Watercraft Manufacturers Insurance Policy Information
Watercraft Manufacturers Insurance. Watercraft - perhaps more universally known as waterborne vessels - comprises a diverse range of vehicles as different as freight ships and aircraft carriers or jet skis and small lifeboats.
Watercraft manufacturers produce a wide variety of vessels, including powerboats, hovercrafts, personal watercraft (such as a jet ski) paddleboats, rowboats, kayaks, canoes, rigid inflatable boats (RIB), pontoons, sailboats, sail boards, stand up paddle boards (SUP), ice-sails and a host of other vessels for both recreational and commercial uses.
Vessels can be made of wood, aluminum, welded steel, plastic, synthetic rubber, or fiberglass, and may be operable with an inboard or outboard motor, a detachable motor or have no motor at all. Larger vessels may include navigational aids, sleeping and cooking facilities, or extensive customization.
The process consists of product design, developing patterns or molds for component parts, making or subcontracting the various parts, assembling the final product, finishing, testing and quality control, and delivery to the dealer or end customer.
Operations include metal casting, electroplating, heat treating, and sheet metal stamping, fabricating exposures from welding to grinding to spray-painting, plastic extrusion or molding, and fabric upholstery work.
Because of the varieties of materials and processes involved, the different phases of manufacture may be carried out in different locations or different countries. The manufacturer may offer repair and refitting services.
While some of these watercraft are carefully built in large shipyards over the course of many months, others are manufactured in factories or smaller workshops. Steel, aluminum alloys, glass fiber and cork (for insulation), and various paints are among the more common materials used in this field of industry.
Manufacturers of watercraft of any kind have one thing in common; regardless of the purpose of the watercraft, the vessel must, once waterborne, protect the safety of those onboard. As such, this industry is one on which lives depend.
Companies that manufacture or construct watercraft face a number of risks - perils that could threaten their facility or the machinery and tools they depend on, accidents, criminal acts, and manufacturing errors could all jeopardize their financial future.
What types of watercraft manufacturers insurance might these companies need to protect themselves?
Watercraft manufacturers insurance protects your manufacturing business from lawsuits with rates as low as $57/mo. Get a fast quote and your certificate of insurance now.
Below are some answers to commonly asked watercraft manufacturing insurance questions:
- What Is Watercraft Manufacturers Insurance?
- How Much Does Watercraft Manufacturers Insurance Cost?
- Why Do Watercraft Manufacturers Need Insurance?
- What Type Of Insurance Do Watercraft Manufacturers Need?
- What Does Watercraft Manufacturers Insurance Cover & Pay For?
What Is Watercraft Manufacturers Insurance?
Watercraft manufacturers insurance is a type of insurance designed specifically for companies that manufacture boats, personal watercraft, or other watercraft. This insurance covers the financial risks associated with the manufacturing process, including product liability, property damage, and injury to employees. The coverage may also include protection against damages or losses that occur during shipping and delivery of the watercraft.
This insurance is necessary for manufacturers to protect their business and ensure that they can continue to operate even in the event of an accident or unexpected event.
How Much Does Watercraft Manufacturers Insurance Cost?
The average price of a standard $1,000,000/$2,000,000 General Liability Insurance policy for small watercraft manufacturing businesses ranges from $57 to $79 per month based on location, size, revenue, claims history and more.
Why Do Watercraft Manufacturers Need Insurance?
Investing in insurance coverage that protects you from the financial fallout of major perils means investing in the future of your company. In insuring yourself against the many things that could go wrong in your branch of industry, you can rest assured that the challenges you can face will not lead to your downfall.
With the proper insurance coverage, otherwise catastrophic events such as theft, vandalism, and acts of nature (hail, hurricanes, wildfires, earthquakes, and other natural disasters) can still cause severe damage. You will, however, be able to recover more easily and quickly as a significant portion of the costs is covered.
With the correct insurance coverage, employees can still sustain accidents in the workplace, or suffer occupational illnesses as a result of exposure to high noise levels. You will not, however, need to worry about covering the resulting costs on your own.
Third parties may still become injured while visiting your premises. Your company's activities may cause damage to others' property, while launching a ship for example, alongside excellent insurance. Manufacturing errors that potentially lead to dangerous situations when a craft you built is already waterborne are another risk, despite a thorough inspection process.
The right watercraft manufacturers insurance coverage cannot prevent major disasters, but it does help you recover from them. It is, therefore, an essential part of your risk management strategy.
