subject: What To Consider When Purchasing Boat Dealers Insurance [print this page] Boat dealers have many concerns relating to the risks and exposures associated with this type of business. Liability issues when it comes to the public can generate heavy losses. Further, the area that creates the greatest loss possibility is when a customer gets hurt. This could occur around property, getting in and out of boats, walking on docks, taking demo rides or sea trials. This form of insurance can usually be obtained as a combination policy that provides:
Commercial Liability Insurance
Product Liability, and
Protection and Indemnity (an insurance term used to describe a specialized form of insurance for maritime exposures)
Because of the risks involved, which could result in severe injuries and even multiple deaths, very high limits of insurance are usually recommended. A Bumbershoot is the recommended type of coverage to satisfy the need for high limits. A traditional Umbrella or excess limits liability policy will not do as good of a job as the Bumbershoot as it specifically addresses maritime exposures.
If the company has employees, Workers Compensationinsurance will be required to cover obligations to protect employees if and when injured on the job. Jones Act coverage may also be needed, as there is a federal law that mandates coverage for the Master and Crew of a vessel. This exposure is best covered under the Protection and Indemnity policy.
Boat dealers property form
The Boat Dealers property form is very broad and covers property in transit at temporary locations and while on the water. The owned inventory of boats, motors and marine supplies is best insured in this way since values can fluctuate greatly. The insurance industry has developed a reporting form that allows reporting of values monthly, thereby only requiring paying a premium for exact values. A traditional property policy cannot do this.
If the Boat Dealership also operates a marina, they will needMarina Insurance.
Vessels, barges or other watercraft that are owned by the boat dealer but are not inventory, must be insured separately for liability as coverage is not automatically provided on any other policy.
Business Interruption insurancecan also be included to this policy. Coverage is available to cover the docks, bulkheads, piers and pilings from almost any cause of loss (except rot, wood boring insects and worms).
Boat dealers often own heavy equipment such as travel lifts, forklifts, backhoes, or cranes.
This equipment is very valuable and is best insured by anInland Marinepolicy.
Other types of policies that are available and should also be considered
An employee dishonesty policy
Commercial automobile insurance
A separate flood insurancepolicy for the building and contents. (The boat dealers form usually includes flood insurance for the boats, motors, hardware and trailers as part of the inventory)
Employment Practices Liability Insurance
Employee Benefits Liability Insurance (if benefit plans are offered to employees)
An independent insurance agent specializing in Marine coverage can go through each of these policies and more to see what exactly is needed.
by: William A. Riggs
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