Inland marine insurance may be firmly in a buyer-friendly cycle, but rapidly rising equipment values and growing concentrations of property are making coverage decisions more complex, according to an Amwins underwriting expert.
Jason Baynard (pictured), senior vice president at Amwins Program Underwriters, said an influx of carrier appetite has expanded available capacity while pushing down pricing. The first-party nature of inland marine risks has also helped draw insurers into the sector.
“With first-party coverage, you know exactly what the loss is when that piece of equipment catches fire,” Baynard said. “There’s a lot of appetite for that, which I think has contributed to some of the softening in the space.”
The current conditions are giving insureds an opportunity to negotiate broader protection rather than concentrating solely on premium reductions.
“Insurance is ‘on sale’ in the inland marine and property spaces right now, especially when it comes to real property,” Baynard said. “I think there’s a real opportunity to push for limits.”
That opportunity is becoming particularly important as the US data center construction boom drives substantial concentrations of high-value equipment into warehouses and temporary storage facilities.
Contractors supporting data center projects may be required to store machinery or components before lifting and installing them at a development. That can create a need for warehouse legal liability and property-of-others coverage at levels rarely encountered on traditional projects.
“You now have an increased aggregation of values,” Baynard said. “That could mean temporary storage limits of $30 million, $40 million or $50 million.”
The softening market is allowing some insureds to transfer a greater share of those exposures to carriers, but Baynard warned that headline limits should not replace a detailed examination of how values have been calculated.
Baynard described the challenge as becoming “numbers numb,” with insurance professionals increasingly confronted by figures that can be difficult to place in context. He pointed to discussions about data centers valued at tens of billions of dollars and carriers collectively deploying multibillion-dollar insurance lines. Individual pieces of data center equipment may also carry valuations of $10 million despite occupying little more space than an office desk.
“All these numbers are becoming astronomical,” Baynard said. “We hear about all these astronomical numbers, and I don’t think most people can really rationalize where they’re coming from or what they look like.”
The risk is that a conversation focused only on obtaining a large limit may overlook where equipment is stored, how frequently values move between locations and whether policy terms reflect the insured’s contractual obligations.
At the same time, heavy equipment valuations are being affected by tariffs and supply constraints. Baynard said retail agents should understand where insureds purchase their machinery and whether replacement equipment would need to be imported.
While some cranes are manufactured domestically, insureds may also rely on German and Asian suppliers. Crane utilization is already high, meaning an identical replacement may not be immediately available following a loss.
Tariffs can then create an additional financial burden beyond the scheduled value of the damaged equipment.
“These are real dollars,” Baynard said. “We have witnessed an insured buy an $8 million crane and then have to pay an additional $1.4 million in tariffs to bring it over. This client happened to have the money, but that’s rare. Not everybody is financially healthy enough to do that.”
Valuation discussions therefore need to account for more than the original purchase price. Replacement availability, import costs, delivery timelines and changing market values may all influence how much an insured would need to recover after a loss.
One notable trend in the soft market is the increasing availability of loss-of-use coverage. The combination of equipment storages and longer replacement periods is driving demand, and Baynard said more carriers are offering first-party protection that provides a monthly payment, subject to an aggregate limit, when a key piece of equipment is out of service.
The coverage generally requires forensic accounting to demonstrate the income lost during the interruption. Insurers may also expect a company to redeploy similar equipment from elsewhere in its fleet before claiming the benefit.
“Everybody is trying to differentiate themselves,” Baynard said. “I Selectively I’ve been offering that coverage in certain situations for more than 10 years, but I’m now starting to see many other people mimic that approach, as well as other approaches specific to the heavy equipment space.”
Such coverage can help support revenue while an insured waits for a replacement crane to arrive or damaged machinery to return to service, complementing the indemnity payment for the physical loss itself.
Coverage enhancements alone are not enough. Inland marine accounts can involve highly technical machinery, complex contractual obligations and specialized claims, making expertise across the insurance chain essential and preventing gaps and missed coverage.
Underwriters need visibility into the contracts insureds are signing and the responsibilities they are accepting. Claims teams and field adjusters should also understand the specific equipment and industry involved, allowing losses to be resolved based on the realities of the operation.
Amwins Program Underwriters combines specialized underwriting knowledge with a detailed understanding of niche industries and complex risk exposures. Its program teams work with retail agents, insureds and carrier partners to develop coverage solutions supported by sector-specific underwriting, loss-control and claims expertise.
Baynard said stronger submissions go beyond completing forms and provide a clear account of the insured’s culture, controls and approach to risk. “Tell me the story,” he said. “Anything a retail agent can do to demonstrate the insured’s actual risk characteristics is very valuable when you’re sitting in the underwriting seat.”
The most effective placements often involve direct collaboration among the insured, agent and underwriter, allowing each party to discuss deductibles, limits and risk tolerance.
“That collaborative approach is really where value is added,” Baynard said.
This article was produced in partnership with Amwins Group.
