Marina ownership and operation provide a unique blend of lifestyle and business opportunities, where serene waterside living intersects with the bustling world of vessel management. Although the prospect of a marina business is undoubtedly appealing, it also carries an array of potential risks and liabilities. This article delves into the world of marina insurance, shedding light on its critical role in safeguarding marina owners and operators from the myriad challenges they may encounter.
What is marina insurance?
Marina insurance covers the risks and liabilities associated with owning and operating a marina. A marina provides services such as docking, fueling, repairing, and storing boats and yachts. Marina insurance can protect the marina owner or operator from losses caused by property damage, bodily injury, environmental pollution, theft, vandalism, fire, and other perils that may occur on land or water.
What does marina insurance cover?
Marina owners and operators face some common risks.
- Buildings, docks, piers, equipment, tools, and inventory suffer property damage.
- The marina’s operations or employees cause liability for bodily injury or property damage to third parties.
- Customers or guests are liable for damage to boats or personal property.
- The marina is liable for any pollution or environmental harm resulting from its operations or spills.
- Business interruptions or natural disasters can cause a loss of income or extra expenses.
Key Components of a Comprehensive Marina Insurance Program
Marina businesses safeguard their interests by building a well-structured marina insurance program on a foundation of various insurance coverages, each serving a specific purpose. A comprehensive program comprises the following primary components:
General Liability
Any insurance program relies on general liability insurance as its cornerstone. The marina is provided coverage for legal expenses, out-of-court settlements, and awards for damages in the event that it is sued for personal injury, property damage, false advertising, or libel and slander. Protecting the financial well-being and reputation of the marina is crucial, so this coverage is necessary.
Marina Operators Legal Liability
Marina Operators Legal Liability Coverage protects marina owners and operators from liability claims that arise from damaging customers’ boats or other property while they are in the marina’s care, custody, and control. Mitigating the financial consequences of accidents or mishandling of vessels within the marina is essential.
Protection and Indemnity
P&I insurance, commonly known as protection and indemnity insurance, provides coverage for the marina’s operations causing bodily injury, illness, loss of life, or damage to third-party property and covers legal liability. Marinas involved in boat rentals, repairs, and other high-liability activities find it particularly relevant.
Workers Compensation
Marina employees rely on workers compensation insurance to receive financial support in case of work-related injuries or illnesses. The marina ensures that employees receive proper medical care and compensation for lost wages, reducing legal and financial liabilities.
Umbershoot (Excess) Policy
An excess policy, also known as a bumbershoot, extends the limits of primary insurance policies and serves as umbrella coverage. An additional layer of protection is provided, which is especially useful for catastrophic events or claims that exceed the limits of standard coverage.
Considerations for Property Coverage
Marinas also need to address property-related risks, while liability coverage is paramount. The marina’s specific needs can determine the variation in property coverage, but they often include:
- Building coverage
- Tools and equipment are used.
- docks and piers.
- Additional coverages.
Marinas should also consider supplemental coverage, such as:
- Cyber liability protects against cyberattacks and data breaches.
- Legal expense coverage is provided for employment-related disputes.
- Compensation for ongoing costs following a loss that disrupts operations includes loss of business income and extra expenses.
Marina Insurance Companies in the USA
Marina insurance covers the loss or damage of ships, cargo, terminals, and any transport or cargo that transfers, acquires, or holds property between the points of origin and final destination. There are two main categories of marine insurance: ocean marine and inland marine. Ocean marine insurance provides coverage for vessels and cargo in transit by sea, as well as the legal liability that arises from maritime activities, in order to protect against the risks of loss or damage. Inland marine insurance protects against the risks of losing or damaging property during transportation by land or air, or while storing or using it at a fixed location.
In the USA, many companies offer marine insurance, but the largest and most reputable ones are:
GEICO Marina insurance
GEICO offers boat insurance coverage for various types of watercraft in the USA. They are one of the leading providers, covering pontoons, personal watercraft (PWCs), fishing and bass boats, powerboats, and sailboats. GEICO also provides discounts for boating safety courses, multiple policies, and more.
Maritime Insurance International Marina insurance
Maritime Insurance International provides insurance for over 150 marine facilities across the United States, with access to all major markets.
