Inland marine insurance: What it covers and who needs it

What is inland marine insurance?

The name "inland marine insurance” can be confusing. Put simply, inland marine insurance covers your business equipment and tools while they’re being moved in a truck or train. It also covers items that are being temporarily stored in an off-premise location away from your normal place of business. 

Inland marine insurance is derived from marine insurance, which covers business equipment during transport over water. The “inland” term refers to transport over land (train and truck).

What does inland marine insurance cover?

Inland marine insurance protects your business tools, equipment, inventory and other covered items if they get damaged, destroyed or stolen while being moved. It also covers property being stored off-premise and someone else’s equipment that you’re storing at your location.

Here are some examples of business tools that are covered under a standard inland marine insurance policy: 

• Construction or building materials
• Computers and electronics
• Communication and networking equipment
• Construction equipment
• Special event equipment
• Sound and radio equipment
• Solar panels

In addition, inland marine insurance can cover valuable items that would normally be covered at a much lower coverage limit under another policy, or excluded from coverage altogether. For example, inland marine insurance might cover $100,000 worth of lab equipment being moved to a site in another state that isn’t covered under your other property insurance policies.

Depending on the type of inland marine insurance you get, it will cover your items on an all-perils or named perils basis. With an all-perils policy, your equipment is covered against any loss that is not specifically excluded from your policy. A named perils policy only covers your items against losses that are listed.

While inland marine insurance provides valuable protection for items being transported over land, it’s important to understand the limitations of inland marine coverage. This type of insurance doesn’t cover everything, such as office equipment that remains at your place of business and company-owned vehicles. More on these exclusions below.

How does inland marine insurance work?

Inland marine insurance will reimburse you for items that get damaged, destroyed or stolen while being transported over land, up to your policy’s limit. Most policies have a deductible, which is the amount of money you pay out of pocket when you file a claim,

Inland marine insurance can provide reimbursement in two ways. 

If you have an actual cash value (ACV) policy, you’ll get reimbursed for your items based on their depreciated value. If you have a replacement cost value (RCV) policy, your items are covered at the cost of replacing them with like kind and quality at today’s prices. While RCV provides more coverage for your business tools and equipment, these policies have a higher premium than ACV policies. 

To better understand how inland marine insurance works, let’s look at a hypothetical scenario. 

Lisa K. owns a mobile photography business in Denver. She wants to protect her mobile photography gear during transit. Lisa is worried that her standard commercial property insurance isn’t offering enough protection.

To get the coverage she wants for her photography equipment, Lisa could benefit from an inland marine insurance policy. Her cameras, lighting setups and accessories would be covered during transport and off-site photoshoots. If any of her photography gear was damaged, destroyed or stolen, Lisa’s insurance company would reimburse her so she could replace the items.

What does inland marine insurance not cover?

Inland marine insurance doesn’t cover everything. Here are some examples of perils that are excluded under most inland marine policies:

• Property damage from wear and tear, neglect, rodents, flooding, and earthquakes.
• Stationary property that remains at your place of business (like office furniture).
• Equipment transported via air or sea.
• Business-owned vehicles and trucks.
• Property damage that occurs before transport.

What small businesses should get inland marine coverage?

Inland marine insurance is a good investment for small businesses that regularly transport equipment and tools from place to place via truck or train, or store business items off-site.

For example, you might need inland marine insurance if you own a retail shop with multiple locations and move inventory between your stores via truck. It also can be beneficial if you attend retail trade shows and store your booth setup in an off-site storage unit.

Inland marine insurance is especially valuable for construction businesses. If your business stores building materials in an off-premise warehouse and transports those materials to job sites, inland marine insurance will cover the materials in storage and during transit.

“Ultimately, any business owner that invests heavily in the tools and equipment needed to do their job right should get inland marine insurance,” Farley says. “Without coverage, if their equipment is stolen or damaged in transit, they would have to pay for repairs or replacements out of pocket.”

How much does inland marine insurance cost?

The average inland marine insurance cost is $29 per month, or $350 per year, according to small business insurance broker Insureon. However, the cost of inland marine insurance depends on many factors, including:

• Location
• Business type
• Value of your items
• Coverage limit
• Deductible
• Claims history
• Insurance company

If you’re thinking about purchasing this type of insurance, it’s a good idea to get inland marine insurance quotes from several insurers. Comparing personalized rate quotes will help you find the most affordable inland marine insurance for your situation and coverage needs.

Top inland marine insurance companies

Many reputable commercial insurance companies sell inland marine insurance policies. Here are some of the top insurers:

• The Hartford: The Hartford offers inland marine insurance to small, midsize and large businesses in a variety of industries. You can also purchase specialty inland marine policies, such as renewable energy equipment insurance and contractors equipment insurance.
• Travelers: Travelers sells inland marine insurance to construction businesses, museums, renewable energy companies, mobile equipment dealers, logistics businesses and more. To get a quote, you’ll need to find an agent in your area.
• Liberty Mutual: Liberty Mutual has expertise in inland marine insurance underwriting, risk management and claims handling.
• Progressive: Progressive offers inland marine insurance as an endorsement to a general liability insurance policy or business owner’s policy (BOP). You can get a quote online to see how much it will cost to add inland marine insurance to your existing Progressive policy.
• State Farm: State Farm offers inland marine insurance as an endorsement to a State Farm BOP or as a separate policy with annual coverage or short-term coverage. To get a quote, you can find an agent in your area on State Farm’s website.

How to choose an inland marine policy

Here’s how to choose the best inland marine insurance policy for your business:

• Consider your coverage needs: Think about the property you need to insure and the unique risks your business is exposed to. Look for companies that insure the types of equipment you’re transporting.
• Choose a policy limit: Estimate the value of the property you need to insure, and use that figure to choose a policy limit. Policies with higher coverage limits have higher premiums, but it’s important to avoid being underinsured. Otherwise, you could face financial loss if your policy doesn’t cover the full value of your damaged or stolen items.
• Select a deductible: Inland marine insurance policies have a deductible, which you pay out of pocket when you have a covered claim. Choosing a higher deductible will result in a lower premium, and vice versa. Pick a deductible that makes sense for your business based on your risk tolerance and budget.
• Read insurer reviews: When researching insurance companies, it can be helpful to read online reviews to get a better sense of the insurer’s customer service, claim handling practices, costs and other important factors. Look out for consistent complaints related to denied claims, poor agent interactions and policy cancellations. 
• Compare quotes: The cost of inland marine insurance depends on many factors, including the insurance company. Comparing quotes from a few insurance companies can help you find the most affordable coverage.

What our expert says

Q: What small businesses should look into inland marine insurance?

Nicole Farley Senior vice president of agency and carrier operations at Bold Penguin.

"Ultimately, any business owner that invests heavily in the tools and equipment needed to do their job right should get inland marine insurance. Without coverage, if their equipment is stolen or damaged in transit, they would have to pay for repairs or replacements out of pocket."