Inland Marine Insurance
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A contractor's $80,000 excavator gets stolen from a jobsite overnight. An HVAC company's copper piping shipment is destroyed in a highway accident. A landscaper's trailer full of mowers rolls off at a curve and tumbles down an embankment. These aren't hypothetical scenarios: they happen every week across the country, and standard business insurance often leaves the owner holding the bill.
Inland marine insurance exists precisely for these situations, covering tools, equipment, materials in transit, and goods being installed at a client's location. The inland marine market is predicted to reach $35 billion by 2024, reflecting how many businesses rely on mobile assets that don't sit safely inside a single building. If your livelihood moves between locations, this is the coverage gap you can't afford to ignore.
Understanding what inland marine policies actually cover, how they differ from standard property insurance, and which specific floater types match your business is the difference between a manageable setback and a financial catastrophe. Here's what every business owner needs to know about protecting tools, equipment, installation materials, and property in transit.
Defining Inland Marine Insurance and Its Role in Modern Business
Inland marine insurance is one of the most misunderstood coverage types in commercial insurance. The name itself throws people off: there's nothing "marine" about insuring a contractor's tools on a truck. The category traces its roots to ocean cargo insurance from the 1700s, and as commerce moved inland by rail and road, the coverage followed. Today, the Insurance Information Institute describes inland marine as a "catch-all" for all goods in transit over land, plus property that's mobile or unusual enough that standard policies can't properly cover it.
The U.S. inland marine industry has posted 20 consecutive years of underwriting profitability, with a net combined ratio of 84.2 in 2024. That profitability tells you something important: claims are frequent enough to justify the product, but predictable enough that insurers can price it fairly. For business owners, that means competitive premiums and broad availability.
Why Standard Property Insurance Falls Short for Mobile Assets
A commercial property policy covers your building and the stuff inside it. The moment equipment leaves your premises, coverage either vanishes or drops to a fraction of the asset's value. Most commercial property policies include an "off-premises" extension, but it's typically capped at 10% of total insured value and riddled with exclusions for theft, weather damage, and transit losses.
Think about it this way: if you own a plumbing company with $200,000 in tools and equipment spread across five service vans, your property policy might cover $20,000 total for off-site losses. That's one van's worth of inventory. Inland marine fills this gap with coverage designed specifically for assets that travel.
The Difference Between Ocean Marine and Inland Marine Policies
Ocean marine covers goods transported over water: container ships, cargo vessels, and port operations. Inland marine covers everything that moves over land, plus certain types of property that are mobile by nature (think construction equipment, fine art on loan, or telecommunications towers).
The distinction matters because inland marine policies are filed and regulated differently than standard property forms. They offer broader coverage terms, more flexible valuation options, and can be tailored to specific industries. A single inland marine policy can cover your tools on a truck, materials at a jobsite, and equipment stored at a temporary location: all under one form.
By: Tod O’Dowd, CIC, CAPI
President of Avery Insurance Agency
Protecting Mobile Assets: Tools and Equipment Coverage
Tools and equipment floaters are the most common type of inland marine policy, and for good reason. Contractors, service companies, and trades professionals carry thousands of dollars in gear every day. Typical costs run between $0.80 and $3.00 per $100 of equipment value, averaging around $800 per year for $100,000 worth of equipment. That's a small price for peace of mind when a single theft could wipe out your working inventory.
Small Tools vs. Scheduled Heavy Equipment
Insurers handle tools and equipment in two distinct buckets. Small tools: hand tools, power tools, and items under a certain value threshold (usually $1,000 to $5,000 each): are covered on a blanket basis. You declare a total value, and the policy covers losses up to that amount without itemizing every drill and saw.
Heavy equipment like excavators, skid steers, and boom lifts gets scheduled individually. Each piece is listed with its serial number, year, make, model, and agreed value. Insurance companies generally charge roughly 4% on the value of miscellaneous tools and equipment, though rates for scheduled heavy equipment can be lower since those items are harder to steal and easier to track.
One practical tip: GPS tracking can earn 15-35% premium discounts from most commercial insurers. If you're running a fleet of equipment worth six figures, those savings add up fast.
Coverage for Rented, Leased, or Borrowed Gear
Here's where things get tricky. Rental agreements almost always include a clause making you responsible for damage or theft. The rental company's insurance (if they offer it) is expensive and limited. Your inland marine policy can extend to cover rented or leased equipment, but you need to confirm this with your agent.
At Avery Insurance Agency, our consultative approach specifically addresses these gaps. We've seen too many contractors assume their policy covers a rented crane, only to discover after a loss that it doesn't. The fix is simple: make sure your policy includes a "rented equipment" endorsement or a separate rental equipment floater.
Installation Floaters for Contractors and Specialized Trades
Installation floaters protect materials and equipment from the moment they leave a supplier's warehouse until they're installed, tested, and accepted by the property owner. This is critical coverage for contractors handling expensive materials like HVAC systems, electrical panels, custom cabinetry, or solar arrays.
Insuring Materials from Warehouse to Jobsite
A typical scenario: you purchase $50,000 in materials for a commercial build-out. Those materials sit in your warehouse for a week, get loaded onto a truck, travel to the jobsite, and sit in a staging area for days before installation begins. At each stage, different perils threaten the goods: theft from the warehouse, collision damage during transport, vandalism at the jobsite.
An installation floater covers the full chain. Without one, you'd need separate policies for storage, transit, and jobsite exposure, and you'd still have gaps. The floater follows the materials regardless of location.
