Inland Marine Insurance Policy

10 businesses that can benefit from an Inland Marine Insurance Policy

 

Landscaping

Lawn care and Landscaping companies use trailers to transport the machines they use to do their work.  A commercial auto insurance policy will cover your vehicle, but not the trailer and any equipment being transported.  An Inland Marine Policy will cover the specialized equipment landscaping companies transport to the facilities they work.

Real Estate Agencies

Much of the work that real estate agents do is over the phone, via email or at a remote location. If the business provides the agents with their own mobile device or laptops than those devices are at risk without an inland marine insurance policy.  There may be other types of equipment agents use for promotional purposes that are covered under the policy as well.

Construction Companies

Construction companies are very diverse in the scope and extent to which they work.  Some companies are a handyman with one or two employees who may have a minimal amount of tools. Other construction companies may have as many as 20 employees who each have their own set of tools, backhoes, tractors, paving equipment and generators just to name a few.  No matter how many tools a construction business does have, without an inland marine insurance policy those tools are at risk.

IT Professionals

Information Technology Professionals tend to work with and on technology products.  Primarily, personal computers and other types of computer products.  Frequently, these companies are having to make house calls, either to customers’ residence or their business, where they are working with the tools these people use to do their work and live their lives.  Many of these customers have a very basic knowledge of how computers and their networks actually work.  Helping these people fix their products without putting yourself or your business at risk is a slippery slope.  Securing an inland marine insurance policy is a must for this type of business.

Electricians

Electricians, like many businesses, do a majority of their work at a remote site. Many random pieces of equipment are needed for electricians to do their jobs.  And Inland Marine Insurance Policy can help Electricians protect themselves and their business from damage, theft or vandalism.

Musicians/Travelling Entertainers

Entertainers spend the majority of their time out on the road.  With the onset of digital technology, record sales have plummeted over the past decade. For this reason, entertainers must make their living through the live performance. Musicians have an extremely large amount of equipment they carry with them everywhere they go. Failing to secure an inland marine policy can be the difference between replacing your gear after one missed gig or cancelling an entire tour because you do not have the cash flow to cover damaged or stolen equipment.

Engineers and Architects

Engineers and Architects tend to do a decent amount of their work out on location.  There is usually a significant amount of equipment they carry with them to the job site and the equipment tends to be expensive.  Unless they have an inland marine insurance policy the risk for losing this equipment falls on the business. Partnering with a trusted independent insurance agent can be beneficial for these businesses to determine just how much equipment they have, what the value of that equipment is and if they are willing to take the risk of that equipment being damaged or stolen.

Commercial and Residential Cleaning Companies

Cleaning companies have a lot of equipment they use on a daily basis. Some of the equipment can be extremely expensive. The risk for inland marine coverage is greatest for residential companies. This is because residential cleaning companies typically travel to two or more locations throughout the day.  While the employees are driving from location to location the business is at risk.  The business is also at risk while the employees are at the remote location doing the actual cleaning. Commercial cleaning companies on the other hand commonly travel to one site and clean one or a few facilities at the one location.  The equipment is stored at the location and not transported to and fore.

Appraisers

Appraisers; like architects, electricians and engineers, travel to off-site locations frequently. While travelling to the location and while out performing work the equipment they use to do their job is at risk of being damaged or stolen.  Depending upon the scope or your appraisal business this can be a significant risk.  Consulting with a trusted insurance agent can help you determine how much risk your business faces and how much if any coverage you need.

Home Health Care Agencies

Home health care agencies perform all of their work at the location of their customer. This industry can be very high risk.  It tends to have a larger than normal amount of claims and their severity can be severe. These risks typically are bodily injury from the employees lifting and transporting the sick or elderly patients.  The equipment they use to do these jobs can be expensive and if not covered by an inland marine insurance policy the business is at risk for any damage to the equipment.

Does my business really need Inland Marine Insurance?

Isn’t that equipment covered under my other policies?  Why do I need Inland Marine Insurance Coverage?

 

Commercial insurance is one of the most important things any small business owner will ever buy.  It may not seem that this is a fact when purchasing coverage, but in the event of a disaster; the right coverage can mean the difference between a temporary set-back and closing the doors of your business permanently.  One coverage that far too frequently goes overlooked is inland marine coverage.  Below I will tell you what exactly inland marine coverage is and why your business needs it.

