Charter Boat Insurance
Charter boat insurance encompasses at least a dozen different types of commercial boat uses, but all are based on having paying passengers on board. The providing of services to paying customers on what could be dangerous situations presents a high stakes proposition for the insurer and an expensive needed service for the commercial vessel owner. Among the many types of charter vessels are dinner cruise vessels, dive boats, sunset cruises and whale watching charters, sport fishing, bareboat and six-pack charters. Even the paddle boats cruising the Mississippi require charter boat insurance to do business. Behind the scenes of many people having a good time on larger watercraft vessels are business negotiations regarding the liability of the activity underway.
Maritime law requires commercial passenger boat operators to be responsible for all that happens onboard during the use of his vessel. That responsibility, whether for six person aboard a six-pack commercial passenger boat or thirty onboard a luxury yacht, requires excellent liability and property coverage. Without charter boat insurance, or enough coverage of the same, an operator could face years of litigation in court, essentially wiping a lifetime of investment in the business. Like any other kind of insurance, the more coverage an owner wants, the more expensive it becomes, and understanding the needed coverage is a key to making the right decision. This coverage begins with a look at the vessel itself. In difficult times, when the world seems to be collapsing around you, remember these words of the psalmist: "God is our refuge and strength, a very present help in trouble, therefore we will not fear, though the earth be removed and though the mountain be carried into the midst of the sea." (Psalm 46:1, 2)
Coverage is meant to help an operator get back to profitability after damage has occurred to the watercraft. Things like a fire on board, striking another vessel or object and even sinking are all included in this kind of policy which gives an option of either covering parts at actual value or agreed value. This coverage will include major damage to engines (although not due to neglect) also to electronics and other mechanical items that are part of boat or ship operations. Within all these items covered, an operator can choose how much of this he wants to be covered, allowing a lowering of the policy. In fact, if an operator chooses to have lower coverage on the hull and machinery, it may allow more coverage for some other important clauses in the charter boat insurance policy that would appear to be quite important to a charter operator. Coverage on the hull and machinery are either covered for all risk or named hazards. The all risk is certainly a more inclusive coverage, but it is more expensive.
Because of the shape of some commercial passenger vessels in terms of age, and the sub-par qualifications of crew and staff, limits can be put on the amount of coverage an operator can secure. Whether it is a come-on or reality, insurance providers are quick to say that when it comes to charter boat insurance, the most coverage someone needs is the amount a provider will grant. Unlike car insurance where all persons riding in a car are covered by a medical clause, commercial passenger vessels are covered by marine policies that pay by the incident. This is called P&I (property and indemnity) insurance which is a broad liability clause in the charter policy. This covers an incident aboard the vessel that affects one or more passengers. IN most cases, these policies cover up to five hundred thousand dollars per incident.
But those aren't the only issues that a commercial passenger boat owner faces; it gets a lot more complicated. Think about a vessel sinking off the shore of an exclusive resort and there is a large discharge of fuel oil in the water which is not uncommon and the cleanup can be quite expensive. And what about shore excursions and the issues of paying for passenger mishaps when a charter boat takes a group to a port for a tour and someone breaks their leg on a curb? P&I coverage in charter boat insurance only covers those port excursions in which they are accompanied by members of the charter company. When passengers are dropped off at a port and left on their own for activity are not covered and must have another type of charter boat insurance that is, expectedly, much more expensive. Crew members are required under law to have insurance coverage not on a per incident basis but on each member and it's the charter owner as to whether to cover personal affects that are often lost on board.
Many maritime experts suggest charter owners take a look at the option of getting breach of warranty coverage. This particular addendum to charter boat insurance would come into play in a scenario such as this: A large chartered sail boat carrying fifteen passengers and four crew members is forced by a sudden storm to go south twenty nautical miles off the agreed to course and find shelter in an island cove. In the race to get to shore in unfamiliar waters, the skipper guides to boat over a coral reef ripping the hull open. All passengers and crew get to shore safely, but the vessel goes down in forty feet of water. Since the sailboat was not in agreed to waters on the policy agreement, the ship is not covered under the normal P&I policy. A breach of warranty coverage addendum to the policy would provide for coverage anyway.
