’s got you covered.

For thieves with their sights set on contractor heavy equipment, the risk is low and the reward high. Hard to track and easy to sell, heavy equipment is in constant danger of being taken from a job site, with the most common cause for loss of heavy equipment being theft.

Accidents happen, especially in high-risk industries like construction. Inland marine insurance has you covered if your tools or equipment should be damaged while in transit or on the job site.

Some damage isn’t accidental. Vandals see a construction site left unguarded overnight as the perfect opportunity to reap havoc. In one instance, the damages that vandals caused to heavy equipment on a job site totaled $150K. Is that an amount your business could afford to pay out? Inland marine insurance helps cover costs for damages intentionally caused by vandals.

What Isn’t Covered By Inland Marine

While inland marine does have you covered for your movable tools and equipment as they are transported between job sites, it is not a blanket policy and does have some limitations.

Typically inland marine won’t cover:

  • Intentionally damaged property
  • Damage to construction sites before construction begins
  • Automobile damage
  • Items damaged after they’re shipped
  • Items that haven’t shipped yet

But what’s with the name? The origin of this type of insurance explains how it got its name and also helps to better understand the coverage.

The term ‘inland marine insurance’ brings to mind an image of seafaring vessels traveling on land. There’s a reason for that.

Before goods were carried by trains, planes, and trucks, they were transported by sea, from shore to shore. Perhaps the oldest type of insurance to exist, ocean marine insurance was developed as a means to protect owners of both seafaring vessels and the property carried on board from financial losses.

However, the cargo wasn’t covered when in route to its departure location or once it was unloaded from a ship to be transported to its final destination.

That’s where inland marine insurance came in. This coverage – now also known as tools and equipment insurance – has evolved over time to cover items that travel only on dry land, having nothing whatsoever to do with the sea.

The bottom line is that, if your business has assets that are on the go, you will likely benefit from inland marine coverage. With policies that can be customized for your coverage needs, your insurance professional is able to get you an inland marine quote tailored specifically to your business needs.


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