What Type Of Insurance Do Watercraft Manufacturers Need?
Crafting the insurance plan that best suits your company's particular needs is not a straightforward process.
A commercial insurance broker can guide you through the steps, based on factors like the types of watercraft you make, the location of your manufacturing facility, the value of your machinery, and your number of employees.
Regardless of what kind of watercraft your business makes, however, you will need the following types of watercraft manufacturers insurance:
- Commercial Property: This type of insurance protects your commercial property or properties - as well as other physical assets therein, including machinery and raw materials - in case of unforeseen circumstances such as fire, theft, or a hurricane. Any revenue you lose to production interruptions in the aftermath of an event that leads to serious damage may also be covered.
- Commercial General Liability: Companies are sued for all sorts of reasons, including scenarios in which they cause damage to the property of a third party or somebody sustains injuries on their premises. In these cases, commercial general liability insurance covers your legal and settlement fees.
- Product Liability: Essential to any manufacturer whose products could potentially cause harm to third parties, this type of watercraft manufacturers insurance coverage would cover your legal costs if a watercraft you manufactured malfunctioned, causing property damage or injury. Should you need to recall a product, the associated costs can also be covered under this type of insurance.
- Workers' Compensation: Workers in the shipbuilding industry face a relatively high risk of workplace accidents, even if health and safety protocols are followed. Should one of your employees become injured, workers comp pays for their medical expenses. Employees who cannot return to work will further be compensated for lost wages.
Bear in mind that these are merely examples of the types of watercraft manufacturers insurance needed - while these kinds of coverage are vital, your company is likely to have additional needs.
Because of this, companies looking for the best ways to protect their business should always consult a trusted commercial insurance agent.
Watercraft Manufacturing's Risks & Exposures
Premises liability exposure is normally low due to limited access by visitors. However the exposure can be high if a body of water exists on the premises, or the premises includes waterfront property for testing finished products. If tours are given or if outsiders are allowed on premises, visitors may be injured by slips, trips, or falls, or drown if they fall into the water.
The moving, rearranging and hooking up of owned and non-owned vessels pose a collision hazard to persons or property. If stock is stored in the open, it becomes attractive to trespassers, particularly children, especially if operations are seasonal.
Fumes, dust, and noise from processing operations may affect neighbors, resulting in nuisance claims. Off-premises liability exposures come from exhibitions or demonstrations at retail locations, fairs, or conventions. Customers taking watercraft for test drives should be accompanied by an employee familiar with handling of the vessel.
Products liability exposure is low to high, depending on the type of watercraft produced, the passenger load, and its usage. Losses may be caused by poor workmanship, faulty design, or hidden damage during storage (such as rust) or during shipping (such as unseen breakage of a part).
The exposure is low for canoes, paddleboats, and rowboats, but high for powered boats or personal watercraft, especially those designed for deep water use, non-powered boats designed for extreme sports such as whitewater rafting and survival camping, and kit boats (where the parts are assembled by the customer).
Specialty markets may be needed for this exposure. It may be impossible to defend against questionable claims unless there is an aggressive quality control program including high standards for materials, testing and monitoring of components, and documentation of sources (often down to the individual part). Because watercraft may be used seasonally, there may be a longer period of use than other consumer goods.
Older watercraft made before improved safety features were introduced may still be in use, extending the period for product liability claims to be made.
Environmental impairment exposure can range from moderate to high due to the potential for air, land and water pollution from dust and fuel storage tanks. Raw plastics and synthetic rubbers are flammable and may be toxic, the catalysts may be caustic, and the final product is usually not biodegradable.
Metal contaminants may come from the chemicals, paints, and solvents used. Vapors, fumes and air pollutants, wastewater and by-products disposal must be evaluated and controlled. Disposal of plastics, chemicals and flammable liquids must adhere to all EPA and other regulatory standards.
If the applicant does testing, fuel tanks will be on premises with the potential for spillage and contamination. If there are underground tanks, a UST policy may be required.
Workers compensation exposure can be extremely high. Injuries from production machinery are common, as are minor cuts, burns, slips, trips, falls, foreign objects in the eye, back injuries from lifting, hearing loss from noise, and repetitive motion losses. Workstations should be ergonomically designed.
