Short answer
Many interior designers buy furniture for clients, have a receiver store it, then deliver and install it. During that time the goods may be the designer’s responsibility. A business owners policy may cover property away from your office or in transit only up to a small amount, if at all. Inland marine insurance for interior designers is built for goods in transit and stored at someone else’s location. Terms depend on the carrier and the policy wording, so ask your agent before the next large order.
How designers buy, store and deliver furniture
The flow is usually simple. The designer buys furniture and fixtures for a client. A receiving warehouse accepts the goods and holds them until the project is ready. An installer then delivers and sets them up.
Each step moves the goods through a different party’s hands. That is where gaps tend to appear.
Where the risk sits at each step
Responsibility for the goods can change as they move. Your contract with the client and the receiver’s terms usually decide who bears the loss at each point.
Read both documents before an order ships. Some contracts leave the designer responsible until the client accepts delivery. Wording varies, so a firm should not assume the receiver or the client carries the risk.
Why a BOP may not reach goods off premises or in transit
A business owners policy typically focuses on property at your office. Many forms cover property away from your premises or in transit only up to a small limit. Some forms may exclude certain situations entirely.
A firm that stores a large order for weeks at a receiver may exceed those limits quickly. Check the off-premises and transit limits on your policy before assuming the goods are covered.
What inland marine insurance covers
Inland marine is a property coverage often built for goods that move or sit at other locations. It is sometimes called a transit or property floater.
Depending on the form, it can address goods in transit and goods stored at a location you do not own. Details to review include:
- How the policy values the goods
- Per-location limits for stored property
- Per-shipment transit limits
- Covered causes of loss and exclusions
Carriers differ on what they will write and how. Appetite for this exact purchase-store-deliver flow varies.
What the receiver’s insurance may cover
A receiver usually carries its own insurance. That can help, but it is often limited. Many warehouse receipts cap what the receiver pays per item or per shipment, and some exclude certain goods.
The receiver’s policy generally protects the receiver’s liability, not your full interest in the goods. Read the warehouse receipt terms and ask what the receiver’s coverage actually pays.
Professional liability is a separate question
Damage to the goods and a specification error are different problems. A wrong dimension or an unsuitable product choice is a design issue. A pallet damaged in storage is a property issue.
Professional liability generally addresses the first type of claim. Inland marine addresses the second. A firm that buys and stores furniture may need to review both.
Real-world example
An interior design firm buys furniture for a client. This is a hypothetical example for illustration. The goods ship to a receiver, which stores them for six weeks before an installer delivers them.
During storage, a water leak at the warehouse damages part of the order. The firm’s business owners policy has a small limit for property away from its premises. The receiver’s warehouse receipt caps payment per item at an amount well below replacement cost.
The firm may now face a gap between what the goods cost and what either policy pays. A review of the off-premises limit and the receiver’s terms before the order could have shown that gap early.
What to check
- Your contract with the client, including who bears risk while goods are stored
- The receiver’s warehouse receipt terms and any per-item cap
- The off-premises and transit limits on your current policy
- Your annual purchase volume
- Your largest single shipment
- Your longest storage period
- Who owns the goods at each step
Bring these numbers to your agent. Carriers price based on what they know.
Hardcover insight
Designers often treat procurement as an extension of design work. The insurance exposure is different, because the firm may be holding someone else’s money in the form of goods.
The questions underwriters ask tend to be practical. They want to know how much you buy, how long goods sit and who handles them. A short summary of your process helps a quote move faster. A risk management review can also help you document how orders are handled.
Related questions
Doesn’t the receiver’s insurance cover it?
Sometimes partly. Read the warehouse receipt terms, since many cap what the receiver pays and some exclude certain goods.
Who is responsible while the goods are stored?
It depends on your contract with the client and the receiver’s terms. Read both before an order ships.
Is inland marine the same as builders risk?
No. Builders risk covers a building under construction. Inland marine addresses goods that are in transit or stored elsewhere.
Does a business owners policy cover furniture in transit?
Often only up to a small limit, and sometimes not at all. Check the off-premises and transit sections of your policy.