International Risk Management Institute

According to the International Risk Management Institute, Inland Marine Insurance is: “Property insurance for property in transit over land, certain types of moveable property, instrumentalities of transportation (such as bridges, roads, and piers, instrumentalities of communication (such as television and radio towers), and legal liability exposures of bailees. Many inland marine coverage forms provide coverage without regard to the location of the covered property; these are sometimes called “floater” policies. As a group, inland marine coverage forms are generally broader than property coverage forms.”

Commonly confused with “marine insurance,” which covers products when transported over water, inland marine insurance covers products, materials and equipment when transported over land, via truck or train.  This coverage can also cover products while temporarily warehoused by a third party. The most frequent reasons for a claim involving this coverage is because of collisions and cargo theft.

Inland Marine InsuranceA couple of the most common small businesses with a need for this coverage are landscaping companies and photographers, but really any business with specialized equipment that may be taken away from the home or office is in need of this coverage.  This can include something as simple as an employee taking a laptop with them on a trip to a conference paid for by the company.  If this or something similar is a common occurrence within your company than you can protect those losses with an inland marine insurance policy.

One common problem many business owners seem to make is that an inland marine risk is covered by other coverages.  Many owners of Landscaping Companies think all the equipment being hauled on a trailer is covered by their commercial auto insurance policy.  That is incorrect.  The vehicle is covered by a commercial auto policy, but the trailer and anything carried on the trailer are not a covered peril unless you have an additional inland marine policy.

Speaking with a trusted independent insurance agent may be your best way to determine if you need this coverage and how much your business is at risk.  An independent agent will be able to quote a policy with several different carriers.  An agent with only one or a small number of carriers will not be able to get you the absolute best coverage at rock bottom prices because they only partner with a select few carriers.  Choosing an agent with whom you have a great deal of trust in can also help you determine if you need this risk at all.  A good agent is your partner and what is best for your business is best for them, because it will help them retain your business year after year.  Insurance agents should only be recommending coverages to your business if they are a need of your business. If you have chosen an agent with whom you trust than you can rest assured that if they recommend it than there is a need. Agents do not only sell coverage; they also have to interact with customers when the inevitable occurs. Many times because they have to interact with businesses after a catastrophic loss that was not covered they have a unique view of risk management.  This is information you should take to heart if you value your business.

Inland Marine Insurance Coverage

Four things to remember when purchasing Inland Marine Coverage.

 

Inland Marine Coverage is frequently referred to as ‘Floaters’ or ‘Equipment’ Coverage. That is because it is designed to protect equipment that a business owns, leases or rents that is not a vehicle or a piece of property. It is also typically equipment that is going to be transported in some way shape or form. This can include a mower that a landscaping business is transporting to a clients premises or a product being delivered to a customer. Many business owners think this part of their business is covered by their basic general liability policy, but that is incorrect. If they partner with a good insurance agent they know what is and what is not covered by each of the policy they may or may not be purchasing for their business. If you find that inland marine coverage is right for your business, here are four things to keep in mind in relation to this policy.

  • Choose an agent who partners with many carriers and not just a select few. 
  • Determine the proper classification code for your business. 
  • Inventory all equipment that needs to be protected under the policy.   
  • Establish a good working relationship with your Insurance Agent.

Choose an agent who partners with many carriers and not just a select few. 

By choosing an agent who partners with many different carriers you are allowing yourself to let the insurance agent shop the policy for you. Some agents work with only one carrier or just a select few carriers. This means they are not able to make sure you are getting the absolute best coverage at the best price. You can always shop the coverage around to several agents, but wouldn’t your time be better spent running your business. Finding an agent you trust and who knows your industry well can allow you to let the insurance professionals do their job. It allows you to get back to doing what you do best, which is running your business.

Determine the proper classification code for your business. 

Most industries have several classification codes within the industry. Insurance agents and insurance carriers are in the business of analyzing risk. It is in the best interest of their business to always assume more risk until proven otherwise. If you are in a less risky classification code within your industry the agent and carrier are only going to know this if you bring it to their attention. Otherwise they will probably assume your business takes on more risk. This will result in you paying more premium and may cause some claims to not be covered. Now, these mistakes typically do get fixed at the end of term audit, but even when they are fixed you still have been tying up cash into premium you did not owe that could have been used to reinvest in your business. In some cases if you are classified into a less risky class code you will owe more in premium after the audit. In the worst case scenarios your claim may not be covered because you are misclassified and the carrier would not have offered coverage in your higher risk class code.

Inventory all equipment that needs to be protected under the policy.  

It is very important to keep an up to date inventory of all the equipment you want listed under your Inland Marine Coverage Policy. Taking pictures of the equipment is a good idea as well because if there is a claim you will get replacement level value for the equipment that is damaged or destroyed. If you have an expensive version of whatever piece of equipment you are covering the best way to prove that is with a picture. Keeping this information on file with your agent and especially your carrier is crucial when a claim does occur.

Establish a good working relationship with your Insurance Agent.

The better relationship you have with your agent the smoother the process will be when you go to renew your policy and when a claim inevitably does occur. If they know you, your business and what is important to you as a business owner they can better insure your business the way you want it to be protected. Some business owners are okay with excepting some of the risk. Other business owners want to be protect to the fullest limits of the policy. The agent can only attempt to cover your business the way you want them to if you let them know what you expect and how you run your business. This relationship can also come in handy when a claim does occur. If you were combative during the quoting process and then your business has a claim six weeks into your term it does not speak highly of the way you operate your business. On the contrary, if you take some extra time to explain all the intricacies of your business and the way in which you want to be insured during the quoting process it starts off the relationship on the right foot. Later when a claim does occur this process will move through much more smoothly and your agent will be much more likely to go to bat for you with the insurance carrier.

First Party vs. Third Party Liability

The difference between first party and third party liability is essential to protecting a business properly. This is one thing that many business owners frequently neglect. Many business owners see insurance as a fixed cost. Others see it as some sort of tax. Considering some of the coverages are required by law in most states it is easy to understand why some business owners look at them this way. They are also part of your overall plan to protect the long term viability of your business. At least they should be. Protecting your business from both first party and third party liability is essential to properly protecting your business.

First Party vs. Third Party Liability

The most basic example of the contrast between first and third party liability is in the four types of coverage most businesses purchase. Some of these policies are even required by law in nearly every state. These first two coverages are commercial property and commercial auto and they are examples of First party coverage. The legally required coverages are workers’ compensation and general liability and they are examples of Third party coverage. The first two represent first party coverage because they cover damages to you and your business. This would also include a coverage like inland marine coverage. The second two policies represent third party coverage because they protect your business from the third party liability to other people and organizations.  This is covers damages caused by you or your business to third parties. Third parties can include customers, vendor partners or anyone damaged by the actions of your business.

Find the answers to your questions about third party liability at myinsurancequestion.com

Workers’ Compensation and General Liability are required by law for most businesses in most states because they are liability to third parties. If businesses chose not to secure these coverages and then accidents were to occur, the only course of action for the victim would be to take the liable business to court. Because of these requirements they are frequently referred to as the ‘Exclusive Remedy’.

Other policies like those that cover a Data Breach are typically sold in tandem. Data Breach insurance is usually paired in combo as Cyber Security and Cyber Liability.  Cyber Security,  also commonly known as Privacy Notification and Crisis Management Expense Coverage,  protects damage to you and your business that result from a data breach. These costs are commonly referred to as the ‘immediate response costs’.  They could include, notifying all customers damaged by the breach, hiring a forensic expert to find the source of the breach, providing credit monitoring for those victims for up to one year (required by law in most states) and hiring a public relations firm to restore your businesses tainted image.  Cyber Liability covers your liability to third parties. These third parties can include customers, vendors or anyone else damaged by your business as a result of the data breach.

 

What is Inland Marine Insurance?

Also referred to as “Equipment Coverage”, Inland Marine Coverage is coverage specifically for property that is likely to be moved or in transit. It is a highly specialized type of property that requires a unique valuation. This can include products that you are having shipped across the country, but it can also apply to a tractor. This type of coverage is essential for many business owners and the best way to determine if you need it is to have a strong trusting relationship with your insurance agent and tell them everything about your daily operations.

Inland Marine CoverageNow many business owners have an initial reaction to being offered inland marine coverage. That reaction frequently is that this coverage does not apply to my business. In many cases a business owner feels their insurance agent is just trying to tack on an extra coverage. A coverage that they do not really need and in some cases, they might be correct. Again, if you have an insurance agent that you trust they should be able to explain this coverage and help you determine if it is right for you. Any agent worth their weight will not be mentioning a coverage that has no benefit to you the business owner. You might have a difference of opinion about what the risk is, but an agent should never recommend something you do not need.

The best way for an insurance agent to stay in business is to keep you the customer happy. Keeping you happy occurs by saving you money on your policy up front, but also in making sure you are fully covered when incidents do occur. This is where you may differ in opinion about the risks your business faces and about the amount of risk you as a business owner are willing to take. It is the job of the insurance agent to make you aware of these risks and offer the products for you to protect your business to the fullest.

