There are two main forms of marine insurance: inland marine and ocean marine. So, what is the difference?
Inland Marine Insurance
Don’t be fooled by the name. Inland marine insurance has nothing to do with lakes and rivers. Instead, covers products, materials and equipment when transported over land—e.g., via truck or train—or while temporarily warehoused by a third party. Collisions and cargo theft are the two most frequent causes of inland marine losses.
Does your business need inland marine insurance?
For many businesses, the property insurance provided by your Business Owners Policy (BOP) or Commercial Package Policy (CPP) may be sufficient. In general, these types of insurance cover property housed at a specific location, but tools and equipment that travel with employees to nearby job sites may also be covered.
However, if your business frequently ships products or equipment, you may want to consider purchasing inland marine insurance. This type of coverage is especially important if you ship high-value products or materials, which are often excluded from basic property coverage. Inland marine insurance can cover a wide range of specialty equipment and products, including:
- Computers, everything from servers to laptops.
- Communications and networking equipment.
- Construction and contracting equipment.
- Medical and scientific equipment.
- Photography equipment.
When weighing the need for inland marine insurance, consider the nature of your business and operations. Inland marine insurance isn’t just for companies that ship products to retailers and customers. For example, if you have a valuable tradeshow booth that is frequently shipped around the country and stored offsite by a vendor, you may want the protection provided by inland marine insurance. In addition, if someone else’s property is temporarily in your possession, inland marine insurance can provide coverage against the loss of this property.
Ocean Marine Insurance
Ocean marine insurance covers goods traveling on water. If you operate a marine business or regularly ship cargo overseas, you should consider purchasing ocean marine insurance. The following types of businesses are especially exposed to maritime risk and may need specialized marine coverage:
- Marine service providers—including shipyards, builders and repairers, dealers, terminal operators, stevedores and others.
- Marine transportation providers—operators of any type of water vessel.
- Businesses dependent on overseas shipping—such as commodities traders, freight forwarders, importers and exporters, manufacturers and others
Marine insurance policies include limitations in coverage amounts and types of incidents covered. While certain events may not be covered by a standard policy, you may be able to supplement your policy with special riders or endorsements.
Bear in mind, that marine cargo insurance covers losses when products are transported overseas by ship or airplane. That coverage ends when products continue their journey overland by rail or truck. To continue coverage for ground transportation, you’ll need an inland marine policy.
As the saying goes, “worse things happen at sea.” And, believe it or not, this saying holds true when it comes to shipping goods across the ocean. Ocean cargo services face a surprising range of risks. As expected, these risks include the dangers of collisions with other ships or running aground, but there’s the threat of modern-day piracy and the dangers of fire.
One of our insurance advisors can help you review your information and present you with the appropriate marine insurance solution for your business. There’s no obligation, just good-old-fashioned advice. Contact our insurance advisors at (phone number) or online at (business link).
Source: https://www.iii.org/article/understanding-inland-marine-insurance and https://www.iii.org/article/insuring-marine-businesses-and-cargo