Boat Dealers Insurance Policy Information
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 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.
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.
Below are some answers to commonly asked boat dealers insurance questions:
- What Is Boat Dealers Insurance?
- How Much Does Boat Dealers Cost?
- Why Do Boat Dealers Need Insurance?
- What Type Of Insurance Do Boat Dealers Need?
- What Does Boat Dealers Insurance Cover & Pay For?
What Is Boat Dealers Insurance?
Boat dealers insurance is a type of insurance coverage designed specifically for boat dealerships. This insurance provides financial protection to the dealership against losses and damages to boats in its possession, as well as liability coverage for potential accidents or injuries that may occur on the dealership's premises.
Some common coverage types under boat dealers insurance include property damage, theft, liability, and errors and omissions. This type of insurance helps boat dealerships to manage risks associated with their business operations and protects their financial stability.
How Much Does Accounting Insurance Cost?
The average price of a standard $1,000,000/$2,000,000 General Liability Insurance policy for small boat dealerships ranges from $59 to $87 per month based on location, services offered, revenue, claims history and more.
Why Do Boat Dealers Need Insurance?
As mentioned, 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 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 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 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 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 boat dealers insurance coverage you should consider for your dealership.
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 state 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.
What Does Boat Dealers Insurance Cover & Pay For?
Boat dealers can be sued for a variety of reasons, and insurance can provide protection in case of legal claims. Here are some examples:
Personal injury or property damage: Boat dealers may be held liable if someone is injured or their property is damaged while using a boat that was purchased from them. For example, if a boat malfunctions and causes injury to a passenger, the boat dealer may be sued for negligence. Insurance can help cover the costs of legal defense, settlements, or judgments awarded to the injured party.
Breach of contract: Boat dealers may be sued for breach of contract if they fail to fulfill their obligations as outlined in a sales contract. This could include issues such as failing to deliver a boat as promised or misrepresenting the condition of a boat. Insurance can provide coverage for legal costs associated with defending against breach of contract claims and potentially paying damages.
Product liability: Boat dealers can be held liable for defects in boats they sell, which can result in injuries or property damage. For example, if a boat has a manufacturing defect that causes it to malfunction and injure a user, the boat dealer may be sued for product liability. Insurance can offer protection by covering legal expenses, including defense costs, and any damages awarded to the injured party.
Wrongful repossession: Boat dealers may face lawsuits if they wrongfully repossess a boat from a buyer or fail to follow proper repossession procedures. This can result in claims for damages, including emotional distress or financial loss. Insurance can help cover the costs of legal defense, settlements, or judgments related to wrongful repossession claims.
Professional negligence: Boat dealers who provide services such as boat maintenance, repairs, or financing advice can be sued for professional negligence if they make mistakes or provide inadequate services that result in financial loss for their customers. Insurance can provide coverage for legal expenses and damages resulting from allegations of professional negligence.
In each of these examples, insurance can help protect boat dealers by covering the costs associated with legal defense, settlements, or judgments. It is important for boat dealers to obtain appropriate insurance coverage that specifically addresses their unique risks and exposures to ensure they are adequately protected in case of lawsuits.
Commercial Insurance And Business Industry Classification
- SIC CODE: 5551 Boat Dealers, 3732 Boat Building And Repairing, 3731 Ship Building And Repairing
- NAICS CODE: 441222 Boat Dealers, 441228 Motorcycle, ATV, and All Other Motor Vehicle Dealers
- Suggested Workers Compensation Code(s): 8748 Automobile - Salespersons, 6834 Boatbuilding or Repair & Drivers, 6824 Boat Building or Repair NOC & Drivers
Description for 5551: Boat Dealers
Division G: Retail Trade | Major Group 55: Automotive Dealers And Gasoline Service Stations | Industry Group 555: Boat Dealers
5551 Boat Dealers: Establishments primarily engaged in the retail sale of new and used motor boats and other watercraft, marine supplies, and outboard motors.
