Commercial Inland Marine Insurance Policies

Coverage the policy provides:

• Commercial property policies are basically designed to insure property at fixed locations; they provide only very limited coverage on property that is away from scheduled locations or in transit from one location to another. Commercial inland marine policies on the other hand are designed to address the mobile nature of property and the unique hazards to which it is exposed. 

• Since the property to be insured is of a mobile nature, the commercial inland marine policy covers the property regardless of its location, provided that it is within the policy territory.  The most common policy territory on commercial inland marines policies is the United States and Canada.  

Important notes to discuss with your agent:

• Property on commercial inland marine policies can be written on a scheduled basis, a blanket basis, or some combination of the two. In scheduled policies, only the items listed in the policy’s schedule of covered equipment are covered.

• In blanket policies, coverage applies to all qualifying equipment; there is no schedule of covered equipment in the policy (although the insured usually is required to submit a schedule for purposes of premium calculation).

Losses covered:

• As is true of property insurance generally, commercial inland marine policies can be written on either a named perils or an all risks basis. Named perils policies only cover losses from the causes that are listed in the policy as covered.

• All risks policies cover loss from any cause that is not limited or specifically excluded in the policy. The majority of inland marine policies are written on an all risks basis. However, named perils coverage is not unheard of.

How losses are compensated:

• Commercial Inland Marine policies are typically written on an actual cash value basis rather than on a replacement cost valuation basis.  Although insurers are often unwilling to cover commercial inland marine property on a replacement cost basis, replacement cost coverage may be available on specified, newer property, with all other property covered on an actual cash value basis.

• Alternatively, the policy may stipulate that property with a model year falling on or after a specified date is covered on a replacement cost basis. Some forms provide replacement cost coverage for partial losses that are less than a stated percentage (such as 20 percent) of the value of the property.

Important Note: Commercial inland marine policies, like other types of property policies, are nearly always written subject to a deductible. Policies covering relatively small schedules of equipment usually impose a flat dollar per-occurrence deductible.