Marina Insurance Policy Information
Marina Insurance. As a marina owner, you're tasked with a lot of responsibilities. Not only do you have to ensure that the vessels you keep watch over are well-protected, but you also have to ensure that your property is cared for, and of course, that any staff you employ is taken care of.
In other words, marina owners are exposed to a lot of risks.
Marinas, boat yards or boat moorage facilities offer a wide variety of services to both private and commercial boat or yacht owners and their guests. Marinas offer launching slips or dock space rental, some to members only and some to the public. Some offer storage facilities, both wet (in the water) and dry (out of the water).
Vessels stored in dry dock may be kept indoors or outdoors in a yard. Other services may include retail sales of accessories, fuel or supplies, pumping out of the vessel's waste tank (refuse from galley and head), boat rentals, service and repair facilities, dry docks for painting, cleaning, refitting, or winterizing, and restaurants or bars.
There may be a launching slip for customers' use. The marina may have lifts to take boats out of the water. They may offer instruction, boat races and contests, demonstrations and promotions. If the marina does not offer all the services mentioned, these may be contracted elsewhere to meet the needs of their customers.
As the owner and operator of a marina, you are liable for anything that goes wrong. In order to protect yourself from the risk of serious financial losses, you need to invest in the right type of marina insurance coverage.
What kind of insurance do you need? How much should you carry? Read on to find out how to properly protect your AL marina from any mishaps that may be thrown your way.
Marina insurance protects your boat yard and moorage facility from lawsuits with rates as low as $67/mo. Get a fast quote and your certificate of insurance now.
Below are some answers to commonly asked accounting insurance questions:
- What Is Marina Insurance?
- How Much Does Marina Insurance Cost?
- Why Do Marinas Need Insurance?
- What Type Of Insurance Do Marina Need?
- What Does Marina Insurance Cover & Pay For?
What Is Marina Insurance?
Marina insurance is a type of insurance coverage specifically designed for marinas, boat docks, and other water-based businesses. It provides financial protection against various risks and liabilities associated with these businesses, such as damage to boats or docks, accidents involving customers or employees, and liability for environmental pollution.
Marina insurance typically includes coverage for property damage, business interruption, liability, and workers' compensation. It also provides options for specific coverage needs such as fuel spill liability, towing and salvage, and theft.
How Much Does Marina Insurance Cost?
The average price of a standard $1,000,000/$2,000,000 General Liability Insurance policy for small marinas ranges from $67 to $89 per month based on location, services offered, revenue, claims history and more.
Why Do Marinas Need Insurance?
Despite trying your best to make sure that everything runs smoothly with your marina, there is always a chance that something could go wrong.
Your entire property could go up in flames, a storm could wipe out your bulkheads and piers, a customer could file a lawsuit against you, claiming that you were responsible for damaging their boat, or an employee could suffer a work-related injury. These are just a few examples of the things that could go wrong.
If something unexpected occurs, you could be looking at some serious financial losses. The cost of medical bills, repairs, property damage, and more could end up costing you a fortune. That's why having the right type of insurance coverage is so important.
As long as you're covered, instead of paying for any mishaps that do occur yourself, your insurance carrier will cover the cost for you. Not only will having the right kind of marina insurance coverage protect you from serious financial losses, but marina owners are also legally required to carry insurance coverage.
If you aren't covered, you could be looking at serious fines and could potentially even end up having your marina shut down.
What Type Of Insurance Do Marina Need?
There are several types of marina insurance coverage that marina owners will need. The specific type of coverage you'll require depends on a variety of factors; where your marina is located, the size of the marina, and the risk for storm damage in your area, for example.
Because insurance requirements may vary, it's best to speak with a reputable insurance agent who has experience insuring marina owners.
To give you an idea of some of the different types of insurance marina owners will need, here's a look at a few examples of the coverages you might need to carry:
- Commercial Property - This type of insurance coverage protects your commercial property, as well as the contents within it from acts of nature, vandalism, and theft. For example, if high winds pulled the roof off of your marina, an explosion occurred, or someone vandalized your building, this type of coverage would help to cover the cost of repairing or replacing any damages.
- Inland Marine - This type of insurance can be considered a "floater" policy, as it protects your property when it isn't on-site. For instance, it will cover your travel lifts, compressors, for lifts, and other gear and tools that you may use in different locations when they aren't on-site of your marina.
- General Liability - Like any other business owner in any other industry, you'll also need to invest in general liability coverage. This type of insurance protects you from third-party personal injury and property damage claims. For example, if a client were to fall off the bulkhead while docking their boat and claim that the accident occurred because you didn't properly maintain the bulkhead, this coverage would protect you. It helps to cover any legal expenses, as well as compensation that you may be required to pay.
- Workers Compensation - If you employ a staff, it's your responsibility to provide them with a safe work environment. If one of your employees were to become injured on the job, workers' comp would help to pay for any medical care that they require, as well cover any wages that they may lose if they were unable to work while recovering.
The above-mentioned policies are just a few examples of the type of marina insurance coverage you should consider for your boat yard.
Marina' Risks & Exposures
Premises liability exposure is high due to waterfront facilities and the public access to the premises. Tripping and slip and fall hazards are common. 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 may pose an attractive nuisance to children and teens, especially during the off season. Chains and fences should be in place to prevent entrance to the premises after hours.
The more land-based the operation, the greater the exposure because once the customer boards a vessel, the premises liability stops and the inland or ocean marine exposure begins. Docks present numerous hazards. Wet or slippery surfaces, inadequate markings, poor maintenance, obstacles left on the dock by the insured or others may result in injuries to customers or guests.
If alcohol is sold on premises, there is a significant liquor liability exposure since alcohol combined with watercraft can be a deadly combination. 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.