Maritime law requires commercial passenger boat operators to be responsible for all that happens onboard during the use of his vessel. That responsibility, whether for six person aboard a six-pack commercial passenger boat or thirty onboard a luxury yacht, requires excellent liability and property coverage. Without charter boat insurance, or enough coverage of the same, an operator could face years of litigation in court, essentially wiping a lifetime of investment in the business. Like any other kind of insurance, the more coverage an owner wants, the more expensive it becomes, and understanding the needed coverage is a key to making the right decision. This coverage begins with a look at the vessel itself. In difficult times, when the world seems to be collapsing around you, remember these words of the psalmist: "God is our refuge and strength, a very present help in trouble, therefore we will not fear, though the earth be removed and though the mountain be carried into the midst of the sea." (Psalm 46:1, 2)
Coverage is meant to help an operator get back to profitability after damage has occurred to the watercraft. Things like a fire on board, striking another vessel or object and even sinking are all included in this kind of policy which gives an option of either covering parts at actual value or agreed value. This coverage will include major damage to engines (although not due to neglect) also to electronics and other mechanical items that are part of boat or ship operations. Within all these items covered, an operator can choose how much of this he wants to be covered, allowing a lowering of the policy. In fact, if an operator chooses to have lower coverage on the hull and machinery, it may allow more coverage for some other important clauses in the charter boat insurance policy that would appear to be quite important to a charter operator. Coverage on the hull and machinery are either covered for all risk or named hazards. The all risk is certainly a more inclusive coverage, but it is more expensive.
Because of the shape of some commercial passenger vessels in terms of age, and the sub-par qualifications of crew and staff, limits can be put on the amount of coverage an operator can secure. Whether it is a come-on or reality, insurance providers are quick to say that when it comes to charter boat insurance, the most coverage someone needs is the amount a provider will grant. Unlike car insurance where all persons riding in a car are covered by a medical clause, commercial passenger vessels are covered by marine policies that pay by the incident. This is called P&I (property and indemnity) insurance which is a broad liability clause in the charter policy. This covers an incident aboard the vessel that affects one or more passengers. IN most cases, these policies cover up to five hundred thousand dollars per incident.
But those aren't the only issues that a commercial passenger boat owner faces; it gets a lot more complicated. Think about a vessel sinking off the shore of an exclusive resort and there is a large discharge of fuel oil in the water which is not uncommon and the cleanup can be quite expensive. And what about shore excursions and the issues of paying for passenger mishaps when a charter boat takes a group to a port for a tour and someone breaks their leg on a curb? P&I coverage in charter boat insurance only covers those port excursions in which they are accompanied by members of the charter company. When passengers are dropped off at a port and left on their own for activity are not covered and must have another type of charter boat insurance that is, expectedly, much more expensive. Crew members are required under law to have insurance coverage not on a per incident basis but on each member and it's the charter owner as to whether to cover personal affects that are often lost on board.
Many maritime experts suggest charter owners take a look at the option of getting breach of warranty coverage. This particular addendum to charter boat insurance would come into play in a scenario such as this: A large chartered sail boat carrying fifteen passengers and four crew members is forced by a sudden storm to go south twenty nautical miles off the agreed to course and find shelter in an island cove. In the race to get to shore in unfamiliar waters, the skipper guides to boat over a coral reef ripping the hull open. All passengers and crew get to shore safely, but the vessel goes down in forty feet of water. Since the sailboat was not in agreed to waters on the policy agreement, the ship is not covered under the normal P&I policy. A breach of warranty coverage addendum to the policy would provide for coverage anyway.
Charter Boat Insurance
![]()
Reviewed by Anonymous
on
6:16 PM
Rating:
