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Let me ask you a question: how much of your business property is actually located at your primary business location?
If you’re like many businesses today, probably not all of it.
Most businesses have some property in transit, in storage, or in a temporary location, at least some of the time.
As an insurance agency, we at Berry Insurance were one of the few types of businesses who didn’t really have to worry about this … until recently. When the COVID-19 pandemic hit, suddenly we had employees bringing laptops and other equipment to and from the office and their home. And we know we aren’t alone in this.
But did you know that property outside your primary business location might not be covered on your property insurance policy?
In the article below, we’ll fill you in on everything you need to know to make sure all your property (both inside and outside of your business location) is covered.
Let’s review what commercial property insurance covers:
As you probably know, your business property is covered under your commercial property insurance. But as we mentioned above, any property outside of your business location might not be covered. But before we get ahead of ourselves, let’s review what commercial property insurance generally covers.
A commercial property insurance policy will cover all of the physical property you have for your business. This includes things such as furniture and equipment, supplies, computers, inventory, customer’s goods, and signage.
The policy will provide financial reimbursement (subject to your deductible and coverage limits) to help recover the cost of items damaged, lost or destroyed from various incidents including:
- Fire
- Theft and vandalism
- Storm damage (except flood or seepage from rain)
- Explosions
- Water backup (optional)
- Earthquakes (optional)
This type of coverage also provides some loss of income if one of these instances temporarily closes your business.
If you had damage to your property, you would simply need to file a claim with your insurance company, and they would reimburse all repairs and replacements up to the coverage limits you selected on your policy, subject to your deductible.
To learn more about commercial property insurance, check out this article: What is Commercial Property Insurance?
Insuring property in transit:
So what happens when your property is being transported?
Does commercial property insurance cover it? Does commercial auto cover it?
The answers are no and no.
Commercial property insurance usually only covers property at your primary location. Commercial auto insurance doesn’t usually cover items in your vehicle.
For that, you’d need inland marine insurance coverage.
What is inland marine insurance?
Inland marine is a “floater” policy, meaning the coverage travels with the insured items. Rather than covering the property in a specified location like property insurance does, inland marine covers the specified property in any location on the land. (If it’s on the sea, you’d need marine insurance.)
Any items insured under an inland marine policy are covered in any location they may be in (subject to deductible and coverage limits) including:
- Fixed locations
- In transit
- In storage
- At a temporary location
This type of policy covers all the causes of damage normal property insurance does, but may even have some broader covered causes of loss.
For example, commercial property insurance usually only covers water damage if it’s a result of a covered cause of loss or damage to the storage unit and will not cover for flooding or water seepage. But inland marine could cover all types of water damage.
This policy may also cover mysterious disappearance of items when they are lost, or damage from accidental drops, however, specific coverages will vary from policy to policy.
Do I need inland marine insurance:
If you keep any property outside of your business premises, an inland marine policy could be right for you.
- Companies who transport business property
- Companies with remote employees
- Companies that haul equipment to worksites
- Companies that use mobile equipment like forklifts, or tractors
- Companies with employees who rent vehicles on business trips
Essentially, any scenario where valuable property moves outside the office can call for inland marine.
Inland marine cost:
The cost of inland marine will depend directly on the amount of coverage you need for your property, and the deductible you choose.
Generally, we tend to see these policies run anywhere from $1,000 to $3,000 per year, but again this depends on the amount of property and how it is used.
You may be able to save some money by bundling it with your other business insurance policies such as property insurance or general liability insurance. Check with your agent to see if you can bundle with your existing policy, or if you need a separate policy.
Cover your on-the-road property
Don’t neglect your property in transit!
We mean it. Just because you may not see it that often, doesn’t mean it isn’t essential.
And your commercial property insurance may not protect it, so you need to be sure to contact your agent to see if you may need an inland marine policy.
And while you have your agent’s attention, it may be a good idea to conduct a thorough review of your commercial insurance. In addition to property in transit, there are so many other changes factors of your business that could prompt changes in your insurance to ensure you are adequately covered. Read this article to learn what you need to review, and why it is important.
