Owners of fleets of water vessels, such as marina operators, boat dealers and yacht clubs, as well as boat builders and yacht brokers must all protect their businesses against common risks associated with activities likely to occur in the water as well as on land. Agents and yacht club insurance brokers need to help those facing a unique set of exposures and find coverage options that best help suit their client’s needs.
Yacht clubs, because of the many activities they sponsor throughout the year, rely on the protection they are afforded by carrying yacht club insurance for the vast array of exposures they have concerns over with regularity. Business is heaviest in the summer months and they should all be focusing on these very important coverage options.
Liability is an essential policy to have in place
Liability coverage is perhaps the most important aspect of any yacht club insurance coverage plan. Liability features that are currently available include coverage for legal defense costs, wreckage removal, water and oil pollution and resulting contamination cleanup, and non-owned (i.e. borrowed) boats that could suffer damage while on the premises.
If the yacht club employs a captain or crew, Jones Act coverage will be needed for times when damages or injuries result from a collision or other hazards occurring. Any act deemed to be caused by negligence by the owner or one of their employees could result in a claim and any legal action that is taken can be quite costly.
This should also include purchasing employer’s liability for full-time and part-time staff, freelance instructors and volunteers. For example, insurance will provide coverage in the event someone accidentally trips or slips while boarding or disembarking a vessel or anyone that claims to have suffered an injury of some sort during their visit.
Perhaps the most significant coverage difference between various policies is whether the loss settlement basis is “agreed value” or “actual cash value.” Replacement cost coverage normally pays for damage (less any deductible), and age depreciation is generally not factored in for most losses. Actual cash value coverage for partial losses may reduce the claim payment based upon depreciation, and the policy deductible will apply.
Before your client purchases any policy from yacht club insurance brokers be sure to speak to them about their coverage options and help them choose a policy plan that provides the needed protection.