Inland Marine Insurance: Property in Transit and Floaters

For many students preparing for the complete Claims Adjuster exam guide, the term "Inland Marine" can be confusing. Despite the name, it has very little to do with watercraft in the modern era. Instead, Inland Marine insurance covers property that is mobile, in transit, or held by a third party. It evolved from Ocean Marine insurance to cover goods once they were offloaded from ships and transported across land by rail or truck.

Today, Inland Marine is a broad field of insurance that fills the gaps left by standard property policies. While a standard Homeowners or Commercial Property policy typically limits coverage to property located at a specific premises, Inland Marine policies "float" with the property wherever it goes. This makes it essential for high-value items, construction equipment, and goods being shipped across the country. To master this topic for the exam, you should focus on the Nationwide Definition and the specific types of floaters used in both personal and commercial lines.

The Nationwide Marine Definition is a regulatory document used to classify which types of risks may be written under Inland Marine or Ocean Marine insurance. For the adjuster exam, you must recognize the six categories of risks it defines. While Imports and Exports are often handled by Ocean Marine, the remaining four are the core of Inland Marine.

One unique category is Instrumentalities of Transportation and Communication. This covers property that is not necessarily mobile itself but is essential to the movement of goods or information. Examples include:

• Bridges and tunnels.
• Piers, wharves, and docks.
• Radio and television towers.
• Power transmission lines.
• Pipelines.

Because these structures are exposed to unique risks and are vital to commerce, they are classified under Inland Marine rather than standard commercial property forms.

When goods are moving from a seller to a buyer, the risk of loss is high. Adjusters must understand who is responsible for the property at any given time. This is often determined by the Bill of Lading, a contract between the shipper and the carrier that identifies the contents and the terms of transport.

Key transit coverages include:

• Motor Truck Cargo Policy: Covers the liability of a carrier for damage to the property of others while it is being transported. There are two forms: the Truckers Form (for common carriers) and the Owner's Form (for businesses transporting their own goods in their own trucks).
• Annual Transit Policy: Used by businesses that ship or receive goods frequently throughout the year. It covers all shipments made during the policy period.
• Trip Transit Policy: Used for a single, specific shipment. This is common for individuals moving household goods or businesses making an occasional high-value shipment.

When studying for practice Claims Adjuster questions, remember that common carriers are held to a standard of Strict Liability for the cargo they carry, with few exceptions (such as Acts of God or exercise of public authority).

The Contractors Equipment Floater is the largest class of Inland Marine insurance. Unlike buildings, construction equipment—such as bulldozers, cranes, and power tools—is constantly moving from one job site to another. A standard commercial property policy usually limits coverage for property away from the main premises to a small sub-limit (often $2,500 or $5,000).

The Contractors Equipment Floater provides broad, open-peril coverage for this machinery wherever it is located: at the job site, in storage, or in transit between the two. Adjusters handling these claims must be diligent in verifying the Scheduled Limit for specific high-value items versus the blanket limit for smaller tools.