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Old 02-07-2015, 12:47 AM   #1
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Marina insurance question

Hello! I have a question regarding my marina. I just paid for my slip for the upcoming season & got a weird email from the marina telling me I had to include the Marina in my insurance coverage. That seemed strange to me.

The good news is that I didn't sign anything! Last year at the same Marina they didn't have this clause, but is it now a standard practice?

By the way, I responded by asking them for the actual clause they are referring to in the contract. I'm not going to sign anything without reviewing it, but it seems kind of cheesy to me.

Any thoughts about this? I could use advice.

PS once I get the contract, I'll run it by my insurance company, too.

PSS I'm limited as to where I can dock bc I need a covered slip.
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Old 02-07-2015, 12:53 AM   #2
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One more thing.

The Marina said it was a clause to include the Marina as an 'Additional Insured.' That's the term they used.
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Old 02-07-2015, 01:01 AM   #3
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Pretty standard practice in California. Just renewed all my paperwork and listing the marina as additional insured was done too. Tossed me for a loop the first time too but a call to my insurance company explained it well. They didn't bat an eye about it.
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Old 02-07-2015, 01:02 AM   #4
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Standard procedure for CA

Additional insured rider on your policy, no added cost to you, protects the marina if your boat causes damage. Like catching fire and burning another boat. Puts your insurance first in line.
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Old 02-07-2015, 01:12 AM   #5
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Quote:
Originally Posted by Starside View Post
Hello! I have a question regarding my marina. I just paid for my slip for the upcoming season & got a weird email from the marina telling me I had to include the Marina in my insurance coverage. That seemed strange to me.

The good news is that I didn't sign anything! Last year at the same Marina they didn't have this clause, but is it now a standard practice?

By the way, I responded by asking them for the actual clause they are referring to in the contract. I'm not going to sign anything without reviewing it, but it seems kind of cheesy to me.

Any thoughts about this? I could use advice.

PS once I get the contract, I'll run it by my insurance company, too.

PSS I'm limited as to where I can dock bc I need a covered slip.
CP and Scary have hit the nail on its proverbial head. Close to 100% of the marinas here in Puget Sound require this.

Marinas require tenants to have insurance. Too often, the tenant will get a binder of coverage to obtain the slip, then cancel the policy. The marina gets 2 major benefits when an Additional Insured:
  • They are indemnified in the event of a major calamity.
  • They are notified of any major policy changes (pending cancellation, cancellation)

It's a no charge endorsement to you, and a quick paper change for us agents/brokers. Go ahead and get it done.
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Old 02-07-2015, 10:51 AM   #6
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Hmmmm, I work at a law firm & I question the policy. I already have liability insurance which covers damage to the Marina & other boaters.

I think there's something shady here. What if the Marina works on your boat & makes a mistake like adding water to your fuel tank. Are they liable? Or are you? This could also increase our costs!

What if a transient boater clips your slip & damages a piling? Is the Marina liable, or are you?

Do you see? It's a slippery slope & if a claim is ever filed, we lose! Also, marina repair would be very expensive so you'd have to increase your liability amount.

I'm going to review the language closely before I sign. Guess I'm being cautious but I don't think it's fair for a marina to pass on its costs to the customer. My slip is 5400 a year for a 27' boat. I don't appreciate the extra cost just to protect the Marina. I think it's shady & tells the customer they don't appreciate your business.
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Old 02-07-2015, 11:26 AM   #7
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Same thing applies to homeowner insurance if you live in a homeowners association (at least ours). When this first came up I questioned it but when I talked to my insurance company they had no problem with it and said that it was no big deal. No cost increase in premium and no change in my coverage. That it was being done all over. I expect you will find this almost anywhere you go. I know it alarmed me also but seems the insurance companies have no issue with it. I also talked to an attorney and he said the same thing. At that point I went along with it. Now been that way for 7 years and no issues.
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Old 02-07-2015, 12:04 PM   #8
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Starside:

It doesn't work that way.

If a third party causes the accident your insurance will not respond. Only if you damage the marina dock, etc or damage another boater and that boater makes a claim against the you and the marina will your insurance respond.

Without this endorsement, the marina must make a claim against you for the damage you caused and then you have to make a claim and recover from your insurance company. With the additional insured endorsement the marina recovers its losses directly from your insurance company and it takes you out of the middle.

Any damage caused by a third party like clipping a dock is not covered by your insurance and any claim you may have against the marina for faulty work is not covered by your insurance.

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Old 02-07-2015, 12:43 PM   #9
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Originally Posted by Starside View Post
My slip is 5400 a year for a 27' boat. I don't appreciate the extra cost just to protect the Marina.

Veering aside for a minute... that seems pretty pricy compared to marinas up where we are. Certainly compared to our marina. Shorter drive for you, too, assuming you're coming east on US-50.

