Commercial Boat Insurance
Commercial boat insurance is an extraordinarily complex insurance market. Far too few operators look for the best deal on insurance. Because their needs are so specific, they often wind up with a blanket policy that goes beyond what they need, with a price tag to match. in other cases, because the market is so niche, it can be difficult to find a policy that covers all your bases.
While different from other insurance policies, there are certain universal questions that are relevant. The most significant of these questions is: “does this policy cover replacement or a fixed value?” This market can be subdivided in to four major segments, although there is plenty of variation within each segment.
This market is divided into many additional sub-categories. These include: oil and liquid chemicals, compressed or liquid gasses, containers, raw and processed materials, and many others. Each sub-category adds a layer of complexity to their insurance. A cargo of compressed gas is more volatile than a cargo of canned food, and the insurance for those shipments will reflect that difference. Additional factors that will impact the commercial shipping insurance market include (but are not limited to):
- Range: How far are you shipping your goods?
- Area of Operation: Shipping off the coast of East Africa is more dangerous (and therefore more expensive) than Off the East coast of the U.S.
- Ownership of Goods: Are you shipping your own goods or are you just transporting them for someone else?
- Nature of Shipping Agreements: Kind of a miscellaneous section. Every nation requires shipping companies to abide by certain laws, and they are not all the same. In addition, your agreements with your port of departure and your port of arrival will impact your insurance.
- Specific Ports Used: Some ports are more expensive than others. Heavy shipping lanes and busy ports can delay delivery. Many ports don’t have the infrastructure to handle the largest container ships, so goods need to be transferred offshore. All of these factors (and many others) add layers of risk that insurance companies attempt to quantify and pass the bill on to you..
Many larger fishing vessels and fleets get insurance through corporate headquarters. However, smaller vessels that historically relied on local agents may not have access to the best rates or coverage options for their needs.
Ferries and other transport for people
These companies take on significant potential liability. Liability insurance is absolutely vital. No actor, however small, should ignore this risk. So who belongs in this category?
- Cruise Ships probably haul the highest raw number of passengers per year.
- Charter Boats are a growing business in many seaside towns and certainly entertain tens of thousands of passengers annually.
- Ferries, from small chain-run ferries across rivers, to the massive car ferries that cross Lake Michigan. They have predictable routes and won’t generally travel in bad weather. Nevertheless, they, too, carry thousands of passengers a year and absolutely need liability insurance, no matter how short the route.
- Any commercial activity where the principle activity focuses on guests aboard. These include (but again, aren’t limited to)
- Water Taxis
- Dinner Cruises
- Duck tours
- River Boats
- Canoe, Kayak, PWC, or Pontoon boat rental
Waterfront Docks or Piers
Companies that provide waterfront services should ensure that they have comprehensive insurance policies. Such services include:
The greatest danger in dredging is underwater infrastructure. Power lines, old bridge pilings, and even pipelines are not always clearly marked. These pose obvious insurance hazards.
Dredging companies should unquestionably possess liability insurance, both for operators and bystanders. They should also protect themselves with property damage liability insurance.
Tow companies take on a great deal of responsibility when they hook on to another boat. The weather is often foul when boats need a tow. Oftentimes, tow-boat operators are dealing with scared passengers, and a wide array of boats.
Towing a 27-foot sailboat is not the same as towing a 40-foot motor yacht. Tow-companies and their operators therefore need excellent insurance, in case one factor or another causes property damage or injury.
Building in or near the water is an inherently risky endeavor. Water is one of the most powerful destructive forces in the world, and salt water doubly so. Insurance is vital in protecting construction companies, trying to build solid, immovable structures in constantly shifting ground, under an element that will never stop wearing it away.
Waterfront restaurants must deal with all the complexities of owning a restaurant, along with the dangers of entertaining large groups near water. If alcohol is available, you need to ensure that no one will accidentally stumble off the pier. Restaurants always need insurance, but the added risks of drunk boaters, fall-hazards, and infrastructure degradation (which happens much faster under water) provide make excellent insurance vital for waterfront restaurants.
They say water and oil don’t mix, and that adage certainly rings true for many gas-dock operators. Fire is always a hazard at the gas dock, and both boaters and operators need to be aware of the risks. All electrical systems need to be up-to-date, grounded, and have an accessible kill switch to shut off the pumps in an emergency. Employees and patrons must not smoke while on the gas dock, and operators need to take steps to avoid static-electricity build-ups.
In addition, even in protected bays, gas dock staff should monitor weather reports and have emergency systems in place if a storm comes. The last thing you want is a ruptured fuel line. Clean-ups after such events are expensive, and are likely to fall to the dock operator.
All of these risks indicate a need for broad insurance. Gas docks should have insurance in case of personal injury, property damage, and fuel spills. Even a minor event could be catastrophically expensive without insurance.
Few launch ramps have year-round staff, watching as boaters launch and extract their boats. This means that there are rarely employees available to, say, ensure that boaters have inserted all their plugs. Or that they know how to back a trailer into the water. Or that they avoid any underwater obstacles during launch.
At best, the nearest employee is usually 50 yards away, and may only learn that something has gone wrong after the fact. In certain circumstances, the owner of the launch ramp can be held liable, even for mistakes made by the customer. Whether city, county, or private, owners of launch ramps need to be aware of the risks, and insure themselves accordingly.
Waterfront casinos carry all the risks of waterfront restaurants, with perhaps a greater guarantee of customer intoxication. In addition, waterfront casinos often operate marinas, so they need to be particularly cautious of drunk boating, and inebriated customers on the docks. Having a staff-member on hand 24/7 is expensive, but is, perhaps cheaper than ensuing claims might be.
As always, insurance is absolutely critical. You want protection, both for personal injury, and for any property damage patrons might inflict. In today’s litigious society, claimants routinely sue commercial operators for the actions of their patrons. That is a risk that you do not want to take.
Other Maritime Organizations
Finally, while not commercial operators themselves, plenty of organizations own vessels that should unquestionably have insurance. These organizations can often get better rates when they combine multiple polices together. Additionally, existing corporate, organizational, or operational insurance may cover a portion of their liability. Organizations in this grouping include yacht clubs, boat rental locations, summer camps, high schools and colleges.
Commercial Insurance Companies
When it comes to Commercial boat insurance, We are particularly impressed with three firms. We should note that for larger container ships that the best bet is often with a much larger insurer;