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Silvio 03-11-2013 05:18 PM

Types of insurance
over the past few days there has been some very interesting discussion regarding insurance in several different threads. It strikes me that many folks come to this site looking to untangle the mysteries of insurance, surveying, getting loans and whatnot when purchasing their first, tenth, or final boat.

Following some of the other threads I thought I would start his one in order to discuss the various TYPES of insurance out there and whether folks need, want, want others to have, would never have, etc. for themselves and others.

I'll start. I have a typical boat policy that covers my vessel and any damage to another's vessel or property that I may cause. Also covers my vessel if someone else damages mine when they are not covered or if I can't identify who caused the damage.

If I were to hire a delivery captain I would want that person insured as a professional with at least general liability. My thinking is it would keep me out of the line of fire if my hired professional negligently caused someone else harm. If he/she has an insurance provider, then I reason that their insurance provider could provide the "deep pocket target" instead of me or my provider.

Anybody else have any thoughts?

sailvayu 03-11-2013 06:01 PM

Re: Types of insurance
I have a article on insurance on my web site you may find useful
Marine Insurance
Your boat insurance will cover any Captain piloting your boat they do not normally carry their own. you just need to check with your agent but almost all policies will cover that or add it at little or no charge.

Capt. Wayne Canning, AMS

Silvio 03-11-2013 07:06 PM

Re: Types of insurance
Others mentioned that their policies cover a delivery captain as well. I am in no way an insurance or legal expert but wonder how a tort would be handled under one of those policies (or I guess rider is more appropriate?).

That is a very good article on your site btw. Very informative. I guess I have trouble seeing a delivery captain as anything other than a professional being hired as a contractor. If My insurance covers the captain then I would be in a sense providing the captain's business insurance? Or maybe I would have to see the captain as a "guest" operating my boat. IDK, maybe I am looking at it wrong by thinking of a delivery captain as a small business/independent contractor.

Let me toss out a for instance type scenario. Say that I hire a delivery captain and he/she hires two crew members. There is no employer-employee relationship between me, the captain or the crew since I wouldn't direct their work other than the contract of get my boat from here to there. Captain tells crew member A to fuel the boat. A tells crew B that the captain said to fuel the boat. B is an idiot and overfills, dumping 300 gallons of diesel fuel into the bay, which ignites because Captain is welding a new bow roller onto my boat and burns to the waterline a mega yacht belong to Fancy Lawyer.

I think that my boat is covered by my insurance policy, and probably even the fuel spill cleanup would be covered under my policy. It is when Fancy Lawyer starts looking to name defendants-with-deep-pockets that I would get concerned if Captain doesn't have his/her own liability insurance. I am assuming that there was clearly negligence, that there is clearly a tort claim in negligence, and that the insurance companies are going to be looking to get out of paying or at the least trying to recover their losses.

I am probably WAAAAAY over thinking this, but I find it interesting to hear how other folks view these relationships. I know I am spending too much time on Sailnet working through this stuff (boat goes back in the water Friday and I will be occupied once again,YAY!) but my background is building and contracting. Everybody has liability insurance. I hire subs and they not only have to show me the policy, they have to have me named as an additional insured, not because they are bad subs, but because it takes them individually out of any problem that might arise and I (or rather my insurance) can deal with it as the prime. This way Fancy Lawyer is redirected from going after a sub and instead has to deal with my insurer. The benefit is that a sub can't go after the owner for a dispute with me. It protects the innocent third party I suppose. It also is one reason that the prime commands a higher rate than a sub, we assume greater responsibility and higher risk.

sailvayu 03-11-2013 07:53 PM

Re: Types of insurance
you are looking at the capt. as a independent contractor as in construction. The captain is not seen as a contractor but as an independent employee. In the marine industry the Captain has no choice but to be able to make independent decisions so it sort of is like a contractor per your definition but is also sort of exempt due to the nature of the job. Think commercial captains, they must be allowed to make decisions independent from the owners. Obviously the captain of a cruise ship could not carry insurance for the ship and passengers! Most marine insurance is based on maritime laws dating back hundreds of years and is based on commercial needs. Also most insurance companies will view a paid captain as being more qualified than the owner. I know there are many very well qualified owners but there are equally many unqualified. From an insurance point of view the risk is less with a professional operating the boat.Hope that makes sense.

Capt. Wayne Canning, AMS
Project Boat Zen - Boat and Yacht Repair and Restoration

sailvayu 03-11-2013 08:13 PM

Re: Types of insurance
Oh and to address your specific example think about the Exxon Valdez (SP) The insurance company takes the risk knowing the vessel owner has hired a person that meets there requirements for the job, after that they take the risk. Although the capt was found negligent the insurance still has to pay. had the company instructed the capt to do something against standard marine practice, IE cut that mark to save fuel then they would have been at fault and the insurance would not have to pay. Of course the insurance company will do what it can to cut their loss and may go after a clearly negligent capt after the fact they will still honor the policy as they took the risk knowing the capt qualifications or at least that he met certain qualifications.

Capt. Wayne Canning, AMS
Project Boat Zen - Boat and Yacht Repair and Restoration

Silvio 03-11-2013 08:21 PM

Re: Types of insurance
All very good points. I'm glad you brought up the Valdez. That is a good example. I know that the companies involved paid and paid big for the captain's negligence. But suppose that the captain also is quite wealthy and has very deep pockets. Maybe he married an olive oil heiress or something. What prevents the insurance companies, or other's that were harmed by his negligence from coming after him personally? That is where I would think professional liability insurance would be beneficial.

sailvayu 03-11-2013 08:31 PM

Re: Types of insurance
Oh yeah if the capt is found negligent and has some worth you can bet the insurance company will go after him. It is rare though and most yacht claims are small even a CTL when compared to commercial loss. I am sure there are cases where it has happened more likely with loss of life. I am not aware of a specific liability insurance for captains such as error and omission for a consultant (or surveyor.) You bring up some good points but are reaching the limits of my knowledge of marine law lol

Capt. Wayne Canning, AMS
Project Boat Zen - Boat and Yacht Repair and Restoration

Silvio 03-11-2013 08:38 PM

Re: Types of insurance
I think your limits are greater than my own. I am enjoying the thought exercises!

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