Ship Chandler Insurance Policy Information
Ship Chandler Insurance. Ship chandelling services are unique businesses that are dedicated to supplying ships with all the goods they may need, often at extremely short notice.
A ship chandler specializes in providing goods and services to commercial seagoing vessels and their crews. The chandler sells products from its own stock and coordinates the delivery of goods and services from others.
The ship chandler sells goods used for the ongoing maintenance and upkeep of the ship while at sea, such as canvas, cleaning supplies, hand pumps, hand tools, hemp, paint, pesticides, pitch, ropes, tar, and varnish.
They also sell clothing, food, and personal supplies to the crew. Services such as cleaning, laundry, mail, medical services or land transportation may be arranged. Engineering, recertification, security, and fuel services may also be provided.
As ships may be docked for a very short period of time, fast turnaround time is critical, so ship chandlers must be available 24 hours a day, seven days a week. Deliveries can be made by truck or by boat.
For this reason, chip chandlers play an absolutely vital role for many commercial long-haul ship crews, who find in their chandler a reliable one-stop shop to meet all their needs.
If you own and manage a ship chandelling agency, or are considering opening a business of this type, you'll know that this field is an exciting and highly-rewarding one.
Since ship chandlers also face numerous risks, however, it is essential to protect your business from financial hardship with excellent insurance. What types of ship chandler insurance coverage are needed? Discover more in this guide.
Ship chandler insurance protects your operation from lawsuits with rates as low as $47/mo. Get a fast quote and your certificate of insurance now.
Below are some answers to commonly asked ship chandelling insurance questions:
- What Is Ship Chandler Insurance?
- How Much Does Ship Chandler Insurance Cost?
- Why Do Ship Chandlers Need Insurance?
- What Type Of Insurance Do Ship Chandlers Need?
- What Does Ship Chandler Insurance Cover & Pay For?
What Is Ship Chandler Insurance?
Ship Chandler insurance is a type of insurance policy specifically designed for ship chandler businesses. These businesses provide supplies and services to ships, such as food, fuel, and maintenance equipment.
Ship Chandler insurance covers the risks associated with this type of business, including property damage, liability, and theft. This insurance protects the business from losses due to unexpected events, such as fires, storms, theft, or lawsuits.
This type of insurance is crucial for ship chandler businesses as they deal with large amounts of inventory and valuable equipment, which can be vulnerable to loss or damage. Additionally, the nature of the business requires that the company be available 24/7, so having insurance coverage in place is essential to provide peace of mind and financial security.
How Much Does Ship Chandler Insurance Cost?
The average price of a standard $1,000,000/$2,000,000 General Liability Insurance policy for small ship chandlers ranges from $47 to $79 per month based on location, size, revenue, claims history and more.
Why Do Ship Chandlers Need Insurance?
Ship chandlers are in a unique branch of commerce, but just like any other business, they face a multitude of threats. Both universal risks and industry-specific hazards can have devastating financial consequences.
Not all perils can be prevented, but a comprehensive insurance plan can give you the peace of mind that you only get when you know your business is shielded from sudden costs.
Your facility could be damaged in an act of nature - like an earthquake, hurricane, or severe storm. Vandalism, theft, or accidents like fires could ravage your office space and its contents. An employee could sustain an injury over the course of their job, and depending on the circumstances, you may be liable.
Vendors, clients, and other third parties may file a lawsuit against your company, leading to exorbitant costs. Should a part you supply to a ship turn out to be faulty, you could be held responsible even though your company did not manufacture the part.
These examples of scenarios that may befall a ship chandler despite every effort to provide the best service explain why it is absolutely essential to assess your insurance needs meticulously. With the right ship chandler insurance coverage, your costs will be minimized. Your ship chandelling service will be able to recover from the peril and continue to thrive.
What Type Of Insurance Do Ship Chandlers Need?
Ship chandlers will need to invest in a range of insurance policies. Factors that include the jurisdiction in which your business is based, the value of your assets, your number of employees, and the types of ships you cater to, will all influence your precise insurance needs.
