Michigan Boat Dealers Insurance Policy Information
Michigan Boat Dealers Insurance. Boating is a beloved pastime of many. It's also a vital industry that plays a key role in the economy. Whether you sell leisure boats, such sailboats, speed boats, pontoon boats, or yachts, or you supply the vessels for business, such as ferries, water taxis, and fishing boats, you provide an invaluable service for your clients.
You're also exposed to a lot of risks. Some of those risks are similar to the risks that business owners in all industries face, while some are unique to boat dealers.
Boat dealers sell all types and sizes of watercraft, including jet skis, canoes, rowboats, inboard/outboard motorboats, sailboats, houseboats and yachts. Boat accessories and parts are usually sold, as well as other recreational items such as fishing gear, water skiing gear, and surfing equipment.
Boat dealers typically offer maintenance and repair services, either by performing the work themselves or by subcontracting to a specialty shop. Inventory and labor may fluctuate depending on the season.
The dealer may sell used watercraft from trade-ins, operate a marina or provide off-season boat storage. While a selection of boats may be displayed in a showroom, many are stored in open lots outside the building.
In order to protect yourself from the unexpected, having the right type of Michigan boat dealers insurance coverage is an absolute must.
What kind of insurance do you need? How much should you carry? Read on to find the answers to these questions and more.
Michigan boat dealers insurance protects your dealership from lawsuits with rates as low as $59/mo. Get a fast quote and your certificate of insurance now.
Why Do Boat Dealers Need Insurance?
As mentioned, MI boat dealers are exposed to a variety of risks. While you do your best to make sure that everything with your business runs smoothly, there's always a chance that something could go wrong.
An employee could get injured on the job. A vendor could slip and fall while making a delivery to your dealership. A client could file a lawsuit against you, citing that the equipment you supplied was defective. Your inventory could be vandalized or your dealership could be damaged in a storm.
As the owner and operator of your boat dealership, you are liable for anything that does go wrong. That means that you are also responsible for paying any related expenses, and those expenses can be expensive.
Lawsuits, medical bills, repairs, and more; the cost of all of these things can be exorbitant. With the right type of Michigan boat dealers insurance coverage, if something does go wrong, instead of paying the expenses out of your own pocket, your carrier will cover them for you.
In other words, having the correct commercial insurance can protect you from serious financial losses. Plus, being properly insured ensures that your MI operation is legal, as some types of coverage are required by law.
What Type Of Insurance Do Boat Dealers Need?
There are several forms of Michigan boat dealers insurance coverage that boat dealerships should carry; however, the specific type of coverage you'll need does vary.
There are numerous factors that will affect the coverage you need, such as where your MI operation is located, the type of inventory you carry, and even the clients you serve. Because insurance needs vary, it's important to speak with an insurance agent who has experience covering boat dealers.
To give you a basic idea of the type of coverage you may need, however, here's a look at some of the policies that you will likely need to invest in:
- Commercial General Liability: This type of insurance offers broad coverage for third-party bodily injury and property damage claims. For instance, if a vendor were to sustain an injury at your place of business and file a lawsuit against you, this policy would cover any expenses that would be related to such an incident, such as legal fees and any damages that a court may find you liable for.
- Commercial Property: This coverage protects the physical structure of your business, some of the structures that surround it, and the contents within it from acts of nature, vandalism, and theft. For example, if a fire were to break out at your dealership, this coverage would help to pay for any necessary repairs, or to replace things that may not be reparable.
- Business Income: In the event that you need to close your boat dealership down, business income insurance would help to cover any income that you might lose during the shutdown. For instance, if a fire were to break out and you needed to be closed until your facility was repaired, business income insurance would replace any income that you may lose during that period of time.
- Workers' Compensation: You'll also need to carry a workers' compensation policy to protect your employees. In the event that a staff member suffers an injury at work, this policy would cover their medical expenses, as well as replace any wages that they may lose if they are unable to work as a result of that injury.
The above-mentioned policies are just a few examples of the type of Michigan boat dealers insurance coverage you should consider for your dealership.
MI Boat Dealership's Risks & Exposures
Premises liability exposure is high due to public access to the display areas, parking lots and repair areas. Floor coverings inside the showroom should be in good condition with no frayed or worn spots on carpet and no cracks or holes in flooring. Steps and uneven floor surfaces should be prominently marked. Sufficient exits must be provided and be well marked, with backup lighting systems in case of power failure.
Waiting areas should be provided for customers whose vessels are being repaired. Customers should not be permitted access to the service area. The moving, rearranging and hooking up of owned and non-owned watercraft pose a collision hazard to persons or to property of others. Parking lots and sidewalks need to be in good repair with snow and ice removed, and generally level and free of exposure to slips and falls.
If the premises are open after dark, adequate lighting and appropriate security for the area must be present. Watercraft stored outside can pose an attractive nuisance to children and teens, especially in the off season. Chains and fences should be in place to prevent entrance to the dealership after hours.
