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post #21 of 29 Old 04-09-2019
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Re: What are typical marina liability insurance requirements

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What are typical marina liability insurance requirements in the Great Lakes?

As we're shopping for our new boat (up in the Great Lakes) and lining up insurance, etc. they want to quote insurance with a $100K liability. Was a little surprised. Down here in FL marinas seem to be commonly asking for $300,000 but Marina Jack in Sarasota wants $1M liability. Of course they do have some fancy boats there...

People carry insurance in various amounts for personal reasons. Generally, people purchase insurance to protect themselves from actions taken by "the other person" as well as what you might do. The more you have (to lose), the greater your insurance needs.

Insurance companies want your business so they tend to quote you the minimum policy coverage they sell and hope you go with them. However, this doesn't really answer your question.

I have never been asked, as a transient boater, to show proof of registration and/or insurance at a private or municipal marina anywhere on Lake Michigan. I have been asked what my boat registration number is, the same as giving your car license plate number when staying at a hotel, but nobody checks to see if it is current.

Leasing a seasonal slip is a different matter. I can tell you that Wisconsin marinas tend to require a minimum of $300K with proof of insurance required when signing the slip lease contract. Minimum liability requirements across the Great Lakes will differ from state to state and may be subject to local municipal requirements.

So, check what the requirements are in the area you plan to base the boat. If you plan on sailing Canadian waters, see if there are any insurance requirements that they might have. And . . . most policies up here only cover your operation on the Great Lakes, their tributaries and the St. Lawrence Seaway. A separate policy or policy rider is required if you wander the waters of the Great Circle Route.

Enjoy!

Paul
`99 Beneteau Oceanis 352, #282 WiTCHCRAFT
Milwaukee, WI
Sailing Lake Michigan and the Great Lakes

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post #22 of 29 Old 04-09-2019
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Re: What are typical marina liability insurance requirements

As I said, Iíve traveled the length of the Canadian Great Lakes and never once been asked to show proof of liability coverage for transient dockage. If it happens, it must be the exception and not the rule (at least in Canada).

The only time Iíve had to show proof of any insurance was for my home marinas where I had seasonal dock space, and was hauled out.

With regard to liability minimums, I strongly suspect that the minimum liability required from any given marina will mirror the typical liability coverage local boaters tend to have as part of a normal (comprehensive) insurance policy. In Canada most boat insurance policies include a minimum of $1M, with $2M or even $5M now becoming more normal. This is had for pretty cheap (I think my $2M cost me something less than $100 CND). Whereas the more typical American policy offers liability coverage in the $300k range, presumably because it costs more in the USA, which makes perfect sense. The liability risk does appear higher in the USA.

All of this should tell us what these demands for liability coverage really are. They have little to do with actual risk, and more to do with checking a bureaucratic box.

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Re: What are typical marina liability insurance requirements

I would make a WAG that since a marina usually will carry insurance on their own, that THEIR insurer will have some things to say about requirements on their customers. And presumably their insurer would take a look at the marina, and the geographic area, and the general value of the boats they attract, and their insurer will say something like "All long term contracts will require the guest to have $$$$ coverage."

I don't think these numbers are being drawn out of a hat. Although, like any night club cover charge, it is a good way to keep the trash out. (Trash being a very relative term.)

Anyone here have inside knowledge of what a marina's insurer commands of them?
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Re: What are typical marina liability insurance requirements

Could be. But Iíve seen one demand letter from an insurance company to a marina owner in this regard. They demanded that the marinaís customers have liability insurance. It did not specify how much. This was in Canada (Belleville).

I bet it is more about your second point; itís a simple benchmark to keep the riff-raff out. The actual amount of coverage is rather irrelevant since even $10M coverage could easily be consumed in a large dock fire. But the reason liability is so cheap is b/c the real risk to the underwriter is quite low ó even in the litigious US of A.

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I would make a WAG that since a marina usually will carry insurance on their own, that THEIR insurer will have some things to say about requirements on their customers. And presumably their insurer would take a look at the marina, and the geographic area, and the general value of the boats they attract, and their insurer will say something like "All long term contracts will require the guest to have $$$$ coverage."