A commercial insurance broker who is deeply familiar with your field of industry is best placed to offer you advice tailored to your risk profile - in turn, making sure your ship chandelling agency is optimally insured. With that said, this is a look at some of the core types of ship chandler insurance within your industry:
- Commercial Property - This form of coverage will shield you from the financial consequences of disasters like acts of nature, accidents, theft, and vandalism, which inflict damage on your office space and its contents. Added business interruption insurance helps you recover some of the lost revenue you will also face.
- General Liability - If a third party were to be injured within your facility, or due to your company's activities, this type of ship chandler insurance covers legal defense fees and settlement costs associated with lawsuits that arise from these incidents.
- Errors And Omissions - This kind of professional liability insurance serves the purpose of covering your legal costs in case your ship chandelling service faces allegations of professional negligence or misconduct.
- Workers' Compensation - Federally mandated for companies with employees in most states, workers' compensation insurance covers the medical bills and any lost income for any employee who is injured while at work.
- Commercial Auto And Marine - Ship chandlers may deliver goods to ships by boat or by truck. Commercial vehicles need to be protected with commercial auto insurance, while ships are covered by marine insurance. Should an accident, theft, act of vandalism, or other covered peril damage your vehicle or ship or cause occupants and third parties to be injured, the costs are covered.
While these examples of essential ship chandler insurance will cover you in the event of many common perils, your business may need to carry other types of insurance as well. To learn more, speak to a commercial insurance broker.
Ship Chandler's Risks & Exposures
Premises liability exposure is high due to the number of visitors to the shop. To prevent slips and falls, aisles must be adequate and free of debris. All goods should be kept on easily reached shelves so that customers do not pull items down upon themselves.
Flooring 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. Enough exits must be provided and be well marked with backup lighting systems in case of power failure.
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 business is open after dark, there should be adequate lighting and security appropriate to the area. There should be a disaster plan in place for unexpected emergencies.
Employees making deliveries to ships can present a property damage exposure. Contractual liability is a major exposure because the chandler is often the coordinator of goods and services and not the direct supplier.
Certificates of insurance and contracts with vendors should be obtained.
Personal injury exposures include allegations of discrimination and from apprehending and detaining shoplifters, which may result in claims of assault and battery, false arrest or detention, unauthorized or intrusive searches, or wrongful ejection from the premises.
Shoplifting procedures must be fully understood and utilized by all employees.
Products liability exposure is normally low unless items are directly imported. Foreign-made items should come from a domestic-based wholesaler. Any direct importer should be considered as a product manufacturer.
Environmental impairment exposure can be high due to the potential for air, land or water pollution from the mixture of paints, disposal of pesticides, used oil, degreasers, solvents, and batteries.
Workers compensation exposures are moderate due to employees standing for long hours, the use of computers, and restocking which requires lifting and placing items on shelves. Continual standing can result in musculoskeletal disorders of the back, legs, or feet.
Trips, slips, and falls are common. When work is done on computers, employees are exposed to eyestrain, neck strain, and repetitive motion injuries including carpal tunnel syndrome. Lifting can cause back injury, hernias, sprains, and strains.
Employees should be provided with safety equipment, trained on proper handling techniques, and have conveying devices available to assist with heavy lifting.
Housekeeping in storage areas, especially during peak times, is vital in preventing trips and falls. Cleaning workers can develop respiratory ailments or contact dermatitis from working with chemicals.
In any retail business, hold-ups may occur. Employees should be trained to respond in a prescribed manner. Drivers of delivery trucks can be injured in accidents.
Employees who load items onto the dock or the ship may fall into the water and drown or be hit by overhead cranes or other equipment. Coverage for maritime exposures can be purchases under the U.S. Longshore and Harbor Workers Compensation Act.
Property exposures are high due to large amounts of combustible materials stored on premises and multiple ignition sources. All wiring must be well maintained and meet current codes for the occupancy.
Some stock is perishable and susceptible to damage by fire, smoke and water. Flammables used for repair or held for sale must be properly stored, separated, and controlled.
High-value items such as specialized navigation equipment may be targeted by thieves. Appropriate security measures must be taken including physical barriers to prevent entrance to the premises after hours and an alarm system that reports directly to a central station or the police department.
Business income and equipment breakdown exposures are high as sales of goods and services are time-sensitive and backup facilities may not be readily available.
