Insurance & Employee Benefits
Which types of coverage are important to consider?
Boat Keepers Liability
Hired & Non-
On Hook Liability
Longshoreman’s and Jones Act
Piers, Wharves, and Docks
Important Considerations in Choosing an Agent to Service Your Organization’s Insurance
Knowledge of the Industry
Fast Certificate Processing
Billing & Finance Options
Access to Multiple Markets
Terminal Operator’s Legal Liability–When storing cargo, a terminal operator has a responsibility to protect against its damage while in their care, custody or control.
Wharfinger’s Legal Liability–A wharfinger has a liability exposure for damage to vessels and their cargo while in their care, custody, or control.
Pollution–State and federal agencies, such as the DEC or EPA have strict regulations regarding the storage and disposal of pollutants. In fact, very high penalties are often imposed on those responsible for fuel leaking in the waterways. Hence, the need to examine this exposure can be vital for the survival of the marina, especially if fuel storage or handling is involved.
Liquor Liability–If liquor is served, whether as a host or by sales, the liability exposure of a patron or guest becoming intoxicated and causing harm to another is prevalent.
Workers’ Compensation, Longshoreman’s Insurance, Marine Employers’ Liability, and the Jones Act–If an employee is working on or about the navigable water ways of the United States, the boat yard is responsible for providing insurance to cover in the event of an accident, illness, or death. This type of liability usually provides an exclusive remedy to pay for the injuries and provides compensation protection if the injury causes a loss of income. Employer’s liability is often provided to cover the loss of those dependent on the worker in the event of accident or illness. It may also extend to injuries spread to others not working, such as family members contracting a work related disease. Read more >>
Commercial Auto & Truck–Many boat yards transport boats and yachts on public roadways. It is not uncommon for claims to occur in the transportation of boat as many roads have height and weight restrictions that are not followed. Downed power lines caused by radar arches snagging the wire can be an issue if the driver is not cognizant of low lying lines. Another hazard to others is having the boat break loose from the trailer. Damage can be ensued to the boat itself and other motorists. Therefore it is important to ensure hauling and, loading & unloading is not excluded.
Umbrella or Excess Insurance–With so much liability exposure at stake, such as the aggregate value of all the boats stored, the number of guests and patrons served, and all the activities on or about the marina, it may be worth considering purchasing an umbrella or excess liability policy which provides another layer of liability protection to underlying limits.
Watercraft or Dealers Inventory
Many boat yards and marinas sell or broker boats, yachts, and other types of watercraft. It is important to provide protection in the event of a loss to the stock and inventory of boats while being held for sale. When examining this exposure, it is paramount to add the total value of inventory on hand on an aggregate basis. In the event of a total loss, such as resulting from a fire or hurricane, damage can be sustained for enormous amounts. It is also common for theft of materials and electronics on multiple vessels. Therefore it is important to evaluate how a claim is subject to each deductible. Would the deductible apply to each boat damaged or would one deductible apply to the entire claim? Hence, each policy can be worded different.
In addition to how the carrier responds to a vessel loss, the recoverable method should be evaluated. Would the recovery be based on an actual cash value or on a replacement cost basis. Should the watercraft be scheduled on the policy on a stated or agreed valuation? These methods are important to examine as any recoverable amount due to a loss can affect the settlement considerably.
Buildings and Appurtenant Structures
When insuring buildings, sheds, awning, and other structures, it is generally recommended to list all such structures on the property. Some carriers provide coverage on a blanket basis. This allows for an aggregate amount applied to all structures located on the premises or on various premises owned or operated by the marina or boat yard. Read more >>
Business Personal Property or Contents
The contents coverage should be listed per building unless provided on a blanket basis. Contents may included all stock, inventory, machinery & equipments, items held for sale, furniture, fixtures, and property of others. Most often, it is recommended that heavy machinery and equipment be scheduled. This is typical in insuring lifts, cranes, hoists, davits, and trailers or motorized vehicles in the yard.
Piers, Wharves, and Docks
The piers, wharves, and docks are often excluded from standard property forms and generally has to be purchase back by endorsement or on a separate policy. It is important to examine which perils are covered as flood, windstorm, and other related weather related damage may be excluded or limited. Erosion, wear and tears, and damage by boats may also be limited or excluded.
Flood insurance can be provide through FEMA. The limits are often capped, therefore it may be important to consider alternatives when protecting property subject to flooding. Read more>>
Inland and Ocean Marine
When transporting materials and cargo to and from the marina, motor truck cargo, or ocean cargo coverage is important to consider. These forms generally provide insurance for damage to contents being transported either by land or sea. It is essential to consider these forms of coverage if boats or other goods are being transported or hauled. Inland marine motor truck cargo provide coverage for damage while goods are being transported on the roads, while ocean marine cargo provides coverage while on the navigable waters. Both types of forms may extend or limit coverage within or beyond their assumed areas so it is crucial to examine the wording of terms, conditions, limitations, and exclusions.
Loss of Business Income & Extra Expense
Loss of business income provides coverage to pay for an interruption of business operations due to a covered direct physical damage. Failure of utility supply is often excluded and is important to consider if interruption of power is common, especially in storm areas. If provided, recovery is based on the continuing operating expenses and the net profit before taxes subject to the policy limits, terms, and conditions. Extra expense provides to pay for reasonable expenses associated with mitigation of loss of income or to expedite the operations of the business. Read more >>
Ancillary Property Coverage
Other property concerns may include; awning, fences, antennas, plants, trees, & shrubs, monies & securities, valuable papers, electronic data processing equipment and media, signs, etc. Generally, many of these items are limited or excluded but can be added back by endorsement.
By William F. Schaake, CIC, CRM
A full service marina is engaged in many aspects of boating, yacht sales, storage, mooring, docking, and storage. Many marinas offer amenities to their guest boaters including; fuel, bait & tackles sales, serving food and liquor, brokering boats & personal watercraft, boat & PWC rentals, tennis & bathing, and providing entertainment and lodging. Where evaluating the needs of a boat yard, it is important to itemize these activities relating to the operations as the liability exposures vary from one marina to another.
General liability covers the third party damages to property damage and bodily injury in five major categories:
Shiprepairer’s Legal Liability–A ship-
Charterer’s Legal Liability–A charterer may have a liability exposure to the vessel owner and others.
Stevedore’s Legal Liability–When loading and discharging of a vessel, there is a liability obligations of a stevedore for damage to vessels and their cargo while in the care, custody and control.
Vessel Builder’s Risk–While a vessel is being worked on, insurance may need to be provided to cover the the materials going into the vessel until it is completed and delivered to the owner.