Repair operations are the major products/completed operations exposures. There should be a check-off procedure in place prior to release of the watercraft to the customer to prevent its return with any vital functions not working properly.
General liability policies exclude most watercraft exposures. If boats can be taken onto the water for test drives by customers, a watercraft or ocean marine protection and indemnity coverage is needed.
Environmental impairment exposures can be significant due to the storage of gasoline and other flammable liquids in tanks and the disposal of used oils, solvents and other hazardous wastes from repair operations.
All above-ground and underground tanks and pipes are subject to michigan or federal regulations and should be routinely tested for leakage. Adequate procedures should be in place and must be followed to prevent any leakage or contamination. Contracts should be in place to dispose of all environmentally dangerous chemicals.
Workers compensation exposure is most significant in the repair operation and during transport. Back injuries, hernias, strains and sprains can result from lifting. Repair may involve painting, welding, or work with fiberglass hulls. Safety equipment should be provided.
Casual and seasonal labor can impact the ability to control hazards. Turnover may be high. If large boats are sold there may be work at heights. Refueling should be done only in well-ventilated areas to minimize inhaling of fumes. Information regarding chemicals should be available to employees along with early warning signs of problems. There may be Longshore and Harborworkers Compensation Act exposure if work is done on or near the water.
Property exposure comes from the flammable paints, lubricants, oils, degreasers, and solvents used in service and repair operations and the combustibility of watercraft. Flammables must be properly labeled, stored and separated. If done on premises, spray painting should be in spray booths with good ventilation, UL-approved wiring and fixtures and adequate controls.
Welding is often a part of the repair and body work operation that needs to be evaluated for proper handling of the tanks and gases and adequate separation from other operations with either a separate room or flash/welding curtains. Good housekeeping is critical. Greasy, oily rags must be kept in covered metal containers. Work areas must be cleaned regularly and trash removed from the building.
Lubricants and fuels should be drained from any watercraft stored during the off-season to reduce the potential for a fire. Wind, wind-driven water and hurricane damage pose catastrophe potential, especially if the operation is close to the water.
Theft is a concern as watercraft can be target items. Appropriate security controls must be taken including physical barriers such as chains, fences, or gates, lighting to deter access to the premises after hours, and an alarm system that reports directly to a central station or the police department.
Crime exposure comes from employee dishonesty, theft of money and securities, burglary and robbery. Employee dishonesty is controlled through background checks, inventory monitoring, control of the cash register, and division of duties. Physical audits should be conducted at least annually. Storage and handling of keys presents an often overlooked exposure to theft.
Inland marine exposure comes from accounts receivable if the dealer offers credit; bailees customers if the dealer offers service, repair, or storage; computers used to monitor inventory; floor plan coverage for watercraft furnished by manufacturers and held for sale; goods in transit if the dealer delivers watercraft to customers; and valuable papers and records for manufacturers' and customers' records.
Boats stored in the open are particularly susceptible to damage by hail, wind, flood, vandalism and theft. Areas should be well lighted with chains, fences or gates to prevent access and transport. The more expensive models should be moved inside to the showroom.
An alarm system that reports directly to a central station or the police department should be used. Security guards may be appropriate in some areas. Property on consignment or off premises at shows and exhibitions may require special controls and coverages.
Commercial auto exposure may be limited to hired and non-owned for employees running errands to pick up parts for repair operations. All employee drivers should have appropriate licenses with their MVRs regularly checked. All vehicles must be regularly maintained with records retained. There should be written procedures for personal and permissive use of vehicles furnished to employees.
If the dealership offers pickup and delivery of watercraft to its customers, the exposure increases. Transportation hazards include failure to secure the load properly and equipment failure, especially tie-downs and hitches. Drivers must be trained to transport oversized loads that can shift on the road. Random drug and alcohol testing should be conducted.
Boat Dealers Insurance - The Bottom Line
To find out more about the specific types of Michigan boat dealers insurance policies you'll need, how much coverage your dealership needs - speak with an experienced insurance broker.
Michigan Economic Data And Business Insurance Requirements
Business owners who are interested in establishing operations Michigan must have a thorough understanding of the state's economy. They should also familiarize themselves with any regulations and limits that state may have in place for commercial insurance.
Any entrepreneur who is thinking about starting a business in the Great Lake State first needs to determine if it's a feasible location for business operations. As such, it's important to have a keen understanding of pertinent details regarding the economy of Michigan, in addition to the types of insurance coverage that are mandatory for corporations that operate within the state.
Economic Trends for Businesses In Michigan
After a long period of stagnant job growth in the early part of the 21st century, MI has been experiencing a steady increase in employment gains. Between 2009 and 2018, the state has enjoyed a period of uninterrupted job growth; the longest stretch of job growth since World War II. According to economists at the University of Michigan. While there has been a slight decline in the rate of job growth, job creation continues and forecasters say will continue for the next two years, into 2021.
