Inland Marine Insurance

Don’t let the name fool you! “Inland Marine” insurance can address many exposures for loss of property that is movable or moving, in transit or held by a bailee. It is not the same as Ocean Cargo or Ocean Marine Insurance but did have its roots there. Inland Marine commonly covers one of the following but there are others also:

  • Bailee Customer’s Goods
  • Builders’ Risk
  • Camera and Photographic Equipment
  • Communication Towers and Equipment
  • Computer Coverage
  • Contractors Equipment
  • Exhibitions
  • Fine Arts
  • Golf Equipment
  • Installation
  • Leased Property
  • Mobile Medical Equipment
  • Motor Truck Cargo
  • Musical Instruments
  • Scheduled Property
  • Valuable Papers
  • Warehouse Legal
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Inland marine traditionally has been less regulated than other types of insurance because of the uniqueness of the items covered. In order to be consistent in its treatment, insurance regulators adopted a Nationwide Marine Definition in 1933. While the basic definition has remained unchanged, amendments have been added over the years to recognize changes in technology and the economy. Inland marine coverage can be provided by standard ISO forms and by forms provided by various inland marine carriers. While there are many common forms, the beauty of inland marine is that it was developed to recognize and insure the unique. When “it has never been done before” and needs to be insured, the inland marine market comes into play.

(Refer to PF&M Section 140.1)

Inland Marine Coverage—Accounts Receivable

This coverage protects against loss resulting from an inability to collect accounts receivable due to the loss, damage or destruction of books or records of accounts. This coverage may be written using a standard ISO Inland Marine Form.

This coverage is very important to any automotive operations that carry accounts for customers.

(Refer to ACORD 145) (Refer to PF&M Section 141.2)

Inland Marine Coverage—Difference in Conditions (DIC)

This type of insurance is written to expand on other property coverages in place. Its purpose is to provide primary coverage against causes of loss normally excluded in standard property forms, such as flood, water damage and earthquake. It can also be used to expand a named perils contract to provide additional coverage comparable to risk of direct physical loss. There is no coinsurance but there is a coverage cap and normally high deductibles. There is no standard form to provide this coverage but generally it is offered through both inland marine and property markets. The keys to comparison are the limits, deductibles, exclusions, territory and method of capping.

Automotive operations that are located in unusual buildings could have exposures that are not anticipated. The broad aspects of the DIC can prove helpful for the unforeseen. In addition, there are the added causes of loss of flood and earthquake that may be needed.

(Refer to PF&M Section 142.5)

Inland Marine Coverage—Electronic Data Processing

Covers loss to electronic data processing equipment and media owned, leased or used by the insured. Computerized production equipment may be insured as well as conventional ‘computer’ equipment. Coverage may include or exclude breakdown and power interruption. This coverage is available through the inland marine markets and coverage is not standardized. Comparisons must be made as to exclusions, on- and off-premises coverage and transit. Valuation basis is a consideration since most computer systems will not be replaced with like and quality due to changes in technology.

This coverage is vital for not only the office computers but also diagnostic equipment and sales persons’ equipment.

(Refer to ACORD 148) (Refer to PF&M Section 142.6)

Inland Marine Coverage—Fine Arts

Insures specified works of art, including paintings, etchings, statuary, stained or etched glass windows, etc., against risk of direct physical loss. The key for comparison is the on-premises limit, off-premises limit and transit. The breakage exclusion is common but can be bought back for a significant surcharge.

Automotive operations with antique tools, special art pieces or other items that are considered art will need this coverage in order to prevent coverage gaps.

(Refer to PF&M 142.7)

Inland Marine Coverage—Goods In Transit

Covers product that is either owned by the insured or a customer of the insured while it is being transported. The product may be on the insured’s vehicles or on others and coverage may be for legal liability or full coverage. Coverage is provided by inland marine carriers using their own developed forms. The coverage may be called motor truck cargo or transportation insurance but the policies should be similar. Key comparisons are causes of loss covered, restrictions on travel, warranties (particularly ones regarding locked car), enclosures and alarm systems.

Only the smallest operations should consider not have this coverage.

(Refer to ACORD 143, 193) (Refer to PF&M Sections 142.11 and 142.14)

Inland Marine Coverage—Signs

Covers neon, fluorescent, automatic or mechanical electric signs against a risk of direct physical loss or damage. This is offered using a standard ISO Inland Marine Form. If regular wooden sign coverage is needed, the Building and Personal Property Coverage Form must be used.

Automotive operations often have significant signs and will need this coverage.

(Refer to ACORD 144) (Refer to PF&M Section 141.11)

Inland Marine Coverage—Valuable Papers And Records

The policy insures on a risk- of- direct- physical- loss basis, including misplacement or mysterious or unexplained disappearance of documents that have no duplicates. There is a standard ISO Inland Marine Form to provide this coverage. There is a limited amount of coverage provided in the ISO property forms and most other form extensions offered by a variety of carriers. This limited coverage is not as broad as the Inland Marine Form.

There can be many types of valuable paper in automotive operations. The exposure should be carefully considered especially if titles are held on customers’ vehicles.

(Refer to ACORD 145) (Refer to PF&M Section 141.13)