How Is Construction Like a Ship? The ins and outs of inland marine insurance.

• Author: Dewalt, Sean
• Position: SAFETY CORNER

Most Alaskan contractors are knowledgeable about commercial inland marine insurance, which covers property in transit over land. Whether insuring the contractor's equipment and tools or providing builder's risk coverage for a commercial project, this important insurance helps owners sleep better knowing that unexpected losses like theft and property damage will be covered. Inland marine also covers instruments of communication, such as towers, and fixed objects like bridges and solar panels. However, there is a longer and more varied list of other items that inland marine covers, some of which may surprise even the most seasoned professionals, such as firearms, fine art, and valuable papers.

For centuries, ocean marine insurance was widely used to insure a variety of goods being shipped (cargo policies) and the vessels containing them (hull policies). Lloyd's of London issued the first actual "all risk" ocean marine policies in 1688. The Marine Insurance Act of 1906 codified laws and regulations pertaining to ocean marine insurance, solidifying the coverages and laws that hold strong today. For example, the "general average" principle of loss allocation for stakeholders is the backbone of today's insurance.

Like other insurance, inland marine insurance was invented out of necessity. In the mid-1800s, the introduction of factories, electricity, machines, and the combustion engine created new inventions needing specialized insurance coverages. These emerging risks also needed to be studied and understood by the insurers from an exposure and control standpoint. Policies were narrowed to enumerated perils, meaning only the covered items listed on the policy were covered against loss. These new policies were often called "floater policies," an insurance policy that covers personal property wherever it may be within the policy territory. This gave insurers and policyholders latitude to insure property that was not static. Railroad rolling stock, heavy equipment, and specialized tools used in construction often move, and this dynamic coverage filled in the gap of insurance options during that time. According to market research by Facts & Factors, "The demand of global Marine Insurance Market size and share was valued at approximately $26.5 billion in 2021... and is anticipated to reach over $31.5 billion by 2028." Clearly, this is a valued risk management product and has been used with success for more than 300 years.

Varieties of Risk

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