Businesses and industries heavily rely on inland marine insurance to protect their assets in Canada. This type of insurance offers specialized coverage for goods in transit and valuable equipment that may not be covered by traditional property insurance. This article aims to thoroughly understand inland marine insurance in Canada, including the different types of coverage, its importance for businesses, factors to consider when choosing policies, the claims process, and coverage limits. Furthermore, it will explore the current trends and developments in the Canadian inland marine insurance market, focusing on technological advancements and regulatory changes influencing the industry.
Inland marine insurance protects your company against loss or damage to equipment, machinery, products, or other property while transported over land. This type of insurance covers property utilized at a job site, stored in a warehouse, or transported from one location to another via train or truck. Inland marine insurance is derived from ocean marine insurance, which specifically protects property during transportation by sea.
Understanding the Basics of Inland Marine Insurance
Inland Marine Insurance may give the impression of being solely connected to boats voyaging through the Amazon River, but its scope is far more extensive. This form of insurance safeguards goods, equipment, and materials that frequently undergo transportation, akin to a pirate searching for concealed riches. Consider it your reliable companion, safeguarding your valuable cargo on land, not solely on the open waters.
Factors to Consider When Choosing an Inland Marine Insurance Provider
- Different Coverage Options Available
When selecting an Inland Marine Insurance provider, it is essential to consider their coverage range. It is important to avoid obtaining a policy as inflexible as a rusty anchor. Ensure that they can customize their coverage to meet your specific requirements, whether you are transporting goods across the country or just down the street.
- Customization and Flexibility Options
A reputable Inland Marine Insurance provider should possess the flexibility of a contortionist at a circus. They should be capable of tailoring your policy to suit your unique needs perfectly. Whether you require coverage for construction equipment, fine art, or mobile medical equipment, they should offer options that align perfectly with your requirements.
- Claims Process and Customer Service
No one desires to navigate through a claims process that is more complex than deciphering an ancient treasure map. A top-tier Inland Marine Insurance provider should have a straightforward and efficient claims process. Additionally, their customer service should be as helpful and friendly as a parrot perched on a pirate’s shoulder, always ready to assist you whenever you require their support.
What does an inland marine policy typically cover?
Inland marine insurance provides coverage for a diverse range of specialized properties. This includes fine art, medical diagnostic equipment, solar energy equipment, and clothing left at a dry cleaner. Some policies also extend coverage to property that facilitates communication or transportation, such as cellphone towers and commuter rail systems. The purpose of this type of policy is to safeguard movable property, assets used in transit over land, and property owned by others that are under the care of the policyholder or located on their premises.
Furthermore, an inland marine insurance policy may also encompass other items such as transportation equipment like cargo vans or food trucks, contractor’s equipment, mobile equipment and tools for landscaping or construction, property in transit like construction supplies and tools, computer equipment including laptops and servers, scientific and medical equipment, as well as communication equipment and networking tools.
Inland marine insurance provides coverage for various types of business property. This includes being transported over land, property inside a commercial truck, property in temporary care, and property stored at different locations. It also covers infrastructure property, such as bridges or communication towers, and high-value property stored at a fixed location. Additionally, inland marine insurance covers movable property in a fixed location.
For instance, if you are a contractor who frequently moves tools and equipment to different worksites, inland marine insurance will protect your business property while it is on your work truck and being transported to construction sites.
Here are some examples of the types of business property that can be covered by inland marine insurance:
- Construction and contracting equipment
2. Communications and networking equipment
3. Electronics, such as computers, sound or radio equipment, and televisions
4. Fine art and collectibles
5. Medical diagnostic and scientific equipment
6. Photography equipment
7. Tools and equipment
8. Trade show exhibits.
What is not covered by inland marine insurance?
It is essential to carefully review your inland marine insurance policy to understand the coverage and exclusions. Generally, inland marine insurance policies exclude property transported by sea or air, earthquake and flood damage, stationary property, vehicles, and property damaged before shipment.
