In the dynamic landscape of construction, companies face an array of evolving risks that threaten their operations and financial stability. Inland marine insurance has become an indispensable safeguard, offering protection tailored to the unique challenges of the industry. Here are just a few reasons why construction companies need inland marine coverage more than ever:
Increased Theft and Vandalism on Job Sites
Construction sites have increasingly become targets for theft and vandalism, with valuable tools, materials, and heavy equipment at risk. According to the National Equipment Register (NER), construction site thefts in Canada result in annual losses of up to $1 billion. In the U.S., it is estimated that around $1 billion worth of construction equipment is stolen each year with an average cost of a single incident being roughly $30,000. Standard property insurance often falls short in covering losses that occur off-site or in transit. Inland marine insurance fills this gap by providing coverage for movable property, ensuring that assets are protected wherever they are located.
Supply Chain Disruptions and Rising Equipment Costs
The construction industry continues to face supply chain disruptions and an increase in equipment costs due to reduced production, high demand, and logistical delays, according to Risk & Insurance. These challenges lead to longer lead times and heightened expenses for replacing stolen or damaged equipment, increasing the risk of underinsurance. Inland marine policies can be tailored to reflect current replacement values, offering more accurate coverage.
Extreme Weather Events Impacting Construction
Both the severity and frequency of weather events, such as wildfires and hurricanes, have greatly increased, creating more risks for construction sites. Climate Gov discovered that in 2024, the U.S. experienced 27 separate weather-related disasters. Each of these events caused a minimum of $1 billion in damage. As weather-related risks continue to escalate, having the right coverage is critical. Inland marine insurance is critical for protecting property in transit at different sites, guaranteeing construction assets are secured from the unpredictable outcomes of severe weather conditions.
Transporting Equipment and Materials is Riskier Than Ever
Transporting construction equipment and materials has become riskier due to factors like congested roads and labor shortages, leading to a higher likelihood of accidents and delays. Inland marine policies offer coverage for property while in transit, safeguarding against potential losses during transportation. To learn more about this and common misconceptions with inland marine insurance, check out our other blog.
Short-Term or Mobile Storage Needs Coverage
Construction materials and equipment are frequently stored at job sites or transported between locations, making them especially vulnerable to theft, damage or loss. Inland Marine insurance offers protection for these assets – whether they are in transit or being temporarily stored – helping ensure uninterrupted coverage wherever necessary.
How Construction Companies Can Maximize Their Coverage
To optimize inland marine coverage, construction companies should:
- Conduct Regular Risk Assessments: Identify potential coverage gaps and ensure that all assets are adequately protected.
- Collaborate with Insurance Brokers: Work with experienced brokers to establish appropriate policy limits and secure necessary endorsements.
- Implement Robust Security Measures: Enhance on-site security to reduce the risk of theft and vandalism, which can also contribute to lower insurance premiums.
Inland marine insurance has evolved into a crucial component of a comprehensive risk management strategy for construction companies. By addressing the unique challenges of the industry, it offers essential protection for assets that are constantly on the move or temporarily stationed, ensuring resilience in an increasingly unpredictable environment. For more information on our inland marine coverage, contact Falvey today.
