Theft, disappearance, and proof
Inland marine insurance is designed to cover property that moves, travels, or exists away from a fixed location. Tools, equipment, mobile property, fine arts, and specialized assets often fall under these policies. When a covered item is clearly damaged or visibly stolen, claims are usually straightforward.
Friction arises when an item simply goes missing—no broken locks, no witnesses, no police report that confirms theft. This article explains how inland marine policies treat theft versus unexplained disappearance, what insurers look for when evidence is thin, and how to structure coverage and documentation to reduce claim disputes.
The difference between theft and disappearance
In inland marine policies, the cause of loss matters. “Theft” and “mysterious disappearance” are not always treated the same.
- Theft: generally requires evidence of an unlawful taking—forced entry, witness statements, police reports, or recovery efforts.
- Disappearance: refers to property that cannot be located, with no clear indication of how or when it was lost.
- Burden of proof: the insured must show that a covered cause of loss likely occurred.
The question is not “Is the item gone?”—it’s “Can we establish how it was lost?”
Why disappearance claims receive extra scrutiny
Insurers treat unexplained losses cautiously because disappearance overlaps with excluded risks.
- Potential non-covered causes: Misplacement, inventory error, employee negligence, or accounting mistakes may not be covered.
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Moral hazard:
Without evidence, insurers cannot distinguish between theft and internal loss or error.
This does not imply bad faith—only that proof standards still apply.
- Policy wording controls: Some forms exclude mysterious disappearance unless specifically endorsed back.
Disappearance is harder to insure than theft because the cause is ambiguous.
When “missing” is not a covered loss
Many claim denials trace back to assumptions about what inland marine automatically covers.
- No signs of forced entry: An unlocked jobsite or open yard can make theft difficult to establish.
- No reporting trail: Delayed or missing police reports weaken the theft narrative.
- Inventory inconsistencies: If records cannot show the item existed and was in use, insurers may treat the loss as clerical.
- Excluded causes: Voluntary parting, unexplained loss, or employee dishonesty may require separate coverage forms.
“We can’t find it” is not the same as “It was stolen” in policy terms.
How to strengthen a disappearance claim
Even when evidence is limited, preparation can materially improve outcomes.
- Immediate reporting: notify police and the insurer as soon as the loss is discovered.
- Last-known custody: document who last used the item, where, and when.
- Site conditions: note fencing, locks, lighting, cameras, or access controls in place.
- Recovery efforts: show reasonable attempts to locate the item before filing the claim.
Claims adjusters build timelines. The more complete the timeline, the less room there is for dispute.
Evidence doesn’t have to be perfect—but it does have to be coherent.
Endorsements and structures that matter
Coverage design before the loss determines how much proof is required after it.
- Mysterious disappearance endorsement: explicitly brings disappearance back into coverage.
- Employee dishonesty: covers theft by employees, which inland marine often excludes.
- Scheduled equipment: itemized listings with values reduce disputes over existence and value.
- Broader theft definitions: some forms define theft more expansively than others.
If proof is likely to be thin, coverage must be thicker.
Records that reduce claim disputes
Documentation is often the deciding factor in disappearance claims.
- Photos and serial numbers: prove ownership and condition before the loss.
- Check-in / check-out logs: show custody changes for mobile equipment.
- GPS or telematics data: can establish last known location or movement.
- Maintenance records: support value and active use.
Documentation doesn’t prevent losses—it prevents arguments.
What insurers are really evaluating
Adjusters are not only assessing loss—they are assessing plausibility.
- Does the timeline make sense?
- Is the item’s use consistent with the business?
- Are records internally consistent?
- Is the cause of loss more likely covered than excluded?
Claims succeed when the story of the loss is more credible than the alternatives.
Common questions
Is mysterious disappearance always excluded?
No. Some policies include it; others require an endorsement. The exact wording controls.
Do I need a police report?
It’s not always mandatory, but it significantly strengthens a theft claim and is often expected.
What if the item might have been misplaced?
Misplacement is generally not covered. Coverage depends on establishing a covered cause of loss.
Missing items require more than absence
Inland marine insurance responds best to losses with a clear cause. When property disappears without evidence, proof becomes the friction point. Strong documentation, prompt reporting, and the right endorsements turn uncertainty into insurability—and prevent small gaps from becoming denied claims.