Crime exposures are from employee dishonesty and theft of money and securities either from holdup or safe burglary. Background checks should be conducted on all employees handling money. There must be a separation of duties between persons handling deposits and disbursements and reconciling bank statements.
Money should be regularly collected from cash drawers and moved away from the collection area, preferably to a safe on premises.
Inland marine exposures are from accounts receivable as goods and services purchased are billed to the ship's owner, computers to transact sales and monitor inventory, goods in transit for purchases made to customers, and valuable papers and records for vendors' and customers' information.
Backup copies of all records, including computer files, should be made and stored off premises. Contractors' equipment coverage may be needed if forklifts are used in the warehouse.
Business auto exposure can be high due to the need for prompt delivery services. Docks and piers may be congested, increasing the potential for an accident. Vehicles may overturn or fall into the water.
Anyone who uses an owned vehicle must have a valid license and acceptable MVR. Vehicles should have regular maintenance with records kept.
What Does Ship Chandler Insurance Cover & Pay For?
Ship Chandlers supply vessels with necessary goods, provisions, and services. Like any business, they can face legal action for a variety of reasons. Here are some scenarios where Ship Chandlers might face lawsuits, and how insurance could potentially cover the costs associated with these suits.
1. Breach of Contract: Ship Chandlers may be sued if they fail to deliver goods or services as per their contractual agreement. For example, they might supply lower quality goods than promised, or fail to deliver on time, causing a delay in the ship's voyage. In such cases, they could face a breach of contract lawsuit. A Professional Liability Insurance, also known as Errors and Omissions (E&O) Insurance, would come into play here. This type of insurance protects businesses against loss or damage claims made by clients due to mistakes or negligence in the course of duty.
2. Personal Injury or Damage: If a Ship Chandler's services or goods cause injury or damage, they could face a lawsuit. For instance, if a faulty piece of equipment provided by the Ship Chandler causes an accident on the ship, or if the food supplies cause food poisoning among the crew. In such a situation, General Liability Insurance would be beneficial. It covers claims of bodily injury, property damage, and personal and advertising injury. It can help pay for legal fees, court costs, and any settlements or judgments that the Ship Chandler is found liable for.
3. Employee-related lawsuits: Ship Chandler companies can also be sued by their own employees for issues like workplace injuries, harassment, wrongful termination, etc. Here, a Workers' Compensation Insurance would cover medical costs and a portion of lost wages if an employee gets hurt on the job. Similarly, Employment Practices Liability Insurance (EPLI) would cover lawsuits related to employment practices, including claims of wrongful termination, discrimination, and harassment.
4. Property Damage: If the Ship Chandler's warehouse or store is damaged due to a natural disaster, fire, or theft, they could face significant financial loss. Property Insurance would cover the costs of repairing or replacing the damaged property, allowing the business to recover more quickly.
Insurance is an essential risk management tool for any business, including Ship Chandlers. It provides a financial safety net in case of unexpected events, making it possible for businesses to continue operations even when faced with substantial lawsuits or damages.
Commercial Insurance And Business Industry Classification
- SIC CODE: 5399 Miscellaneous General Merchandise Stores
- NAICS CODE: 424990 Other Miscellaneous Nondurable Goods Merchant Wholesalers
- Suggested Workers Compensation Code(s): 8017 Store - Retail NOC
Description for 5399: Miscellaneous General Merchandise Stores
Division G: Retail Trade | Major Group 53: General Merchandise Stores | Industry Group 539: Miscellaneous General Merchandise Stores
5399 Miscellaneous General Merchandise Stores: Establishments primarily engaged in the retail sale of a general line of apparel, dry goods, hardware, housewares or home furnishings, groceries, and other lines in limited amounts. Stores selling commodities covered in the definition for department stores, but normally having less than 50 employees, and stores usually known as country general stores are included in this industry. Establishments primarily engaged in the retail sale of merchandise by television, catalog and mail-order are classified in Industry 5961.
- Catalog showrooms, general merchandise: except catalog
- Country general stores-retail
- General merchandise stores-retail
- General stores-retail
Ship Chandler Insurance - The Bottom Line
To learn more about the types of ship chandler insurance policies you should consider, how much coverage you should have and the associated premiums - speak with a reputable broker that is experienced in commercial 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
- 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.