Inland marine policies, although technically falling under the category of property insurance, have features of both first-party property coverage and third-party liability coverage. Inland marine policies are often purchased by companies to fill a gap in coverage that would otherwise exist between their property and liability coverages. Property policies issued to cover an insured’s building normally do not cover the insured’s movable property when located off the insured premises. Commercial general liability policies routinely contain exclusions barring coverage for the insured’s liability for property damage to property rented by the insured, and property in the care, custody, or control of the insured.
Thus, to fill these gaps in coverage, the insured can purchase inland marine insurance to cover, for example: (1) damage to the insured’s own property while in transit or located at a jobsite; (2) damage to equipment that the insured leases from others; or (3) damage to property belonging to the insured’s customers that is in the insured’s custody for repair, storage, or transport. Inland marine policies often provide that the insurer has the right, but not the duty, to defend the insured against liability claims made against the insured for damage to property of others covered under the policy. Inland marine policies are customized and tailored to fit an insured’s individual needs and may be manuscript policies rather than standard-form policies, thus presenting unique coverage issues.
Lugenbuhl has considerable experience in litigating property-damage claims made pursuant to inland marine policies. Lugenbuhl’s attorneys have the knowledge and experience necessary to handle the uncommon issues that can arise in the context of evaluating coverage under inland marine policies. Our experience in representing insurers in cases involving inland marine policies includes:
- Determining whether the property allegedly damaged qualifies as covered property under the policy
- Evaluating whether the property damage was caused by a covered cause of loss
- Assessing whether the party seeking recovery qualifies as a loss payee under the policy
- Analyzing whether the insurer has a duty to defend its insured against property-damage claims, and if not, gauging whether assuming the insured’s defense would nevertheless be advantageous under the circumstances
- Determining whether the property damage is barred from coverage by exclusion
- Litigating coverage with other insurers when the property damage is progressive or the date of damage is unknown and potentially falls within another insurer’s policy period