Environmental impairment exposure 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 and pump-out operations. All above-ground and underground tanks 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. Fuel pumps that are available to the public pose an exposure due to the possibility of spillage into waterways. Contracts should be in place to dispose of all environmentally dangerous chemicals.
Workers compensation exposures are most significant in the repair operation and any 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 repaired 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.
The transporting of boats from storage to the water may involve cranes, lifts, winches or other heavy equipment, including rails. There may be Longshore & Harborworkers Compensation Act or Maritime exposure if work is done on or near the water.
Property exposure may be limited to a retail store operation or include hazards of boat repair, spray painting and even a full-service restaurant. If painting, welding, fiberglass repair or cooking exposures are done on premises; the exposure to fire will be increased. Cooking surfaces must be properly protected. Flammables must be properly labeled, stored and separated.
Spray painting should be conducted in spray booths with good ventilation, UL-approved wiring and fixtures and adequate controls. If welding is a part of the repair and body work operation, it 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. Oily rags must be kept in covered metal containers. Work areas must be cleaned regularly and trash removed from the building. Marinas are often at a distance from fire stations, and access may be difficult due to natural obstructions or poor road quality.
Although located near water, lack of equipment, procedures or training may result in a severe fire loss. Wind, wind-driven water and hurricane damage pose catastrophe potential as the marina 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 exposures are from employee dishonesty and theft of money and securities. 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 exposures come from accounts receivable if the operation offers credit; bailees customers for watercraft in for service, repair or storage; computers used to monitor inventory; goods in transit if the operation delivers watercraft to customers; and valuable papers and records for manufacturers' and customers' records.
Contractors' equipment may include marine railways, hoists and other marine equipment used to move boats in and out of the water, equipment used for lifting and transporting vessels and to maintain the premises.
Particular concern should be shown for any item that is used near or in the water. Watercraft stored in the open are particularly susceptible to damage by vandalism and theft. Lots should be well lighted with chains, fences or gates to prevent access and transport.
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. The operator may own one or more boats. There may also be a rental boat exposure.
Ocean marine exposure includes the dock and any owned vessels. Piers and docks may be susceptible to weather perils as well as damage from vessels. Hoisting exposures seaside may be similar to those under inland marine, but the catastrophe potential is often significantly increased due to the higher value of ocean-going watercraft and the unpredictability of the ocean.
The insured may own one or more boats or other watercraft that are for personal use and/or rental. Ocean marine includes the liability exposures (as protection and indemnity coverage) so any rental operation can add a significant exposure.
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 Marina Insurance Cover & Pay For?
Marinas can be sued for a variety of reasons, and in many cases, insurance plays a crucial role in protecting them from the financial burden of these lawsuits. Here are some examples:
1. Negligence Resulting in Personal Injury: Marinas can be sued if someone is injured on their property due to negligence. For example, a visitor might slip on a poorly maintained dock, or get injured due to malfunctioning marina equipment. In such cases, general liability insurance can help. This type of insurance covers legal costs, medical payments, and any damages awarded if the marina is found to be at fault. Additionally, workers' compensation insurance would cover injuries to employees.
2. Property Damage: If a boat is damaged while docked in a marina, the boat owner might sue the marina for damages. This could be due to anything from poor maintenance of docking facilities, to negligence by marina staff, or even damage caused by other boats that the marina failed to prevent. Marina operators legal liability insurance, a specific type of coverage, can help in this situation by covering the legal costs and any damages awarded in such cases.
3. Environmental Damage: Marinas are often sued for environmental damage, such as oil spills or other forms of pollution. This can result from the discharge of hazardous materials from the marina or from boats docked there. In these instances, pollution liability insurance can cover the cost of clean-up, legal fees, and any fines or damages that might be assessed.
4. Breach of Contract: If a marina fails to uphold its contractual obligations to a boat owner or other party, they may face a lawsuit. For instance, if a marina promises to provide certain services as part of a docking agreement and fails to do so, they may be held liable. Professional liability insurance (also known as errors and omissions insurance) can protect marinas in such scenarios, covering the costs of legal defense and any damages awarded.
5. Business Interruption: While not a lawsuit per se, marinas can face significant financial losses due to unforeseen interruptions, such as natural disasters, that can lead to closure or reduced operations. In these cases, business interruption insurance can help cover the loss of income during the period of interruption, helping the marina to stay afloat financially.
Insurance is an essential tool for risk management in all businesses, including marinas. Each marina should work closely with an insurance professional to understand their specific risks and ensure they have the right coverage to protect their financial well-being.
Commercial Insurance And Business Industry Classification
- SIC CODE: 4493 Marinas
- NAICS CODE: 713930 Marinas
- Suggested Workers Compensation Code(s): 6836 Marina & Drivers - Coverage Under State Act Only, 6826F
Description for 4493: Marinas
Division E: Transportation, Communications, Electric, Gas, And Sanitary Services | Major Group 44: Water Transportation | Industry Group 449: Services Incidental To Water Transportation
4493 Marinas: Establishments primarily engaged in operating marinas. These establishments rent boat slips and store boats, and generally perform a range of other services including cleaning and incidental boat repair. They frequently sell food, fuel, and fishing supplies, and may sell boats. Establishments primarily engaged in building or repairing boats and ships are classified in Manufacturing, Industry Group 373. Establishments primarily engaged in the operation of charter or party fishing boats or rental of small recreational boats are classified in Services, Industry 7999.
- Boat yards, storage and incidental repair
- Marine basins, operation of
- Yacht basins, operation of
Marina Insurance - The Bottom Line
To find out more about the exact types of marina insurance policies you'll need, how much coverage your boat yard needs - speak with an experienced insurance broker who understands the unique risks of marinas.
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.