John B. Wright Insurance Marina insurance
John B. Wright Insurance provides insurance for marinas in New Jersey and New York, tailoring policies to meet the unique needs of each marina.
Chubb Marina insurance
Chubb is a global insurance company with over 200 years of experience in marine insurance. It provides ocean and inland marine insurance solutions for shippers, manufacturers, vessel owners and builders, and marine facility owners. Chubb also helps clients navigate the complex maritime industry by providing risk management services and marine insights.
Liberty Mutual Marina insurance
Liberty Mutual offers both ocean and inland marine insurance products. It provides coverage for a wide range of marine exposures, including cargo, hull, liability, builders risk, fine art, renewable energy equipment, and more. Liberty Mutual’s network of marine specialists and claims adjusters provides expert service.
Travellers:
Travellers: One of the oldest and largest providers of ocean and inland marine insurance in the USA is Travelers. It cover various segments of the marine industry, including commercial fishing, recreational boating, yacht clubs and marinas, ocean cargo, inland transit, construction and installation, and more. Travellers also provides customised solutions and risk control resources to meet each client’s specific needs.
How much does marina insurance cost?
The type of coverage, policy limits, deductibles, and the insurance company are some of the variables that might affect the price of marina insurance. Here are some examples that show the cost of different types of marine insurance:
General liability insurance for a marina can range in cost from $50 per month ($600 per year) with a deductible of $0 to $500.
Marinas can expect to pay around $53 per month ($636 per year) for professional liability insurance, with a deductible ranging from $500 to $1,000.
The cost of commercial property insurance for a marina may be approximately $71 per month ($852 per year), with a deductible ranging from $1,000 to $2,000.
A marina might pay about $100 per month ($1,200 per year) for a business owner’s policy (BOP) with a deductible of $1,500.
Tools and equipment insurance for a marina can cost around $56 per month ($672 per year), with a deductible ranging from $500 to $1,000.
A marina may pay approximately $62 per month ($744 per year) for commercial auto insurance with a deductible ranging from $500 to $1,000.
Marinas typically pay around $105 per month ($1,260 per year) for workers compensation insurance, with a deductible ranging from $2,500 to $5,000.
Marina Insurance Benefits
Marina insurance safeguards the longevity and prosperity of your marina business, rather than being merely a financial precaution.
Financial resilience.
Marina insurance provides a financial safety net that safeguards your business from unforeseen and potentially catastrophic events. Your marina’s financial stability could be threatened if you don’t have adequate insurance coverage to repair or replace assets, cover legal expenses, or compensate for income loss.
Asset protection
You likely have a substantial investment in assets at your marina, including docks, piers, buildings, boats, and equipment. Marina insurance protects these valuable assets from risks like fires, natural disasters, vandalism, and theft. This protection ensures that your investments remain intact and minimises disruptions to your operations.
Reduce liability.
Marina operations have inherent liability risks, including accidents on your premises and legal disputes with third parties. Marina insurance, especially general liability and pollution liability coverage, buffers against potentially substantial legal and settlement costs. You can address liabilities without depleting your financial resources.
Business continuity
Your marina relies on business interruption insurance as a lifeline in the event of a covered loss. It compensates for lost income during temporary closures, ensuring that you can continue to meet financial obligations, pay employees, and maintain your business until you fully restore operations.
Comply with regulations.
Marina insurance ensures that you stay in compliance with regulatory requirements, which the marine industry often mandates. Not meeting these regulations could lead to fines, legal troubles, and reputational damage. By maintaining appropriate insurance coverage, you demonstrate a commitment to responsible and compliant business practices.
Long-term sustainability
Many marina owners consider the investment in a marina a long-term commitment. Ensuring the long-term sustainability of your business requires marina insurance as an essential tool. It enables you to weather unforeseen challenges and continue serving your community and
Final thoughts.
In conclusion, marina businesses in the USA rely on marina insurance as a critical component for their success and sustainability, as it serves as a financial safeguard. It provides financial resilience, protects assets, mitigates liability, and brings peace of mind. In navigating the unique risks of this industry, it is essential to choose the right insurance partner. Marina insurance guarantees that marina owners and operators can continue providing their services and enjoying the lifestyle and business opportunities that this unique blend offers for years to come.