In 2018, an estimated 55,200 jobs were created; in 2019, it's expected that 35,800 jobs will be created, and in 2020, economists believe that there will be a total of 39,300 jobs created in Michigan. While that rate of growth is 1.9 percent slower than the job growth rate between 2011 and 2016, it is still a steady increase overall. In total, approximate 683,200 jobs will be created in MI between 2099 and 2020; almost four out of the five jobs that were lost during the early part of the 21st century will be recovered.
While the unemployment rate has steadily improved, it is still above the national average. In March of 2019, the national unemployment rate was 3.8 percent, while in the state of Michigan, it was 4.0 percent. Mid-Michigan has experienced the largest growth rate in the state, and according to forecasters, it looks like that trend will continue, moving forward. Industries that are expected to see the most growth include:
- Energy, due largely to research and development in clean energy
- Food and agriculture
- Transportation and mobility
- Healthcare industry
- Information and technology
In the state of MI, business owners are not legally required to carry liability insurance; but most entrepreneurs opt to invest in a General Liability or Business Owner's Policy (BOP). A commercial auto insurance policy is also required for any businesses that use motor vehicles to conduct any aspect of their business operations. Workers' compensation insurance is also required for any businesses with non-owner employees. While the following forms of coverage are not required, depending on the type of business you operate, they are recommended:
- Data breach insurance
- Business income insurance
- Commercial Umbrella insurance
Additional Resources For Marine, Boat And Watercraft Insurance
Learn about marine, boat and watercraft insurance - a specialized form insurance that provides coverage for hull losses, cargo losses as well as liability for passenger injuries, environmental damage, and third-party damage caused by watercraft accidents.
- Insurance Nautical Terms Glossary
- Boat Dealers
- Boat Repair & Dry Docks
- Dock & Pier Contractors
- Dredging Contractors
- Ocean Marine
- Ship Chandlers
- Boat & Watercraft Insurance
Marine insurance covers everything from loss of cargo to damage to the vessel, terminals, etc. Cargo ships are provided protection against potential losses, especially in transit, which is ideally suited to shipping companies and couriers who want to ensure that they are protected while transporting goods.
Businesses in the shipping industry and those who own private yachts/boats understand that it is nearly impossible to control natural occurrences despite the current safety regulations and laws. Factors like encounters with pirates, weather hazards, conflicts are all too common and can result in damages that cause ship owners to incur lots of damages.
A marine insurance policy can ensure that ship, boat, and yacht owners' interests are protected, offering financial coverage to ensure that they are protected against potential losses.
The other excellent feature of current marine insurance policies is that they can be customized to specific trades, which means that they can cater to varying coverage requirements. The policies can offer coverage based on the size of the ship and the routes being taken.
Types Of Marine Insurance
As mentioned earlier, marine insurance is a broad term that applies to a large group of coverages and is meant to offer protection against damages and losses. Generally, you'll run into three common marine insurance types that provide varying protections.
Hull Insurance - When your ship, boat, or yacht has hull insurance, it is protected from all physical damages along with machinery and equipment. The policy covers all water vessels but is limited to primary commercial ocean vessels. That's why this isn't the best policy for vessels like floating equipment, tugboats, barges and oil rights, or any other type of vessel which does not have commercial intent, so to speak.
Cargo Insurance - Again, this marine insurance coverage is for physical damage to the cargo a commercial vessel may be carrying. However, the coverage and the conditions may vary; for instance, there are policies that offer theft protection, and then there are others that cover other forms of losses apart from physical damage.
Marine Liability Insurance - Now this policy is often referred to as P&I or also protection and indemnity. The coverage offers protection from third-party liabilities that owners and businesses may be exposed to during operations. It also includes coverage for illnesses and injuries while also covering loss of life when the vessel is operational. If there are medical expenditures, damage to the vessels, collision incidents, then; as a result, the quarantine is also covered.
Finally, the premium for marine insurance is mainly based on a couple of factors like the type of vessel, age of the vessel, trading and tonnage, management and ownership, and valuation of the ship, amongst various other factors.
Minimum recommended small business insurance coverage: Building, Business Personal Property, Business Income and Extra Expense, Employee Dishonesty, Money and Securities, Accounts Receivable, Bailees Customers, Computers, Contractors' Equipment, Mobile Equipment, Valuable Papers and Records, Ocean Marine – Hull, Ocean Marine – Protection and Indemnity, General Liability, Employee Benefits Liability, Environmental Impairment, Umbrella, Hired and Non-Owned Auto & Workers Compensation.
Other commercial insurance policies to consider: Earthquake, Flood, Burglary, Computer Fraud, Forgery, Robbery, Goods in Transit, Signs, Ocean Marine - Hull, Cyber Liability, Employment-related Practices, Liquor Liability, Ocean Marine - Protection and Indemnity, Business Automobile Liability and Physical Damage, Longshore and Harborworkers Compensation Act and Stop Gap Liability.
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