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Liability question

1787 Views 11 Replies 8 Participants Last post by  Minnewaska
If one was to buy a boat and put it in a charter fleet that is covered by the charter fleets Insurance what would the personal liability to the actual owner be if someone is hurt onboard or damages another boat or property when the boat is out on a charter? Thanks for any info
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That's going to be too complicated to answer. It will depend on the corporate structure and jurisdiction for starters. Then, there is the form over substance issues, such as whether a corporation can really protect you.

Keep the idea of insurance and liability very separate. Liability doesn't care if you have insurance. Insurance only covers certain specific liabilities.
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An LLC is not a bad idea, but don't bet your life on it's protection. Most misunderstand what a corporate veil actually does. Essentially, it protects the owners of a corporation from the corporation's liabilities. IOW, if you own a share of Pepsi, you can't be sued, if they poison someone.

However, if you both own the LLC and manage it, which is almost always the case with these little LLC's that own boats, you aren't going to be sued as a shareholder, you're goiing to be sued individually as the manager (ie operator and/or decision maker) and the coporate veil doesn't help insulate your liability at all.
....The leasing company is vicariously liable for the death of a bystander???....
The answer used to technically be, yes. I'm pretty sure the last state to have vicarious liability laws was NY and they dropped them just a few years ago.

They were originally intended to hold the back seat owner liable for making their chauffeur drive recklessly, assuming only the hired help would get in trouble. They were never intended for the lease scenario, but someone sued someone under the technicality of the law and won.
I had a small boat that I put into a charter companies fleet. I had my BoatUS insurance amended to meet the charter companies requirements.
That's a good reference. Just be careful that the charter company's requirements are likely designed to keep their tail out of jail. Not necessarily yours.
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