Inland Marine Coverage: Stability in a Changing Landscape
The inland marine insurance market, which covers goods in transit and other movable property, demonstrates stability, with many policyholders experiencing steady or slightly decreasing rates. This market, an extension of traditional property coverage, is navigating emerging challenges, including cyber exposures and cargo theft. Despite these issues, pricing and contract terms have remained largely unaffected, according to industry sources.
Inland marine rates often follow trends in the broader property market, which recently saw rate decreases at the January 1 renewal period after a period of increases. Similar to property coverage, inland marine policies are also affected by catastrophic events, with accounts exposed to significant losses sometimes seeing smaller decreases or even rate increases, dependent on the individual risk profile.
The approach to inland marine coverage varies among insurance providers. “You could receive 10 different definitions from 10 different people on the question of what is included in inland marine,” explained Josh Jennings, senior vice president and head of inland marine and property programs at Aspen Insurance Holdings Ltd., based in Chicago. Typically, inland marine insurance encompasses four main classes: construction (including builders risk and installation), logistics (such as warehouse legal liability and motor truck cargo), equipment, and related property.
“We generally say inland marine runs the gamut from drilling rigs to fur coats. It’s a broad brush,” said Brad Cameron, senior vice president of inland marine for Sompo International Holdings Ltd.’s North America insurance business, based in Dallas. Sompo’s inland marine portfolio includes approximately 20 different coverages, ranging from transportation to builders risk, covering a wide range of clients from smaller artisan contractors to large national developers. This diversity leads to year-round activity related to policy renewals. Mr. Cameron noted that Sompo’s effective dates are spread throughout 323 days of the year, with January 1 being its sixth-largest policy volume date.
Matthew McGraw, senior underwriting director for inland marine at Liberty Mutual Insurance Co., based in Syracuse, New York, described the inland marine market as “pretty stable, with risks without claims activity generally seeing flat renewals or single-digit reductions at renewal.” Liberty Mutual’s inland marine business covers motor cargo, contractors, and equipment.
QBE Insurance Group Ltd. classifies inland marine coverage as transportation and logistics, along with equipment, with a heavy emphasis on construction-related exposures, commented Sharon Primerano, vice president and U.S. inland marine manager for QBE International Markets, based in New York. “There’s going to be a lot of contractors’ equipment in there, but it could also be entertainment equipment, medical equipment, all types of mobile equipment,” she added.
Rates are “largely stable,” with transportation possibly seeing some increases, according to Primerano. QBE launched its inland marine unit at the end of 2024.
Ken Mueller, head of inland marine Americas and global chief underwriting officer, inland marine, for Axa XL, a unit of Axa SA, based in Atlanta, noted that the inland marine market generally tracks with property trends because the risks are property-driven. However, regional occurrences, such as tornadoes, convective storms, hurricanes, and wildfires, can affect the market. Axa XL’s inland marine business typically encompasses exposures related to construction and transportation. Capacity for most risks is ample, though certain areas, such as wind coverage in Florida, may experience limitations.
Rick Bridges, vice president, supply chain and logistics, for Lockton Cos. LLC, based in New York, explained that the breadth of coverage provides policies for a wide range of clients.
Nicole McMurtry, president of USI Insurance Services LLC’s Illinois transportation practice, based in Schaumburg, Illinois, leads a team of 22 employees focused on trucking. John Flocco, executive vice president, design and construction, for USI, based in Denver stated that on the construction side, “it really is equipment, it’s cranes, it’s heavy equipment, but it’s also tools, generators, job site trailers.”
Inland marine coverage is highly customizable. “Inland marine is the form that you can manuscript to no end. It includes stuff that you wouldn’t think would be possible to insure,” stated Andrew Johnson, vice president, account executive, for Lockton, based in Houston.
Janelle Griffith, New York-based North American logistics practice leader for Marsh LLC, explained, “There are times when certain types of property or equipment don’t fit within a property schedule or don’t fit within property coverage for a client. Then they’ll look to the inland marine market to see if that’s something that we can place independently.”
Growing Cyber Exposures in the Digital Supply Chain
The increasing use of location tracking, automated ordering, and fulfillment tools in transportation and logistics is creating new supply chain risks
that impact inland marine policyholders. “It’s definitely part of our world, and I think in terms of the cyber marketplace, they’re getting a better understanding of supply chain risks and just how indebted the industry is to technology,” said Rick Bridges, vice president, supply chain and logistics, for Lockton Cos. LLC.
From an exposure perspective, “we have some markets that will provide elements of cyber coverage; others will exclude it,” he said, adding it is critical to examine the terms and conditions of coverage. Brokers may need to coordinate with their company’s cyber coverage division to confirm that fraud, which often involves elements of both cyber and crime exposure, is appropriately covered
According to Nicole McMurtry, president of USI Insurance Services LLC’s Illinois transportation practice, “there is a massive amount of cyber fraud going on” related to cargo theft.
“Cyber is absolutely part of our world.”
One recent cargo theft event, facilitated by a compromised email account, raised questions regarding coverage under cyber, motor carrier liability, or other relevant policies. Ms. McMurtry noted that among the stolen items were high-value goods, including shipments of pharmaceuticals and electronics.
Construction equipment is becoming increasingly sophisticated, leading to vulnerabilities like ransomware attacks, said John Flocco, Denver-based executive vice president, design and construction, for USI. “This is where we do work with our cyber people. We have to have a unified approach to this and make sure that there is a policy that will be triggered” in such an event, he stated.
“The more we use technology, the more these digital systems are essentially exposed to business interruption and to hijacking,” said Janelle Griffith, New York-based North American logistics practice leader for Marsh LLC. “Cybersecurity risks in logistics and inland marine are absolutely real, and they’re things that we’re talking about on a regular basis.”