- Boat dealers-retail
- Marine supply dealers-retail
- Motorboat dealers-retail
- Outboard motor dealers-retail
Description for 3732: Boat Building And Repairing
Division D: Manufacturing | Major Group 37: Transportation Equipment | Industry Group 373: Ship And Boat Building And Repairing
3732 Boat Building And Repairing: Establishments primarily engaged in building and repairing boats. Establishments primarily engaged in manufacturing rubber and nonrigid plastics boats are classified in Major Group 30. Establishments primarily engaged in operating marinas and which perform incidental boat repair are classified in Transportation, Industry 4493; membership yacht clubs are classified in Services, Industry 7997; and those performing outboard motor repair are classified in Services, Industry 7699.
- Boat kits, not a model
- Boats, fiberglass: building and repairing
- Boats, rigid: plastics
- Boats: motorboats, sailboats, rowboats, and canoes-building and
- Canoes, building and repairing
- Dinghies, building and repairing
- Dories, building and repairing
- Fishing boats, small
- Houseboats, building and repairing
- Hydrofoil boats
- Kayaks, building and repairing
- Life boats, building and repairing
- Life rafts, except inflatable (rubber and plastics)
- Motorboats, inboard and outboard: building and repairing
- Pontoons, except aircraft and inflatable (rubber and plastics)
- Skiffs, building and repairing
Description for 3731: Ship Building And Repairing
Division D: Manufacturing | Major Group 37: Transportation Equipment | Industry Group 373: Ship And Boat Building And Repairing
3731 Ship Building And Repairing: Establishments primarily engaged in building and repairing ships, barges, and lighters, whether self-propelled or towed by other craft. This industry also includes the conversion and alteration of ships and the manufacture of off-shore oil and gas well drilling and production platforms (whether or not self-propelled). Establishments primarily engaged in fabricating structural assemblies or components for ships, or subcontractors engaged in ship painting, joinery, carpentry work, and electrical wiring installation, are classified in other industries.
- Barges, building and repairing
- Cargo vessels, building and repairing
- Combat ships, building and repairing
- Crew boats, building and repairing
- Dredges, building and repairing
- Drilling and production platforms, floating, oil and gas
- Drydocks, floating
- Ferryboats, building and repairing
- Fireboats, building and repairing
- Fishing vessels, large: seiners and trawlers-building and repairing
- Hydrofoil vessels
- Landing ships, building and repairing
- Lighters, marine: building and repairing
- Lighthouse tenders, building and repairing
- Marine rigging
- Naval ships, building and repairing
- Offshore supply boats, building and repairing
- Passenger-cargo vessels, building and repairing
- Patrol boats, building and repairing
- Radar towers, floating
- Sailing vessels, commercial: building and repairing
- Scows, building and repairing
- Seiners, building and repairing
- Shipbuilding and repairing
- Submarine tenders, building and repairing
- Tankers (ships), building and repairing
- Tenders (ships), building and repairing
- Towboats, building and repairing
- Transport vessels, passenger and troop: building and repairing
- Trawlers, building and repairing
- Tugboats, building and repairing
Boat Dealers Insurance - The Bottom Line
To find out more about the specific types of boat dealers insurance policies you'll need, how much coverage your dealership needs - speak with an experienced insurance broker.
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
- Specialty Marine
The boat and watercraft industry, like any other industry, needs marine insurance to protect against a range of potential risks and liabilities. These risks can include accidents or injuries on the water, damage to boats or watercraft, and financial losses due to unforeseen circumstances.
One major risk in the boat and watercraft industry is the potential for accidents or injuries on the water. Whether it's a collision with another vessel, a capsizing, or a passenger falling overboard, accidents can happen at any time. Marine insurance can help cover the costs of medical expenses, legal fees, and damages resulting from such accidents, protecting the business from financial ruin.
Another risk is damage to boats or watercraft. Whether it's due to storms, accidents, or wear and tear, damage to these vehicles can be costly to repair or replace. Marine insurance can help cover these costs, ensuring that the business can continue operating without incurring significant financial losses.
In addition to these risks, the boat and watercraft industry is also subject to a range of financial risks, such as lost income due to unforeseen circumstances or damage to business property. Marine insurance can help protect against these risks, ensuring that the business is able to weather any storms and continue operating in the face of unexpected challenges.
Overall, marine insurance is an essential part of running a successful boat and watercraft business. It helps protect against a range of risks and liabilities, ensuring that the business is able to weather any storms and continue operating smoothly.
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.