When you've invested heavily in tools and equipment for your artisan contractor business, the last thing you want is those investments to get stolen, lost, vandalized, or damaged. That's why contractors rely on inland marine insurance (also known as tool and equipment insurance) to protect these vital business assets.
What is Inland Marine Insurance?
Inland marine covers business property such as tools and equipment while in transit over land or when stored at an off-site location.
Inland marine is a "floater" policy, which means its coverage goes wherever the insured property goes. Unlike commercial property coverage, which is designed to cover business equipment that remains at the location listed on your policy, inland marine coverage goes where your tools go.
How Does Inland Marine Coverage Work?
Inland marine insurance protects your tools and equipment that are on the move, like a plumber's tools that go from one job site to another.
Inland marine covers:
- Property on the move (in transit)
- Property that often moves around (tools, equipment, products, display items)
- Property in your temporary care (furniture you’re refurbishing)
- Movable property in a fixed location (think of heavy equipment installed in a van or truck)
What's Covered by Inland Marine Insurance… and What’s Not?
Inland marine typically protects your tools and equipment against common perils, such as theft, fire, wind, hail, and water damage.
However, it's important to note that inland marine policies can come in different forms, such as:
- All risk: all risk, or open perils, coverage will cover any incident that’s not specifically excluded by name in your policy.
- Named perils: named perils, or specific perils, coverage will only cover incidents specifically named in your policy, such as fire, theft, etc.
It's vitally important to understand the difference between a named peril and open peril policy, so you know what incidents are covered or excluded. Like all insurance policies, knowing the details of what’s covered (and what’s not) can help you when it comes time to file a claim.
Even with an all-risk policy in place, your inland marine policy won’t cover every risk to your artisan contractor business.
Common exclusions to tools and equipment coverage include:
- Intentional damage or neglect
- Negligence (improperly packed items)
- Company vehicles
- Property damage or bodily injury
Different Types of Inland Marine Coverage
There are varying types of inland marine coverage to suit your specific business needs. For example:
- Contractors' tools and equipment is a type of inland marine coverage meant for contractors with property valued less than $10,000
- Builder's risk is a type of inland marine coverage meant to cover your tools and equipment during the course of construction
- Rigger's liability is a specific type of inland marine coverage covering cargo and equipment that a crane is transporting.
- Installation floaters coverage is a type of inland marine coverage that protects equipment and property that a contractor is installing.
Ask your insurance professional how to best use this equipment floater insurance policy to protect your specific tools and equipment.
What's with the Name?
Inland marine may seem like a funny name for a policy that protects tools and equipment.
The policy is an off-shoot of ocean marine insurance, one of the oldest forms of insurance which covers property transported over water. (Ocean marine has existed in some form or another since around 3,000 BC and became common insurance against piracy and other losses around 1255.)
It makes sense that ocean marine insurance is the oldest known form of insurance since oceans provided the fastest forms of transportation for thousands of years. But over time, transportation evolved, and goods began to move over land by train and truck.
Cargo still needed to be protected during transportation, so "inland" marine coverage branched off from ocean marine to cover goods that were on the move (and not over the sea).
Does Your Contractor Business Need Inland Marine?
Inland marine may make sense for your business if:
- You have tools and equipment valued at $10,000 or less
- Your tools leave your commercial or covered premises
- Your equipment travels from one job site to another
- You don't want to pay out of pocket to replace stolen or damaged equipment
Inland marine insurance can be a stand-alone policy for your business, added to or may be included in a Business Owners Policy (BOP) or bundled with other business policies.
Find out if inland marine insurance is a good solution to protect your tools and equipment. Call a contractor insurance specialist at Aegis Insurance Markets at (800) 579-6369 or request a quote from our team.