Inland Marine Rating Systems and A Brief History of this Coverage

An often-misunderstood policy, inland marine insurance provides coverage to businesses for property that is mobile in nature or requires a certain valuation that the shipper bears ownership to, or have in their custody and care. Many different types of property are covered, including those related to transportation, construction, communications, and fine art, to name a few.

Agencies can determine the cost for this coverage through a well-designed inland marine rating system. These policies are often highly complex, and therefore need a high level of knowledge by the insurer in order to anticipate any and all possible risks.

This coverage was created years ago for specific business models

Back around the 1700s, several underwriters began writing insurance on property that was being transported over inland waterways and over land by railway or truck. This was not actually considered “ocean marine” insurance, and the underwriters of ocean marine coverage didn’t have the necessary expertise to effectively underwrite these new types of exposures. The purpose of these policies was not to insure property at a fixed site.

As underwriters began realizing a need for this specialized insurance as a way to provide coverage for the expanded exposures, they needed a name for the product, since it didn’t logically fit into the fixed-site type insurance mold, nor could it be classified as “ocean marine” insurance. Since the product was actually designed to cover property for loss exposures that could move from place to place, it seemed more like “marine” insurance than, for example, standard property insurance, and they came up with the name “inland marine.”

The key was to first, decide who is responsible for those goods, and then how to appropriately insure goods in transit. It was determined that the “bill of lading” would be the factor. The bill of lading would also determine at which point in time the goods become the responsibility of the buyer as well as the obligations of the firm transporting those goods.

Property and inland marine policies cover a slew of special exposures, including everything from buildings and their contents, to bridges and radio towers, as well as artwork and electronic data. An agent with expertise in this field can help garner the most favorable rates through the use of an inland marine rating system, based on what is being insured and the amount of travel required to get the property to its destination.