Protection During the Installation and Testing Phase
Coverage doesn't stop when materials arrive at the jobsite. Installation floaters protect against damage during the actual installation process and through a testing or commissioning period. If a newly installed HVAC system suffers damage from a power surge during testing, the floater responds.
Most policies also cover materials already installed as part of a structure until the project reaches substantial completion or the owner accepts the work. This is a critical window: once materials become part of a building, the property owner's insurance should take over, but timing gaps happen constantly.
Securing Goods on the Move with Property-in-Transit Coverage
Property-in-transit coverage protects goods while they're being transported from one location to another. This sounds simple, but the details matter enormously depending on who owns the goods and who's doing the hauling.
Motor Truck Cargo vs. Owners Goods in Transit
These two policy types serve different parties:
| Feature | Motor Truck Cargo | Owner's Goods in Transit |
|---|---|---|
| Who buys it | Trucking companies and freight haulers | Businesses shipping their own goods |
| What it covers | Cargo belonging to others | Your own property during transport |
| Legal basis | Carrier's liability to shippers | First-party property protection |
| Typical limits | Per-truck and per-occurrence | Blanket or scheduled |
| Common buyers | Freight companies, delivery services | Manufacturers, distributors, contractors |
If you're a manufacturer shipping your own products to customers using your own trucks, you need an owner's goods in transit policy. If you hire a trucking company, their motor truck cargo policy should cover your shipment, but carrier liability limits are often far below the actual value of what's being shipped.
Common Exclusions and Perils in Transportation Policies
Transit policies typically exclude losses from improper packing, inherent vice (goods that spoil or degrade naturally), and delays. War, nuclear hazard, and government seizure are standard exclusions across all property insurance.
The exclusion that catches most businesses off guard is the "unattended vehicle" clause. If a driver parks a loaded truck overnight at an unsecured lot and the cargo gets stolen, many transit policies won't pay. Requiring drivers to use secured, fenced parking with surveillance is both a risk management best practice and often a policy condition.
Determining if Your Business Needs an Inland Marine Policy
Not every business needs inland marine coverage, but far more businesses need it than currently carry it. The question isn't complicated: do your valuable assets regularly leave your premises?
Industries that Benefit Most from Specialized Floaters
- Construction contractors (general, electrical, plumbing, HVAC)
- Landscaping and tree service companies
- IT service providers transporting servers and networking equipment
- Caterers and event companies moving expensive kitchen gear
- Medical equipment suppliers
- Telecommunications installers
- Artisans and craftspeople attending trade shows
If your business fits any of these profiles, an inland marine policy isn't optional: it's essential.
Evaluating Risk Factors and Valuation Methods
Two valuation methods dominate inland marine policies: replacement cost and actual cash value. Replacement cost pays what it costs to buy a new equivalent item. Actual cash value deducts depreciation, meaning a five-year-old piece of equipment might only be covered for a fraction of what you'd need to replace it.
Always push for replacement cost coverage on critical equipment. The premium difference is modest, but the claims difference is enormous. A $60,000 excavator with five years of depreciation might only pay out $30,000 under an actual cash value policy: not nearly enough to get you back to work.
Best Practices for Selecting and Managing Your Coverage
Getting the right inland marine policy starts with an accurate inventory. List every piece of equipment, its current replacement value, and where it typically operates. Update this list at least annually, and notify your agent whenever you purchase or sell major equipment.
Work with an agency that understands your industry. Avery Insurance Agency has spent over 125 years building the expertise to identify coverage gaps that generic online quotes miss entirely. A consultative approach means your agent reviews your operations, contracts, and risk exposures before recommending coverage: not after a claim reveals a problem.
Keep detailed records of serial numbers, purchase receipts, and photos. When a claim happens, documentation is everything. Insurers process well-documented claims faster and with fewer disputes. Store this information digitally, backed up to the cloud, so a fire or theft at your office doesn't destroy the proof you need.
Review your policy limits every year. Equipment values fluctuate, and your business grows. A policy that was adequate two years ago might leave you 30% underinsured today.
Frequently Asked Questions
Does my general liability policy cover stolen tools? No. General liability covers bodily injury and property damage you cause to others. It does not cover your own property. You need an inland marine or tools and equipment floater for that.
How much does inland marine insurance typically cost? Most businesses pay between $0.80 and $3.00 per $100 of equipment value. A company with $100,000 in covered equipment might pay around $800 per year.
Can I bundle inland marine with my other business insurance? Yes. Many insurers offer inland marine as an endorsement to a business owner's policy (BOP) or as a standalone policy. Bundling often reduces total premiums.
What's the difference between a floater and an inland marine policy? A floater is a type of inland marine policy. The term "floater" simply means the coverage "floats" with the property wherever it goes, rather than covering a fixed location.
Do I need inland marine insurance if I only work at one jobsite?
If your tools and equipment travel to that jobsite from your shop or home, yes. The moment assets leave your insured premises, standard property coverage is limited.
ABOUT THE AUTHOR:
Tod O’Dowd, CIC, CAPI
I'm the President of Avery Insurance Agency, a family-owned independent agency serving individuals and businesses across New England and in 40+ states. With a hands-on, consultative approach to personal and commercial risk, I help clients — from high-net-worth homeowners and contractors to restaurant owners and property managers — find the right coverage without the guesswork of working with a single-carrier agent.
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