The boating industry has boomed during the pandemic, creating opportunities — and also increasing risks — for those who own, operate, sell or repair watercrafts. To learn more about Recreational Marine Insurance, we spoke with Matt Bryant, Broker, Marine, Burns & Wilcox, Orlando, Florida.
What are the greatest risks related to Recreational Marine today?
M.B.: The term “Recreational Marine” applies to a variety of risks including marinas, boats and yachts, boat dealerships, charter boats, and boat rental operations. The most obvious risks include sinking, damage from hurricanes, and collisions. However, I think the greatest risk may be having insurance policies that are put together incorrectly. The less common exposures are often discovered when it is too late because a claim has already occurred. A poorly worded policy form can cause much more headache than one might think.
What should companies be aware of relative to these risks?
M.B.: Maritime law differs from other state and federal laws and imposes unique liabilities on business owners and employers. It is a whole different set of language and codes. They need to make sure they have the right insurance policies; the typical General Liability form would be inappropriate.
What types of insurance policies can help them respond to these threats?
M.B.: Marina Operators Legal Liability Insurance is for when you have care, custody, and control of other individuals’ boats; this covers your legal liability in the event of a fire at the marina, for example, or if a boat sinks while it was left in your care. Ship Repairers’ Legal Liability Insurance can cover damage that occurs to a boat you are working on. Protection and Indemnity (P&I) Insurance is the liability for a boat when it is in the water; for example, if it runs aground and causes damage or catches fire and the fire spreads to another boat. Maritime Employers’ Liability Insurance, or Crew Coverage, is basically Workers’ Compensation coverage for employees that are in-service of the vessel or its intended mission (e.g., repairing a bridge).
How has COVID-19 affected the Recreational Marine industry?
M.B.: The boating industry has exploded during COVID-19. Boatbuilders cannot build boats fast enough, marinas are full, and boat dealerships are selling quickly. Individuals are looking for things to do, and it is hard to get much more socially distant than being out on a boat.
What steps should companies take that complement insurance coverage from a prevention standpoint?
M.B.: I view insurance as one part of an overall risk management program. For starters, you can keep the boat out of certain areas at certain times of the year. Some folks will take their boat out of Florida during hurricane season, for example. You should also communicate your plans to an underwriter, who has read hurricane plans and has seen the results after a hurricane hits, so they have unique insight into what works and what does not. It is also a good idea to have a maritime attorney look at the language used in their contracts.
Can you share an example of a scenario you’ve dealt with that would be illustrative of the types of risks we’ve been discussing?
M.B.: We had an upper Midwest boat dealership that was written on the same kind of insurance policy that you would use for a car dealership. When you take a boat and put it in the water for a sea trial, you have a whole different set of laws. The risk changes fundamentally — if something goes sideways, you do not have the coverage in place for what you need. We were able to uncover several important gaps in coverage. The possibility of having completely inappropriate coverage is very real.
What are the greatest opportunities for brokers to get into Recreational Marine Insurance, and how can they increase their success rates?
M.B.: We are in an ideal situation right now because the insurance industry is in a hard market; rates are up, and we also see the Recreational Marine industry booming. With Recreational Marine Insurance being different from other lines of coverage, a lot of brokers are just scared of it because of the terminology. That makes brokers nervous about getting involved and there is less competition. Brokers should have general knowledge of the terminology and take advantage of training opportunities — you are looking for a sophisticated buyer who appreciates a consultative seller.
What features of Recreational Marine Insurance are specific to Burns & Wilcox?
M.B.: Agents who work with Burns & Wilcox have exclusive access to the Burns & Wilcox PowerSports Service Center. This phone-based resource is a convenient way to provide agents with a solution to servicing their customers’ specialty personal insurance needs for small recreational boats, guides, and similar risks. To quote and bind policies in three easy steps, call 855-480-9763 or email firstname.lastname@example.org.
For larger, more complex risks, agents have access to our team of experts who specialize in Recreational Marine Insurance. To learn more about Recreational Marine, and the wide variety of insurance products offered for businesses and individuals in this space, click here.
RECREATIONAL MARINE INSURANCE
WHY YOUR CLIENTS MIGHT NEED IT: Maritime law imposes unique liabilities on business owners and employers, and anyone who owns, operates, sells, or repairs watercrafts is at risk for injuries or environmental forces.
PROTECTS AGAINST: Sinking, damage from hurricanes or fires, collisions, crew injuries, and less common exposures that an experienced broker can help identify for a policy.
EXPERT OPINION: “We are in a really ideal situation right now because the insurance industry is in a hard market; rates are up, and we also see the Recreational Marine industry booming,” said Matt Bryant, Broker, Marine, Burns & Wilcox, Orlando, Florida
Interview conducted in May 2021. An H.W. Kaufman Group and Burns & Wilcox publication.