Not as in the way of Galesville amenites (two restaurants) extra nearby, but not too bad. And in our case, it makes Galesville an luncheon or dinner destination... by boat.

Anyway, you might want to do some shopping around once you've got your conversion squared away.


And now, back to your regularly scheduled conversation...

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Old 02-07-2015, 01:22 PM   #10
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Originally Posted by Starside View Post
Hmmmm, I work at a law firm & I question the policy. I already have liability insurance which covers damage to the Marina & other boaters.

I think there's something shady here. What if the Marina works on your boat & makes a mistake like adding water to your fuel tank. Are they liable? Or are you? This could also increase our costs!

What if a transient boater clips your slip & damages a piling? Is the Marina liable, or are you?

Do you see? It's a slippery slope & if a claim is ever filed, we lose! Also, marina repair would be very expensive so you'd have to increase your liability amount.

I'm going to review the language closely before I sign. Guess I'm being cautious but I don't think it's fair for a marina to pass on its costs to the customer. My slip is 5400 a year for a 27' boat. I don't appreciate the extra cost just to protect the Marina. I think it's shady & tells the customer they don't appreciate your business.
You're putting too much "what if" thought process into a pretty simple thing;

  • I think there's something shady here. What if the Marina works on your boat & makes a mistake like adding water to your fuel tank. Are they liable? Or are you? This could also increase our costs!


If the marina is contracted to work on your boat, their professional liability coverage will cover damages caused by their work.

  • What if a transient boater clips your slip & damages a piling? Is the Marina liable, or are you?


I don't see the relevance of this question. The transient boater is responsible for the damage he causes to your slip and the piling. You would not be involved.

The marina has plenty of insurance coverage for things they are liable for. The marina requiring you, as a boater, to have coverage as part of the moorage agreement is standard practice. As a boater, you are responsible for what you do. Why should the marina pay for damages you cause?

They shouldn't.

There is no added cost to you when a marina (or any entity) is added to your policy as an Additional Insured. There is no pass-thru cost involved- the endorsement is free. Also, liability coverage is very inexpensive- we recommend $300k as a minimum, and to increase that to $500k is usually about $30/year. To increase to $1M from $300k is about $125/year.

Flip your thinking 100%- I'd rather be in a marina where insurance coverage is required and the marina requires to be added as an A/I, because it ensures that there is coverage available should a calamity occur. That tells me, as an insurance professional, that the marina cares about its business and its tenants.

IMO, this is another area where I see boaters do their damnedest to cheap out on coverage, then demand that the insurance company pay if/when they have a claim.
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Old 02-07-2015, 03:36 PM   #11
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You're putting too much "what if" thought process into a pretty simple thing;

  • I think there's something shady here. What if the Marina works on your boat & makes a mistake like adding water to your fuel tank. Are they liable? Or are you? This could also increase our costs!


If the marina is contracted to work on your boat, their professional liability coverage will cover damages caused by their work.

  • What if a transient boater clips your slip & damages a piling? Is the Marina liable, or are you?


I don't see the relevance of this question. The transient boater is responsible for the damage he causes to your slip and the piling. You would not be involved.

The marina has plenty of insurance coverage for things they are liable for. The marina requiring you, as a boater, to have coverage as part of the moorage agreement is standard practice. As a boater, you are responsible for what you do. Why should the marina pay for damages you cause?

They shouldn't.

There is no added cost to you when a marina (or any entity) is added to your policy as an Additional Insured. There is no pass-thru cost involved- the endorsement is free. Also, liability coverage is very inexpensive- we recommend $300k as a minimum, and to increase that to $500k is usually about $30/year. To increase to $1M from $300k is about $125/year.

Flip your thinking 100%- I'd rather be in a marina where insurance coverage is required and the marina requires to be added as an A/I, because it ensures that there is coverage available should a calamity occur. That tells me, as an insurance professional, that the marina cares about its business and its tenants.

IMO, this is another area where I see boaters do their damnedest to cheap out on coverage, then demand that the insurance company pay if/when they have a claim.
Peter is right on target. This is standard for apartment complexes, marinas, malls, shopping centers, and homeowners' associations. Anywhere you rent. Where he says flip your thinking, that might be the biggest point made. It's very much to protect you by having it specified on all renter's policies. I know of a case very recently where an apartment complex required it but didn't enforce it. Someone put a cigarette on a shelf in the storage closet adjacent to the patio. Burned the building badly, leaving it uninhabitable. Apparently having significant problems collecting from tenant's insurance as they were noted as "additional insured." It's a no cost endorsement.

As he says also additional liability is something I'd recommend. It takes so little to cause $100,000 or $300,000 damage in a marina. One million dollar boat lost because of an electrical short on yours. We tend to think in terms of cars and overlook how much higher the values of boats are.

I suggest all look into an umbrella policy to extend above their individual liability policies like this one and auto.

