Inland Marine
Also known as: Tools & Equipment Coverage, Mobile Equipment Floater
Despite the name, Inland Marine has nothing to do with boats. It's a historical term from the 1880s when policies originally covered ocean cargo plus the "inland" legs of cargo trips. Today, "Inland Marine" is the umbrella name for a family of coverages on movable business property that fall outside standard Commercial Property (which only covers property AT a fixed scheduled location).
Common Inland Marine sub-types: Contractor's Tools & Equipment Floater (most common — covers tools at job sites, in transit, and overnight in vehicles), Installation Floater (materials in transit + installed but not yet accepted by owner), Bailee's Customer Property under Care, Custody & Control (laundromat, dry cleaner, jeweler holding customer items), Computer Equipment Floater (mobile laptops, servers, AV gear), Cargo / Motor Truck Cargo (freight in transit), Fine Arts Floater (galleries, collectors, photographers), Jewelers Block, Camera Equipment Floater, and Builder's Risk (project-specific during construction).
Critical settlement basis distinction: Replacement Cost (RC) pays to replace the lost item with new equivalent at today's prices. Actual Cash Value (ACV) pays depreciated value — often 30-60% less for tools/equipment after 3+ years of use. RC adds 5-15% premium but is almost always worth it for tools and equipment that will be promptly replaced.
Real-world scenario
Diego is a hypothetical electrical contractor; his scenario illustrates how Inland Marine responds to a typical tool-theft loss. It is not based on a specific real customer, claim, or quote from any carrier.
Diego, electrical contractor — Tampa, FL (hypothetical). 4-person crew, ~$540K annual revenue, residential service calls + small commercial projects. Inventory: 1 Ford F-250 + 2 Ford Transit vans, each loaded with ~$8K-$15K of tools (drills, multimeters, conduit benders, ladders, ohmmeters, hammer drills, oscilloscope) at end of each workday. Inland Marine Tools & Equipment Floater: $50,000 blanket limit (covering tools at job sites + in transit + overnight in vehicles), $500 deductible, Replacement Cost settlement.
Thursday night, parking lot of Diego's office building. Between 11 PM and 6 AM, thieves break into both Transit vans + the F-250 in the parking lot. Stolen: 1 Fluke 87V multimeter ($475), 1 Fluke 1587 insulation tester ($1,180), 1 Greenlee benders & conduit-bending set ($2,400), 4 Milwaukee drill kits with batteries ($1,800), 2 oscilloscopes ($890 each = $1,780), 1 hammer drill kit ($550), various hand tools + ladders + meters totaling ~$8,200 across the three vehicles. Total replacement cost: $16,385. Diego files a police report Friday morning, contacts his insurance agent at 9 AM.
Inland Marine carrier requests: police report, list of stolen items with serial numbers (Diego had photographed his tool inventory + tracked serials in a Google Sheet — saved him 2 weeks of receipt-hunting), receipts where available. Settlement check arrives 11 business days later: $16,385 minus $500 deductible = $15,885 paid at Replacement Cost. Diego replaces tools at Home Depot Pro + Tool Nut over the next weekend and is fully operational Monday morning. Annual Inland Marine premium for Diego's $50K blanket: ~$48/month, $576/year (III Inland Marine benchmark 2024). Without Inland Marine, the $16K out-of-pocket would have eaten 30%+ of his quarterly profit AND left him unable to bid on the 2 commercial jobs already in his pipeline.
How it affects your premium
Inland Marine premium scales primarily with these factors:
- Total limit purchased — biggest driver. $10K blanket: ~$25/mo; $50K: ~$48/mo (industry-typical median); $100K: ~$95/mo; $250K: ~$220/mo; $500K+: custom underwriting.
- Settlement basis — Replacement Cost adds 5-15% over Actual Cash Value but pays 30-60% more on claims for older tools/equipment. Always pick RC for tools and gear that will be promptly replaced.
- Industry + tools class — heavy-tool trades (electrical, plumbing, HVAC, mechanical) carry standard rates. Specialty equipment (camera/A-V/medical/dental) often higher due to theft frequency. Heavy mobile equipment (excavators, mini-skids) needs Mobile Equipment coverage separately.
- Garage location — vehicles overnight in a residential driveway, secured fenced lot, or commercial-grade garage drive different rates. Fenced/lit/alarmed locations earn 10-20% credits.
- Geographic theft index — high-theft metros (Atlanta, LA, Houston, Miami, Chicago) carry 15-30% surcharge. Rural areas rate lower.
- Deductible — $250 vs $1,000 deductible saves 12-22%. For frequent small losses (lost ladders, broken meters), low deductible can pay off; for theft prevention, higher deductible saves premium.
- Scheduled vs blanket — "blanket" coverage applies the entire limit to any one loss (best for theft of multiple items at once); "scheduled" itemizes each piece of high-value equipment with its own sub-limit (better for single high-value items like a $25K camera). Most contractor floaters use blanket; broadcast/film/medical floaters use scheduled.
- Security controls — GPS tracking on high-value items (skids, mini-excavators, fleet vehicles with tool storage) can earn 5-10% credits. Inventory documentation with serials + photos speeds claims by 1-2 weeks.
Per the industry-typical 2024 cost report, median small-business Inland Marine premium = $48/month ($576/year); bottom quartile $25-$35/mo for low-value office equipment floaters; top quartile $200+/mo for contractors with high-value mobile equipment + cargo exposure.
Common misconceptions
Myth: My Commercial Property policy covers my tools when I take them to a job site.
Reality: No. Standard Commercial Property (and the Commercial Property portion of a BOP) covers property ONLY at the scheduled premises address. The moment your tools leave the shop for a job site or sit overnight in a vehicle, Commercial Property coverage ENDS. Inland Marine fills this gap — it follows the property wherever it goes (job site, in transit, overnight in vehicles, customer locations).
Myth: My Commercial Auto policy covers tools stolen from my work van.
Reality: Commercial Auto covers the VEHICLE + permanently-installed equipment (racks, shelving), NOT the loose tools and inventory inside it. A standard auto policy would pay to replace a smashed window or stolen ladder rack but would NOT pay for the $12K of loose tools stolen from the back of the van. Inland Marine Tools & Equipment Floater covers the loose contents — and explicitly extends to property "in transit" or "temporarily at a location."
Myth: I'll just claim my tools on my homeowner's policy if they get stolen from home.
Reality: Homeowner's policies explicitly exclude business property via the business-pursuits exclusion. A homeowner's claim for stolen contractor tools will be denied as soon as the carrier discovers they were for business use (which they always do — adjusters ask about ownership, usage, and tax treatment). Inland Marine is the only correct coverage for business tools at any location.
Frequently asked questions
How much does Inland Marine insurance cost?
What's the difference between Inland Marine and Commercial Property?
Does Inland Marine cover equipment rented to customers?
Should I choose Replacement Cost or Actual Cash Value?
Sources cited
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