Employees should be provided with safety training and protective equipment. Areas that generate dust require respiratory protection devices, as well as eye protection and eye wash stations. Metalworking can result in amputations, burns from welding and heated metal, exposure to dust, and respiratory problems from inhaling spray-paint or solvents. Plastics have similar exposures, plus potential for burns from heated machinery and eye and skin irritants from chemicals and resins.
Exposures may be over water or on docks and may fall into the longshore and harborworkers or Jones Act categories. Employees may fall into the water and drown or be injured on hoisting equipment. Propeller blades present a significant risk in some phases of testing, quality control, and research.
Property exposures consist of an office, plant or construction yard, and warehouse or yard for storage of raw materials, components, and finished units. Storage facilities may be dry (on land) or wet (in the water). Vessels stored in dry dock can be indoors or outdoors. Ignition sources include electrical wiring, heating systems, production machinery, welding and spray painting.
Wear and tear and overheating of machinery are potential fire hazards. There may be fuel tanks on premises. Hazards may include woodworking, sheet metal work, casting, heat treating, electroplating, plastic, fiberglass work, and upholstery operations.
In the absence of well maintained dust collection systems, cutting and buffing operations can generate dust which can catch on fire. Welding should be done in a separate area away from combustibles.
Spray painting should be conducted in an area with explosion-proof wiring that meets all UL standards. Poor housekeeping, such as failure to collect and dispose of trash on a regular basis, could contribute significantly to a loss. Unless disposed of properly, greasy, oily rags (such as those used to clean machinery) can cause a fire without a separate ignition source.
Waterfront exposures include wind, hail, wind-driven water losses, and vandalism. Appropriate security controls must be taken including lighting and 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.
Bottlenecks in the assembly process may result in a high concentration of values of partially completed units, affecting both property valuation and business income. There may be a substantial exposure to loss of income resulting from damage to contributing or dependent properties such as suppliers or customers.
Equipment breakdown exposures include malfunctioning production equipment, dust collection and ventilation systems, electrical control panels and other apparatus. These should be properly maintained and records maintained in a central location. A lengthy breakdown could result in severe loss, both direct and under time element.
Crime exposure comes from employee dishonesty and theft as component parts and finished items are high in value. Employees may act alone or in collusion with outsiders in stealing money, raw materials or finished stock. Background checks should be conducted on all employees.
There must be a separation of duties between persons handling deposits and disbursements and handling bank statements. There should be security methods in place to prevent theft.
Inland marine exposures include accounts receivable if the manufacturer offers credit, computers (which may include computer-run production equipment), exhibitions, goods in transit, and valuable papers and records for customers' and suppliers' information. Backup copies of all records should be made and stored off premises.
Contractors' equipment may be used for lifting and transporting vessels and to maintain the premises. If located next to a waterway, marine railways and hoists may be required to move boats in and out of the water.
The insured may own one or more boats in addition to stock. The primary causes of loss are fire, wind, hail, theft, collision, overturn, and sinking.
Ocean marine exposure includes the dock and any owned vessels. Oceanside hoisting exposures may be similar to those under inland marine, but the loss potential is significantly increased due to the value of the vessels and the greater severity of the ocean currents and weather.
Commercial auto exposure can be high if the manufacturer picks up raw materials or components or delivers finished goods to customers. Transportation of oversized watercraft requires careful loading and tie-down to prevent items from coming loose and toppling over during transport. Manufacturers generally have private passenger fleets used by sales representatives.
There should be written procedures regarding the private use of these vehicles by others. Drivers should have an appropriate license and an acceptable MVR. All vehicles must be well maintained with documentation kept in a central location.
What Does Watercraft Manufacturers Insurance Cover & Pay For?
Watercraft manufacturers may face legal action for several reasons, each with its associated risks and potential financial consequences. However, the right insurance policies can provide significant protection. Here are some examples:
Product Liability: This is perhaps the most common cause of lawsuits against watercraft manufacturers. If a boat or its parts malfunction and cause damage or injury, the manufacturer may be held accountable. For instance, if a boat's engine explodes or a component breaks, leading to an accident, the injured party could sue the manufacturer. Product Liability Insurance is designed to protect manufacturers in such cases. It covers the costs of legal defense, settlement negotiations, and any damages awarded in court. This insurance helps manufacturers safeguard their financial health while also maintaining their reputation in the market.
