Boat Marina Liability
A Marina Hot Potato?By Caroline Ajootian
Published: February/March 2012
If you assume that the marina will pay for the damages, you may be in for a shock.
Consider these scenarios ...
- The mechanic who works at your marina test drives your boat following engine repairs. Something goes wrong, he loses control, and the boat causes — and sustains — considerable damage when it bounces off another vessel and hits a dock.
- Partygoers on another boat wreak havoc at your marina, vandalizing several vessels, including yours. The marina's security guard failed to stop the mayhem.
- The dockhand your marina hired for the summer fills your boat's gas tank with water — and vice versa.
More and more, marina contracts include phrases such as, "The boat owner fully agrees and releases the marina from any liability for loss or damage to the boat, under any circumstance, including any negligent acts or omissions by the marina or its personnel." Besides shielding marinas and their insurers from having to dig deep to pay settlements for losses and damages, marinas can save considerable dollars by having customers sign "hold-harmless" clauses in rental agreements. These policies often have large deductibles and the premiums are going up every year.
The sluggish economy has put a sharper focus on the bottom line and businesses are understandably trying to keep costs down, but it's often at the expense of consumers, their customers. Consumers who agree to hold-harmless clauses can find themselves between a rock and a hard place: a marina absolved of responsibility on one hand and their own insurance company that refuses to pay out claims on the other, because these clauses are often in conflict with the boat owner's insurance policy.
With less protection from the marinas, can boat owners expect slip fees to go down? No. Marina customers find themselves in basically the same position as airline customers: The peanut packets are smaller and there's a lot less leg room, but ticket prices and baggage-handling costs are higher.
In addition, "marinas are increasingly asking to be added to the individual boat owner's policy as an additional insured," explains Carroll Robertson, senior vice president of BoatUS Marine Insurance Claims. Besides reducing the cost of the marina's insurance, claims paid due to the marina's negligence become part of the boat owner's claims history, not the marina's, and can potentially drive up the consumer's insurance premiums.
"Some of the 'additional insured' requirements are pretty broad," Robertson said. "Just last week, we spoke with two BoatUS insured members, one in California and the other in Florida, whose marinas had an incredible list of requirements and waivers in their slip agreements."
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The Take-Home Message
- Read and understand all slip and boat storage agreements thoroughly before signing. Ignorance of the contract is not a defense against unfair practices.
- Review contract terms with the marine insurance company that covers your boat. It may be possible to renegotiate terms that are more in your favor.
- BoatUS policyholders who are asked to sign such a contract should call the BoatUS Underwriting Department, 800-283-2883, to review this material.