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Important Trends Impacting Inland Marine Insurance

Jul 12, 2022

A variety of trends鈥攊ncluding gas shortages, shipping delays, inflation, extreme weather, and the COVID-19 pandemic鈥攈ave significantly impacted the Inland Marine Insurance industry. This unprecedented volatility has led to increased rates, new exclusions, and tighter policy terms to limit losses.

Inland Marine Insurance provides coverage for movable property (goods and products) that are on the ground – whether by rail, truck, car or other mode of ground transportation. This includes coverage for movable property related to the following industries:聽 construction, logistics, energy, agriculture, fine arts and species, and more.聽 If your clients鈥 companies have assets that are under construction, frequently move equipment to different locations, or transport products, Inland Marine Insurance provides critical protection from damage or loss.聽

Inland Marine Insurance policies help cover the costs to repair or replace property that is damaged due to events such as theft, fire, or flooding, or various other accidents or mishandling. A standard Commercial Property policy, in contrast, is designed to protect the assets at your client鈥檚 business address (a stationary location) and often provide low sub limits for Inland Marine coverage.聽

Our specialized marine experts are here to break down some important trends currently impacting Inland Marine Insurance:

  • Rising gas prices. As pandemic travel restrictions lift, the Russia-Ukraine conflict continues, and fuel prices soar, gas is facing new levels of limited supply and increased demand. During the COVID pandemic, demand for gas was reduced, as people were quarantined, working from home, and not traveling. These factors helped keep oil and gas prices low. When the pandemic ended, demand for gas increased. Then Russia鈥攐ne of the top three global oil producers鈥攊nvaded Ukraine, and the conflict spurred fear that the Russian supply might be disrupted. Gas prices hit of $5.016 in June 2022, and, as of early July 2022, the prices had fallen to $4.779 per gallon, according to AAA.

  • Shipping delays. There鈥檚 no denying that shipping delays have been a major challenge in recent years. A well-known example is the and blocked the entire canal for six days in March 2021, freezing nearly $10 billion in trade each day. Transit was backed up, as ships were rerouted around the area. Today, shipping challenges continue, and staffing shortages compound the delays. There aren鈥檛 enough laborers to unload cargo from incoming ships, which is leading to massive backups at harbors. Whereas it used to take ships a few weeks to make passage, now it鈥檚 taking longer.

  • Increased extreme weather events. Wildfires, hurricanes, tornadoes, and other destructive weather events are on the rise due to . These weather events are happening more frequently, with greater severity, and across more areas鈥攏ot just coastal locations. This includes,, and. These events are, of course, in addition to coastal flooding,, and other damaging weather occurrences. In response, Inland Marine carriers must now model accordingly for increased weather risks and higher exposures.

  • Construction disruptions. Suppose your client鈥檚 company sends equipment or materials to a construction site, but the project has been delayed, suspended, or canceled because vendors can鈥檛 source supplies or they can鈥檛 find enough qualified workers to finish the job. In this scenario, the equipment and materials at the paused job site may be stolen. Your client may need longer terms on their insurance policies due to an indefinite project delay. The unoccupied construction site now has more exposures, with higher risk of theft, vandalism, flooding, fires, and other damage. Some carriers are limiting the number of endorsements insureds can have on a policy. Previously, they may have been willing to extend a Builders Risk policy two or three times over, but they鈥檙e not always giving those extensions now. So, if your client鈥檚 project is only half built and they鈥檝e already used up their policy, it鈥檚 more difficult than ever to gain extensions because of these delays.
  • Inflation. The Consumer Price Index (CPI) , the largest yearly inflation increase since 1982, according to the Bureau of Labor Statistics. While we鈥檙e all feeling the sting of the high costs of groceries and gas, it鈥檚 also important to understand how inflation impacts insurance costs. For instance, the prices of lumber, soybeans, corn, wheat, and many other products are increasing, which means that companies now have to spend more money to insure the same products with the inflated prices. Carriers want these items to be insured to value and are strict about enforcing this.

Jencap has specialized Inland Marine expertise to protect your clients’ property and manage their risks for construction projects, inventory in transit, and much more. For advice on this topic, or to obtain comprehensive coverage that protects your clients’ valuable businesses, contact us.

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If your risk has wheels, 麻豆放映免费鈥檚 transportation and garage team has a broad range of insurance solutions for you. Our industry-leading underwriters are always imagining what鈥檚 ahead of the curve in the transportation industry and ready to combat any current or future challenges that may exist in the marketplace.
inland marine coverage | inland marine insurance | market trends | Transportation | transportation coverage | transportation insurance | trends

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