Workers' Compensation Claims: Boat manufacturing involves numerous hazards, and accidents can occur in the workplace. If an employee is injured while working, the manufacturer could be sued for compensation. Workers' Compensation Insurance is crucial for manufacturers. It covers medical costs, rehabilitation expenses, and a portion of lost wages if an employee is injured on the job. Furthermore, this insurance also provides employers with liability coverage, protecting them from lawsuits arising from workplace accidents.
Property Damage: Watercraft manufacturers often operate in large facilities with expensive equipment. These properties are susceptible to damage from various factors like fire, vandalism, or natural disasters. If these incidents occur and disrupt business operations, they could lead to lawsuits from clients or suppliers due to the inability to meet contractual obligations. Commercial Property Insurance protects manufacturers by covering the costs of repairing or replacing damaged properties. It can also cover business interruption losses, thereby enabling the manufacturer to continue operations and meet their obligations.
Environmental Liability: Watercraft manufacturing processes may involve the use of hazardous materials, which, if not properly handled, can result in environmental contamination. If a manufacturer is found responsible for such contamination, they could face lawsuits for the clean-up costs and any resulting injuries or damages. Environmental Liability Insurance can protect manufacturers in such situations by covering the costs associated with legal defense, clean-up efforts, and any damages awarded by the court.
Errors and Omissions: If a manufacturer fails to meet the specifications of a contract or makes an error in the design or manufacture of a watercraft, they could be sued for any resulting damages. Errors and Omissions Insurance (Professional Liability Insurance) covers the costs of such lawsuits. It provides coverage for legal defense, settlements, and any court-ordered compensation, ensuring that a simple mistake does not lead to a financial disaster.
These examples highlight the importance of insurance in managing risks for watercraft manufacturers. By carefully selecting the right types and amounts of insurance, manufacturers can protect themselves from the potential financial consequences of a lawsuit.
Commercial Insurance And Business Industry Classification
- SIC CODE: 3731 Ship Building And Repairing, 3732 Boat Building And Repairing
- NAICS CODE: 336611 Ship Building and Repairing, 336612 Boat Building
- Suggested Workers Compensation Code(s): 6824F, 6834 Boatbuilding or Repair & Drivers, 6811 Boatbuilding - Wood NOC & Drivers - Coverage Under State Act Only, 6801F, 6843F, 3620 Boilermaking, 6845F
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
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
Watercraft Manufacturers Insurance - The Bottom Line
Watercraft manufacturers insurance policies differ a lot in coverage, costs and exclusions. To learn if your watercraft manufacturing operation has the best fit insurance policies - talk to an experienced commercial insurance broker.
Often they are able to save you on premiums and offer you better policy options than you currently have.
Additional Resources For Manufacturing Insurance
Learn all about manufacturing insurance. Manufacturers face many unique risks such as product libility and/or product recall exposures due to the nature of their business operations.
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- Plastic Goods
- Plastics Molding, Forming & Extruding
- Product Liability
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- Specialty Product Liability
The manufacturing industry is a vital part of the economy and plays a significant role in the production of goods and services. However, it is also an industry that is prone to risks and accidents, which can result in costly damages and lawsuits. Therefore, it is essential for businesses in the manufacturing industry to have insurance to protect them against potential losses.
Business insurance can cover a wide range of risks, including property damage, liability, and worker injuries. For instance, if a fire were to break out in a manufacturing facility and destroy equipment or inventory, commercial insurance could cover the costs of replacing or repairing the damages. Similarly, if a worker were to be injured on the job, business insurance could cover medical expenses and lost wages.
In addition to protecting against physical damages, insurance can also provide financial protection against legal liabilities. If a customer were to sue a manufacturing business for a faulty product, the commercial insurance could cover the costs of legal fees and settlements.
Overall, insurance is essential for the manufacturing industry as it helps to mitigate risks and protect against unexpected costs. Without it, businesses in the industry could face financial ruin in the event of an accident or lawsuit.
Minimum recommended small business insurance coverage: Building, Business Personal Property, Business Income with Extra Expense, Equipment Breakdown, Employee Dishonesty, Accounts Receivable, Computers, Goods in Transit, Valuable Papers and Records, General Liability, Employee Benefits Liability, Environmental Impairment Liability, Umbrella Liability, Hired and Non-owned Auto Liability & Workers Compensation.
Other commercial insurance policies to consider: Earthquake, Flood, Cyber Liability, Employment-related Practices Liability, Business Auto Liability and Physical Damage and Stop Gap Liability.