What Is Inland Marine Insurance?

Inland marine insurance is an insurance policy that covers the losses to moving and movable property that occurs when it's transported across the continent. It is an outgrowth of ocean marine insurance, which provided similar coverage for property that was transported by sea. Because of the sheer variety of cargo being transported and the unique circumstances involved in the transportation, inland marine insurance policies are usually phrased broadly enough to allow flexibility other property-based insurance policies usually lack.

History of Inland Marine Insurance

For most of the human history, the best way to transport cargo was by ships. They could haul large quantities of cargo without requiring nearly as much power as transporting it by land would. However, as the distances increased, so did the odds that something would go wrong along the way. The ocean marine insurance was created to compensate property owners for any damage their property suffered en route. However, it did not offer the same protection while the cargo was loaded off the ships or while it was transported to it's final destination by land. That was something property owners had to cover out of their own pockets.

The inland marine insurance was designed to fill this gap. Originally, inland marine insurance was designed to protect cargo while it was transported along rivers, channels and other waterways, but by the 20th century, it expanded, providing coverage to every mode oftransportation, including the docks and warehouses where property is stored. Or, to put it another way, the cargo is covered from the moment it was sent to be transported to the moment it arrives at its ultimate destination. Today, it is entirely possible to get inland marine insurance even if the cargo doesn't go anywhere near a body of water.

What Inland Marine Insurance Covers

Generally speaking, property can be subject to inland marine insurance while it is in transit so long as it falls in one of the following categories:

  • Imports and exports--cargo shipped from one country to another. Imports are products that are shipped into a given country while exports are products that are shipped into another country.
  • Domestic shipments--cargo that is shipped within a single country's borders.
  • Individual property--personal property that belongs to individuals. This includes types of property that other types propertyinsurance won't automatically cover. This includes jewelry, furs and musical instruments, among other things.
  • Business property--property related to a particular business or occupation. This includes everything from office equipment to office supplies. 

In most cases, the coverage will also extend to cover that damage to any equipment or a piece of infrastructure involved in transporting the product. So, for example, it may cover the damage to both truck and the bridge it passes over.

When taking out inland marine insurance, property owners can choose between peril coverage or all-risk coverage. Peril coverage provides cover for any damage to the property so long as the property is specifically cited by name. All-risk coverage provides blanket coverage for all of the property owner's property. In most property insurance policies, the policy won't cover types of damage that isn't specifically listed as part of it's coverage. In an all-risk policy, the reverse is true--it will cover everything except for certain areas that are specifically listed as outside it's scope. For example, if the policy specifically excludes damage that resulted from negligence, it will automatically cover every other type of damage.

How Inland Marine Insurance Works

The inland marine insurance covers the value of the property and the legal costs that may result from the damage to the property. The coverage will remain in force at every point of the cargo's journey, regardless of whether or not it's actually moving at the time. Unlike other types of property insurance, inland marine insurance policies provide the same coverage regardless of location. The fact that there are few laws regulating the field simplifies the matters considerably.