I don't think these numbers are being drawn out of a hat. Although, like any night club cover charge, it is a good way to keep the trash out. (Trash being a very relative term.)

Anyone here have inside knowledge of what a marina's insurer commands of them?

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Re: What are typical marina liability insurance requirements

Mike-
It is pretty much standard in the US for people who are putting out unilateral "contracts" to put in things like a hold-harmless clause, the goal being that even if the operators store gasoline in open tubs next to the barbeque pits, they will still sue *you* for setting fire to their gasoline. Yeah, well...which is any some US states have more laws about "adhesion contracts" written by and for just the one side, with no negotiations involved or allowed. Every so many years, a court finds a good reason to throw out those "ironclad" one-sided agreements, so putting some realistic minimum (in both value and affordability) on the insurance only makes sense.
Even just the one risk of fire...when I see the way that basically no one takes even the most basic steps to prevent and contain those problems, I'd be tempted to say a 20 million dollar liability policy might still be too small. (Not that I'd want to even ask how much that would cost!)
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post #26 of 29 Old 04-10-2019
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Re: What are typical marina liability insurance requirements

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I would make a WAG that since a marina usually will carry insurance on their own, that THEIR insurer will have some things to say about requirements on their customers.......
This is exactly the dynamic that drives the waiver of subrogation clause in many slip contracts. If you waive the right of your personal insurance carrier to be able to pursue the marina (a waiver your personal company must agree to or they have no obligation to pay your claim), then the marina's own insurance coverage becomes less expensive. The marina's insurance company has reduced their risk, since the marina is going to be pursued in almost all cases, even those that the boat owner seems to have caused.

If this isn't entirely clear to some, it may be helpful to point this out. Legal liability for damage has nothing to do with whether one has insurance or how much coverage. If party A causes damage to party B, Party A is liable. If party B is paid by their own insurance company, part of the payment release is going to be signing a document that transfers your right to pursue party A to the insurance company, who will then attempt to recover what they paid to you. That's subrogation.


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Re: What are typical marina liability insurance requirements

Waiver (effectively, banning of) subrogation clauses is a hot topic in Florida and other "hurricane" states as well. Too many home owners have given too many unscrupulous lawyers and contractors the right of subrogation, and they'll pump a $5000 roof claim into $15000, or so the insurers say, causing insurance payouts to be double or triple what they should be, which in turn causes huge rate increases. "He said, she said..."

Either way it can be a problem, but that's one more unilateral and overreaching clause in too many documents. Might as well add a clause saying I can't vote for any candidates from the two major parties, while they're at it.
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Re: What are typical marina liability insurance requirements

We're required to have a minimum of 100k liability at our marina on Lake Erie. We carry 500k. Keep in mind that besides being covered for liability for damage caused by you, on most policies they set the uninsured boater coverage at the same level as your liability. So you are also insuring yourself if you get hurt by someone else who is uninsured or underinsured.
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post #29 of 29 Old 04-11-2019
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Re: What are typical marina liability insurance requirements

I wonder how many people maintain coverage solely at the mandatory level, which has absolutely nothing to do with one's own risk management assessment. If one really can self-insure, I understand the simple compliance of choosing the minimum. If you understand the potential for loss, where it's your assets, not the insurance limit, on the line, it's highly unlikely that any state imposed minimum is the right number.

Said differently, just because you buy $500k, $1m or whatever amount of liability coverage, doesn't mean your exposure is limited to that level. It only means that's all they'll pay and your assets back up any additional loss. Also keep in mind the cost to defend the lawsuit you're involved in, if you caused a loss. It would be good to know the insurance company's requirement to defend and whether that comes out of your coverage limits. Some policies require you to defend yourself and they'll pay to the policy limit, if you lose. Not good. Others will defend you, but only until the lawyers have eaten up the coverage level, then there is nothing left to pay, if you lose. Too often, the inexpensive policies have less favorable terms like these, even though the coverage looks the same.

There are a ton of details beyond just knowing the coverage requirements. Get a good pro to help.

p.s. I'm not an insurance guy, but I've purchased quite a bit of insurance for all sorts of personal and commercial ventures.


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Last edited by Minnewaska; 04-11-2019 at 05:44 AM.
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