Your inland marine insurance may be classified as a “named peril policy” or an “all-risk policy.” A named-peril policy provides limited coverage as only specified losses are included. On the other hand, an all-risk policy covers all types of losses unless explicitly stated otherwise.
Inland marine insurance excludes coverage for:
– Business property transported by air or sea
– Business vehicles
– Loss or damage caused by floods or earthquakes
– Property that is already damaged before being shipped
– Stationary property located at your primary business site.
What is included in a marine policy’s coverage?
A marine insurance policy will cover losses or damage caused to cargo vessels, terminals, ships, or any transport during the transportation of goods. This voyage policy protects couriers and shipping companies from potentially costly losses while transporting goods by water.
Even with safety regulations and laws, transporters cannot control natural occurrences that may disrupt the vessel or cargo. Occurrences like encounters with pirates, weather hazards, and cross-border conflicts are common disruptions in water transportation, and the damages that result from these types of situations can cause significant financial losses for the ship owners – which is where a marine insurance policy comes in. This policy will protect the interests of transporters and shipping corporations by giving them the insurance coverage required to protect against potential losses.
One convenient feature of marine policies is that transporters can select coverage options for their trade. While coverage requirements may differ, shipping companies can select a customized insurance plan that considers the routes taken and the size of the ship.
What risks are included in a commercial inland marine insurance policy?
Most commercial inland marine policies typically cover the risks of windstorms, lightning, fires, landslides, floods, derailments, collisions, earthquakes, thefts, bridge collapses, and vehicle overturns.
Is Earthquake Covered by Inland Marine Insurance?
No, companies in earthquake or flood zones should acquire distinct commercial earthquake or commercial flood insurance. Inland marine coverage does not extend to various scenarios, such as stationary property at your primary location, business vehicle, air or sea transport, or property damage before shipment.
Is Inland Marine Considered Property or Casualty?
Inland marine insurance stands out among other property and casualty insurance types due to its numerous and distinctive exposures. Although it falls under the category of property insurance, differentiating between marine and property coverage can be perplexing. Generally, property coverage protects immobile property mostly situated at a designated location and is not considered unique. On the other hand, inland marine coverage is specifically designed for a mobile property that frequently moves between different locations. This type of coverage extends to property located off-premises at new or temporary locations and work sites. Moreover, inland marine policies also cover “unique” causes of loss that are typically excluded from traditional property insurance policies.
Who Requires Inland Marine Insurance?
The business insurance you have for your commercial property covers damages and lost or stolen items like tools, inventory, and equipment. However, it may not be sufficient for some small businesses, especially if your property is moved or stored in various locations. It’s important to note that commercial property insurance does not protect goods in transit. If your business involves tasks such as transporting property over land, moving high-value items occasionally, assets moving between different locations, storing property at a third-party location, or having property in a commercial vehicle that is frequently in motion, you should consider adding inland marine insurance to your business insurance policy.
Various Categories of Inland Marine Insurance
Here are several examples of various types of inland marine insurance designed for different professions.
- Bailee insurance:
Bailee insurance provides coverage for others’ property while it is under the care of your business. For instance, if you operate an electronic repair shop, this insurance would safeguard your clients’ computers from risks like theft and fire while they are in your possession.
- Builder’s risk insurance:
Builder’s risk insurance protects equipment, materials, and structures during construction, including risks such as fire, theft, and vandalism. This insurance, also known as “course of construction insurance,” typically begins when the materials arrive at the construction site and concludes upon project completion. It can be added as an endorsement to your existing business insurance policy or purchased separately.
- Contractor’s tools and equipment insurance:
This type of inland marine insurance, often called “equipment floater insurance,” covers mobile equipment and tools transported to different worksites. It is commonly used by professionals in the construction, maintenance, and repair trades and covers various equipment and tools, including backhoes, bulldozers, forklifts, mowers, and portable tools.
- Exhibition and fine art coverage:
This coverage pertains to safeguarding valuable items like fine art during exhibition, while on loan, or in transit.
- Installation floater insurance:
Installation floater insurance covers materials installed at a job site, during transportation, or while in storage. For instance, this insurance would protect copper wire transported to a job site for installation.
