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Inland Marine Insurance, often associated with “Equipment Insurance” in a business context, provides coverage for property that is movable or involved in transportation or communication, as well as construction equipment and other types of property that do not fit neatly into the standard commercial property insurance categories. Below, we delve into an intricate and detailed analysis of Inland Marine Policy coverages, particularly focusing on how these coverages are structured under the Insurance Services Office (ISO) Commercial Lines Property Policy often employed nationwide.
Inland Marine Insurance is a type of property insurance that covers goods, materials, and equipment when these are transported over land—such as by truck or train—or while they are temporarily warehoused by a third party. Contrary to its name, Inland Marine Insurance has nothing to do with marine or ocean-related transport; instead, it fills the gaps left by commercial property insurance policies, offering coverage for property that is mobile in nature or requires unique valuation.
The specifics of Inland Marine Insurance can be complex, particularly when detailing the coverage under the ISO (Insurance Services Office) Commercial Lines Inland Marine, commonly utilized nationwide. Here’s an in-depth exploration of these coverages:
Inland Marine Insurance is not a one-size-fits-all policy. Instead, it comprises several “floaters” or endorsements designed to protect against specific risks. These include, but are not limited to:
Builders’ Risk: Covers buildings under construction, including materials on-site, in transit, or temporarily stored elsewhere.
Installation Floater: Protects materials, machinery, and equipment awaiting installation or during the installation process.
Motor Truck Cargo: Provides coverage for the cargo and other goods transported by a trucker, covering the liability for cargo lost or damaged due to collisions, fire, or striking of a load.
Equipment Floater: Covers movable property, tools, and equipment against direct physical loss or damage while at a job site, in transit, or stored elsewhere.
Bailee’s Customer Floater: Protects clients’ property left in the care of the insured, such as dry cleaners or repair shops.
Fine Arts Floater: Offers protection for valuable artworks and antiques while in transit or on premises, covering risks like theft, damage, or destruction.
Electronic Data Processing (EDP) Floater: Covers computers, data processing equipment, and media, including the costs of research to replace or restore lost data.
Inland Marine policies generally offer broad protection against physical loss or damage, with coverage terms varying significantly by policy. Commonly covered perils include:
While Inland Marine Insurance provides extensive coverage, it doesn’t protect against every possible risk. Typical exclusions might encompass:
Inland Marine policies can use different methods for valuing the insured property at the time of loss, including:
Actual Cash Value (ACV): The cost to repair or replace the damaged property, minus depreciation.
Replacement Cost: The cost to replace the lost or damaged item with a new item of like kind and quality, without deduction for depreciation.
Agreed Value: An amount agreed upon by the insurer and insured at the policy’s inception, reflecting the value of a unique or hard-to-value item.
Coverage limits and deductibles vary widely among Inland Marine policies. A policy might set a maximum limit per item or event, and deductibles may apply on a per-claim basis, affecting the policy’s overall cost and the out-of-pocket expense to the policyholder in the event of a claim.
The claims process under an Inland Marine policy typically involves:
Builders risk and bailee coverage are actually forms of inland marine insurance.
Builders risk covers a construction project while it’s being built. Owners, contractors and architects can purchase these policies to insure against property damage and losses, theft on job sites and business interruption. They can be written for new residential and commercial construction, remodeling and renovation, and installations through an installation floater policy. Installation floater coverage is often purchased by plumbers, electricians and craftspeople who need to insure materials required for a job from the point they are shipped until they are installed.
