Commercial Inland Marine Applications

Inland Marine Fundamentals and Coverage Structures

Commercial inland marine insurance covers property in transit, movable equipment, and instrumentalities of transportation or communication. The Nationwide Marine Definition identifies classes of marine risks for regulatory purposes; it does not determine what a particular policy covers. In practice, commercial inland marine often covers movable property, property in transit, specialized property, or property held for others. A floater is a policy or endorsement designed to cover movable property at covered locations and during covered movements, subject to its territory and other terms. While the policy territory varies by form, many commercial inland marine forms cover described property in the United States, its territories and possessions, and Canada.

Forms are often grouped as filed or nonfiled, but filing requirements vary by state. Filed inland marine forms and applicable rates or rating rules are submitted to state regulators as state law requires; filing does not always require prior approval. In contrast, nonfiled inland marine forms can be tailored to specialized risks, subject to applicable state insurance rules. Regarding perils, some commercial inland marine forms cover direct physical loss unless excluded, while others cover only listed causes of loss, so you must always check the form.

When insuring items on a floater, property can be structured as scheduled or blanket. Under scheduled inland marine coverage, covered items are individually identified; check the policy to see whether each item has a separate limit or shares a limit. You should promptly report additions or removals of scheduled equipment to the insurer so covered items and limits stay current. Under blanket inland marine coverage, a single lump-sum limit applies to all covered property across one or more locations. A blanket limit can accommodate changing values among covered items, but coverage for newly acquired property depends on the policy terms.

Valuation in commercial inland marine forms can be based on actual cash value, replacement cost, or an agreed value. If an inland marine form has a coinsurance condition, it requires a limit equal to at least a specified percentage of the covered property value. If coinsurance applies and the insured carries less than the required limit, payment for a covered loss may be reduced under the policy coinsurance formula. Furthermore, some commercial inland marine forms provide additional coverage for debris removal or pollutant cleanup, subject to their terms and limits.