What is inland marine insurance?

Inland marine insurance is a type of business insurance that helps cover products, materials and equipment while they are transported on land, such as by truck or train. This coverage is meant to help protect business property that is movable or used for transportation or communication purposes.

The Insurance Information Institute (III) states that inland marine insurance may help cover high-value items or those excluded by the property coverage in a standard business owners policy. You may want to consider inland marine insurance if you own a business that ships or transports products or equipment.

This type of coverage may be purchased as an add-on to an existing business insurance policy, or it may be available as a separate policy. Check with your insurance provider to see which options your insurer offers.

Inland marine insurance helps pay to repair or replace portable business property that is damaged by a covered peril listed in your policy.

Perils that may be covered by inland marine insurance include:

• Theft
• Fire
• Wind
• Hail
• Water damage

In addition to the above, an inland marine insurance policy may provide additional coverage for specific situations. This may include protection for:

• Mysterious disappearance: Missing property where the cause of the loss cannot be discovered.
• Accidental drop and damage: Property losses caused when an item is dropped or mishandled, either in transit or in loading/unloading.

Read your policy or check with your insurance provider to make sure you understand what perils are (and are not) covered by your inland marine insurance.

The types of property typically covered by inland marine insurance include a wide array of specialty equipment and materials used for business. For example:

• Computer systems and personal computers
• Communication and networking equipment
• Construction/contractor equipment
• Medical and scientific equipment
• Trade show exhibits
• Sales samples
• Photography equipment
• Cargo/items for delivery
• Tools

Inland marine insurance has a deductible, or the amount you pay out of pocket toward a covered claim. Your deductible is listed in your policy, and you may be able to select the deductible that works best for your business when you buy coverage.

Inland marine insurance also has a coverage limit. If you have a covered claim, your insurer will only reimburse you up to the limit stated in your policy.

Reimbursement for business property damaged in a covered claim may be paid on an actual cash value basis or on a replacement cost basis. With actual cash value coverage, you would be reimbursed for the damaged property's depreciated value. With replacement cost coverage, you would be reimbursed for the cost to replace the damaged property at today's prices. Read your policy or check with your insurance provider to see how losses are reimbursed by your inland marine coverage.

Finally, it's important to choose coverage limits that accurately reflect the value of your portable business property. Some inland marine policies include a coinsurance clause that could penalize you for claiming a loss that exceeds your coverage limits by a certain percentage.