As to marina repair, if it's your fault, you're already responsible. Either your insurer pays or you have to. But rest assured if your boat sticks in gear and you take out a dock, then that falls to your liability insurance and doesn't matter how much insurance they have.
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Old 02-07-2015, 04:03 PM   #12
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Marina insurance question

My marina in Seattle requires proof of liability coverage. The policy has standard language naming the "marina, yacht club, or similar facility where the vessel is kept" as an additional insured. It's not an endorsement or an additional form to complete and doesn't name my home marina specifically, so presumably any marina where I travel is covered.
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Old 02-07-2015, 04:08 PM   #13
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The AI requirement is at marina discretion. Shilsole doesn't require it, but Edmonds does....
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Old 02-07-2015, 04:26 PM   #14
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My marina in Seattle requires proof of liability coverage. The policy has standard language naming the "marina, yacht club, or similar facility where the vessel is kept" as an additional insured. It's not an endorsement or an additional form to complete and doesn't name my home marina specifically, so presumably any marina where I travel is covered.
Sounds like the wording from a Travelers Luxury Yacht of Chubb masterpiece policy. You're automatically covered at any marina as far as the policy is concerned, but the marina may still may want the formal AI language.
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Old 02-07-2015, 07:31 PM   #15
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I think in most situations where someone wants to be an additional insured or a named insured is that they receive notification if you cause the insurance to go away by either not paying for the policy or by actually cancelling the policy.
It is common practice in many business situations to require a sub contractor (for instance) to have liability insurance and to require that the both the company hiring the sub and the general contractor be "named insured" on the policy. That way everyone knows for sure there is insurance.
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Old 02-07-2015, 07:40 PM   #16
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I think in most situations where someone wants to be an additional insured or a named insured is that they receive notification if you cause the insurance to go away by either not paying for the policy or by actually cancelling the policy.
It is common practice in many business situations to require a sub contractor (for instance) to have liability insurance and to require that the both the company hiring the sub and the general contractor be "named insured" on the policy. That way everyone knows for sure there is insurance.
Very good point.
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Old 02-07-2015, 07:54 PM   #17
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Normal here. They ask annually for insurance document as well as annual registration/documentation.
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Old 02-07-2015, 09:26 PM   #18
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I think in most situations where someone wants to be an additional insured or a named insured is that they receive notification if you cause the insurance to go away by either not paying for the policy or by actually cancelling the policy.
It is common practice in many business situations to require a sub contractor (for instance) to have liability insurance and to require that the both the company hiring the sub and the general contractor be "named insured" on the policy. That way everyone knows for sure there is insurance.
Yup.
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Old 02-07-2015, 09:35 PM   #19
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I had it removed from my policy.
If for some reason my boat causes damage to others, the marina gets in line like everyone else.
Having them as an "additional insured" means they're at the front of the line, and quite possibly, in front of you.

I actually asked the marina if I was listed as and "additional insured" on their policy.
Seems only fair, right? You know the answer I got...

If there's a claim against my policy, I'm first. Everyone else lines up behind...
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Old 02-07-2015, 10:52 PM   #20
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I had it removed from my policy.
If for some reason my boat causes damage to others, the marina gets in line like everyone else.
Having them as an "additional insured" means they're at the front of the line, and quite possibly, in front of you.

I actually asked the marina if I was listed as and "additional insured" on their policy.
Seems only fair, right? You know the answer I got...

If there's a claim against my policy, I'm first. Everyone else lines up behind...
Respectfully, I must question and disagree with you.

Question- As the A/I endorsement is not part of the policy until requested by the insured, it is not a big thing to get it removed. Than being said, does your marina require to be named on your policy as an A/I?

If, for some reason, your boat does damage to others, the hierarchy will not be that the marina "gets in line first" due to the A/I endorsement. Rather, depending on the severity of the event, both the injured parties vessels and marina) will generally seek remedy from their own policy to speed up the repair or remedy to the injured parties- then the insurance companies will subrogate against the injuring party's insurance policy.

The above is treated as one claim by the injuring party's carrier.

Secondly, Having the marina on the policy does not boot them to the front of the line- because there is no line. Next, you cannot make a liability claim against yourself, so your statements that "they would be in front of you" and "I'm first" are invalid. Liability coverage is for the damage you can do to others, not yourself. If your vessel is damaged but repairable, the Part A hull coverage would cover the repair of your vessel.

There is no reason for you to be an additional insured on a marina's policy. We (as recreational boaters) don't have the exposures that a marina does, (commercial general liability, maritime general liability, SRLL if the marina engages in repair operations, etc. I'm sure you could push it as a matter of principle, but i's be ego talking and not much more.

If there's a claim agains your policy, the type of claim will determine who is paid. Once you file the claim, your duties are done, and the insurance company is in the driver's seat with regards to the disposition of the claim. Same if another party file a claim against your policy- the insuring company has the legal obligation to act as your legal representative in the adjudication of the claim.
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