- Motor truck cargo insurance:
Motor truck cargo insurance offers protection for goods and property while they are being transported in your vehicle. For example, if your business uses a refrigerated truck to deliver food to a restaurant, this insurance would cover any spoiled food in case of a car accident that causes the refrigerator to malfunction.
Read more>>Top Inland Marine Insurance Providers
Certain items are typically excluded from coverage, including artwork, contraband like alcohol and tobacco, explosives, furs, jewellery, precious metals, items stored for over 72 hours, live animals, money, property owned by your business, goods in the custody of another carrier, and shipping containers.
What is the cost of Inland Marine Insurance?
The average monthly expense for inland marine insurance stands at $14. Policyholders typically have a median policy limit of $5,000 for inland marine insurance. The specific costs you incur will be influenced by various factors, including the nature of your business, its geographical location, the extent of coverage you opt for, the value of your property, and your previous claims record.
Examples of costs for inland marine insurance based on profession are as follows:
- Building design: The annual cost for inland marine insurance in this profession is $2,508.
2. Consulting: Professionals in the consulting field can expect to pay around $1,500 per year for inland marine insurance.
3. Photo and video: The annual cost of inland marine insurance is approximately $579 for those in the photo and video industry.
4. Retail: Retail businesses typically have an annual cost of $500 for inland marine insurance.
5. Media and advertising: Professionals in the media and advertising field can expect to pay around $386 per year for inland marine insurance.
6. Food and beverage: The annual cost for inland marine insurance in the food and beverage industry is approximately $281.
7. Cleaning services: Professionals in the industry can expect to pay around $169 per year for inland marine insurance.
8. Construction and contracting: Those in the construction and contracting field typically have an annual cost of $169 for inland marine insurance.
9. Installation professionals: Professionals in the installation industry can expect to pay around $169 per year for inland marine insurance.
10. Landscaping: The annual cost for inland marine insurance in the landscaping industry is approximately $169.
It is always recommended to compare quotes from multiple insurance companies to ensure you get the best coverage at the most competitive price.
Inland Marine Insurance versus Marine Insurance
Inland marine insurance covers equipment, materials, and tools during transportation over land, such as by train or truck.
Marine insurance covers equipment, materials, and tools during transportation over water, such as by boat.
Tips for Obtaining Optimal Inland Marine Insurance
To secure the best inland marine insurance, consider the following tips:
- Bundle inland marine insurance with other business insurance policies to potentially save money. Purchasing inland marine insurance from the same insurer as your other business policies, like a business owner policy (BOP), can be cost-effective.
2. Compare quotes from various insurance companies to find the most affordable option. You can easily obtain free quotes online or by contacting an independent insurance agent.
What is the reason behind the term “Inland Marine” Insurance?
Inland marine insurance is named after ocean marine insurance, from which it is derived. While ocean marine insurance covers goods transported by sea, inland marine insurance covers goods transported by truck or train. Inland marine insurance protects businesses against loss or damage to property as it travels over land from its origin to its final destination.
Examples of inland marine claims
- A construction company specializing in landscaping files a claim under its contractor’s equipment insurance due to a fire at a construction site that caused damage to a backhoe.
2. A clothing manufacturer submits a claim to its accounts receivable insurer as it cannot collect a $25,000 invoice from a customer who has declared bankruptcy.
3. A solar contractor files a claim under their installation floater for stealing solar panels from a construction site while the contractor is on a lunch break.
Conclusion
Inland marine insurance is designed to cover materials, equipment, products, and other property transported over land. This type of insurance has its roots in ocean marine insurance, which specifically covers property transported by sea.
Various types of inland marine insurance are available, and the specific type you require will depend on the property you wish to insure. For example, if you want to insure a bulldozer, you need a contractor’s equipment floater. Similarly, you would need accounts receivable insurance if you want coverage for your accounts receivable records. It is important to note that most commercial property policies offer limited or no coverage for movable property. Therefore, if you frequently transport property away from your business premises, it is advisable to consider purchasing inland marine insurance.