In this guide
Inland marine insurance covers business property that moves, is stored away from your premises, or is too specialized for a standard property policy. Despite the name, it has nothing to do with boats. It is the usual home for contractors' tools, installed materials, camera and audio gear, goods being hauled and similar items, often through a "floater" that follows the property wherever it goes. If your tools sit in a truck or on a job site, this is the coverage to understand.
Key takeaways
- Inland marine insurance generally covers property in transit, at temporary job sites or held by others, while standard property policies focus on a fixed location.
- Common forms include contractors' equipment floaters, installation floaters, motor truck cargo, bailee coverage and builder's risk.
- Coverage can be "scheduled" (listed items) or "blanket" (a total limit).
- Check valuation, theft conditions and exclusions such as mysterious disappearance or unattended vehicles.
- Vehicles themselves are insured under auto policies, not inland marine.
What "inland marine" means
The term comes from the history of marine cargo insurance. Ocean marine covered goods at sea, while inland marine covered goods moving over land. Triple-I explains that inland marine insurance applies to products, materials and equipment while transported over land by truck or train or temporarily stored by a third party, and that it can cover someone else's property that is temporarily in your possession.
Triple-I also draws the key contrast: business owner's policies and commercial package policies generally cover property at a specific location, and tools that travel to nearby job sites may also be covered, while inland marine addresses property that moves or sits off-site and can cover high-value items that basic property coverage often excludes. Triple-I names collisions and cargo theft as the two most frequent causes of inland marine losses.
Common types of inland marine coverage
| Coverage | What it protects | Who often uses it |
|---|---|---|
| Contractors' equipment floater | Tools and equipment you own, wherever they are, such as saws, generators and compressors | Contractors, landscapers, handymen |
| Installation floater | Materials from the time they are loaded onto a truck until installed or put to use (per Triple-I) | Electricians, plumbers, flooring and HVAC firms |
| Builder's risk | A structure and its materials during construction or renovation | General contractors, developers, owners |
| Motor truck cargo | Clients' goods while you transport and deliver them | Couriers, movers, delivery and trucking businesses |
| Bailee's customer coverage | Customers' property left in your care, such as at a repair shop or warehouse | Repair shops, dry cleaners, storage businesses |
| Camera, music and electronics floaters | Portable, high-value gear | Photographers, event businesses, musicians |
| Fine arts and exhibition | Valuable items on display, in transit or on loan | Galleries, collectors, event planners |
Other forms exist, including coverage for computers and electronic equipment, valuable papers, signs, and trade show property. Insurers may use different names, so look at what the form covers rather than only the label.
How it differs from commercial property and auto
- Commercial property protects buildings and contents at listed locations. A policy may offer limited coverage for property away from premises, often at a low sublimit. See commercial property insurance.
- Commercial auto covers the vehicle and liability for driving it. It generally does not cover tools or cargo inside, unless added. See commercial auto insurance.
- Inland marine follows the property and fills the gap between the two.
A frequent gap: a contractor's truck is stolen with $15,000 in tools. The auto policy may pay for the truck under comprehensive coverage but exclude the tools, and the property policy may apply only a small sublimit to property away from the building. An equipment floater is designed to cover that situation.
Scheduled vs. blanket coverage
Scheduled
You list each item, often with a serial number and value. This is useful for expensive equipment because each has a stated limit, and it can make claims clearer. The downside is that new purchases must be added.
Blanket
You insure a group of items with a total limit and a maximum per item. This works well for many small tools. Be careful that the per-item cap is not below your most expensive pieces, and that the total reflects current replacement costs.
Valuation and deductibles
Ask how a loss is paid. Options usually include replacement cost, actual cash value or an agreed value. Replacement cost pays to replace with a new item, while actual cash value subtracts depreciation. Older tools may be valued far lower on an actual-cash-value basis. For the general idea, see our article on replacement cost vs. actual cash value. Deductibles are commonly a flat dollar amount, and some policies apply a higher deductible for theft.
What is commonly excluded or restricted
- Mysterious disappearance and inventory shortage, meaning losses discovered only during an audit with no evidence of cause.
- Theft from unattended or unlocked vehicles, or theft without visible forced entry, depending on the form.
- Wear and tear, rust, corrosion, mechanical breakdown and gradual deterioration.
- Employee dishonesty, which usually belongs to crime coverage.
- Flood and earthquake on some forms, or limited coverage.
- Rented or borrowed equipment, unless endorsed or the form includes rented equipment coverage.
- Vehicles, aircraft and watercraft, which belong under other policies.
- Loss of income when equipment is down. Rental reimbursement or business income may be added on some floaters.
Watch out: Some theft conditions require specific security steps, such as locked storage or visible forced entry. Learn those conditions before a loss happens, not after.
Who should look at inland marine
If your business depends on tools or gear that leave your location, it is worth asking. Examples include:
- Contractors and trades with tools, ladders and power equipment.
- Landscapers with mowers, trimmers and trailers.
- Cleaning businesses carrying commercial vacuums and floor machines.
- Photographers, videographers, DJs and event businesses with portable gear.
- Mobile food operators, such as a food truck with equipment that is not permanently installed.
- Businesses that transport others' goods or hold customer property.
Triple-I notes that a business owner's policy may be adequate for many firms, while frequent shippers of high-value items may want a separate policy. A BOP can include some tool coverage, so check its off-premises limits first. Our BOP guide explains the bundle.
Steps to insure tools and equipment
- Make a list. Record each item, its serial number, purchase date and current replacement cost, with photos.
- Check existing coverage. Look at property and auto policies for off-premises sublimits and exclusions.
- Decide scheduled or blanket. Mix them if you have a few costly items and many smaller ones.
- Review valuation. Replacement cost is often more favorable than actual cash value for working tools.
- Examine theft rules. Learn how vehicle and job site storage affect claims.
- Compare quotes. Gather quotes from several insurers for similar limits and compare the conditions, not just price.
- Update annually. Add new purchases and remove sold items.
Frequently asked questions
Is inland marine insurance only for contractors?
No. It is used by many businesses with portable equipment or goods in transit, including photographers, event companies, delivery services and repair shops.
Does my commercial auto policy cover tools in my truck?
Generally not. Auto policies are designed for the vehicle and liability from driving it. Tools are usually considered business property, so they need property or inland marine coverage.
Does inland marine cover equipment I rent?
Only if the policy includes rented or leased equipment coverage or you add it. Rental contracts often make you responsible for loss, so check your agreement.
What is a floater?
A floater is a policy or endorsement that covers specified property wherever it is, instead of tying coverage to one address. A contractors' equipment floater is a common example.
Does inland marine insurance include liability?
Usually not. It is first-party property coverage. Liability claims are generally covered by general liability and other liability policies.
Sources
- Triple-I – Understanding inland marine insurance
- Triple-I – Understanding business owners policies (BOPs)
- Triple-I – Small business property insurance
- U.S. Small Business Administration – Get business insurance
General information only. This guide explains general concepts and is not insurance, legal or financial advice. Rules and prices vary by state and insurer. Check your policy documents and speak to a licensed insurance professional or your state insurance department about your situation.