Now I speak about this relationship with your agent, because Inland Marine Coverage is a specialized product in the insurance industry. It is very important for some business owners to have, but many business owners do not carry it and many do not understand how going without it puts their business at risks. First take the example of a construction business who has just a general liability and workers compensation policy. This is typically the bare minimum to get your business up and running. If your construction business is operating away from your business residence than all of your tools are not covered under your either of the policies you have in place. If you were to severely damage a tractor or some other type of expensive equipment than you are responsible for any repairs that might occur. Say you have an expensive piece of machinery that you cannot operate without. If you do not have cash on hand to repair or replace that piece of equipment what is your business going to do? If you have an Inland Marine Policy in place than you can replace that piece of equipment through your insurance policy.

Again having a good relationship with your agent and speaking honestly with them about your daily operations can go a long way towards determining whether you need Inland Marine Coverage. Having open and honest discussions with your agent allow you to determine what risks you have and how much risk you are willing to take as a business owner. The amount of risk a business owner is willing to take is different for every business. Your agent works with all types of business owners on a daily basis. If you are the type of owner who is willing to take on more risk, you should make that known to your agent. At the same time you should partner with an agent you trust and listen to them when they recommend some type of coverage. If they are the type of agent you should be doing business with than they will not be recommending something that is not in your best interest.

Do I really need Inland Marine Insurance?

Inland marine insurance is a specialized form or property insurance. It is often referred to as equipment coverage or Floaters by many business owners and insurance agents. The primary distinction between inland marine and other property insurance is the fact that inland marine is specifically for property that is likely to be moved or in transit, or it is a highly specialized type of property that required a unique valuation.

inland marine insurance

Originally, inland marine insurance policies were referred to as Floaters because they were primarily policies written to cover cargo in transit on large marine vessels. Inland marine coverage has expanded in the U.S. to include most types of property that has an element of transportation. Today, inland marine insurance covers a wide range of property and equipment.  When the property being insured does not fit within a traditional property insurance policy and is not always stationary in a reasonably fixed location it will automatically be eligible for an inland marine quote. While inland marine insurance is slightly more expensive than other property coverage, it also provides additional protection from theft or damage to the property while it is away from the primary business location.

The most common types of inland marine coverage includes construction equipment, transportation cargo, mobile medical equipment, cameras and movie equipment, musical instruments, fine arts and solar panels. Traditional property insurance is not designed to cover claims associated with these types of property. It is not uncommon for a business to purchase both property coverage and inland marine coverage together as part of a Business Owners Package (BOP).

Even though most homeowners policies provide some coverage for personal property such as fine arts, jewelry, guns, antiques, and musical instruments, these policies typically have lower insurance limits and provide less coverage in terms of causes of loss. In some instances, individuals or home based businesses find some of their property can’t be covered properly by their homeowners insurance. This is another situation where an inland marine policy could provide additional coverage.

Personal inland marine coverage is also offered in rare circumstances. It is very similar to a commercial inland marine policy, but the main difference is the named insured (i.e. the person or business buying the policy). Personal inland marine polices are commonly written for individuals who want broader insurance coverage for select property, or want higher limits of coverage than a homeowners policy will provide.

Commercial inland marine insurance represents approximately 2% of all insurance premium written in the United States. This is not a large amount, but when your business needs it it is a great thing to have. Claims on this type of coverage are much more common than many business owners assume. Most business owners and insurance managers could benefit from having a long discussion about what business equipment commonly leaves the primary insured location. In most cases it is only insured if it is located at primary insured location. Once it leaves the premises it must be insured under an inland marine policy. In many cases business owners have turned in property claims on equipment they store or use offsite, only to find their business property coverage does not cover the claim.  This is frequently when business owners understand the value of their inland marine coverage. Unfortunately many times it is too late.

Business Personal Property and Tools

Any time you have a business personal property policy in place which covers property of any kind, it is essential to have good documentation of what you have. It is also critical that your insurance policies are covering the right amount of property and type of property the way you want it covered.

It is too easy when you get around to your year end renewal on your business owners package (If it has the Tools & Equipment Coverage or BPP Coverage on it) or your Inland Marine or Property policies, to just renew and not take a close look at what is actually covered.

I have worked with several companies, which, when we reviewed their tools and equipment or Business Personal Property coverage of their prior policies, the limits were not at where they needed to be. This happens for a variety of reasons. I have seen some companies who see a lot of growth in their first few years in business. After a year or two goes by, they don’t realize how much stuff they have accumulated, which ends up being worth a lot of money but not covered by their policy. So this is something we try to stress when you get your first policy, however it is something to make sure is updated as your company grows as well.