hey, lets pay for our marina's insurance

I got a curious letter from my marina here in Virginia. They want me to list the marina as "additionally insured" on my boat's insurance form. My initial reaction to this was to wonder why I should be paying for my marina's insurance coverage. But, maybe I'm missing the bigger picture. Any thoughts as to why this may be a perfectly reasonable request?

This question is coming up in a lot of marine/boat sites now. Our Port District is not asking us to do that yet.

According to a Marine Insurance friend of mine, if something happens in the marina involving your boat, it allows the Marina to talk directly with your insurance company when dealing with the damage recovery and mitigation.

Is this a good thing, I'm not so sure. Of course my attorney thinks it's hog wash, but that's just his view on it.

Maybe some of the insurance salesmen on the forum have a different perspective????

My experience is with another kind of insurance, but here are my thoughts. My marina requires it. When they are named additionally insured if you drop coverage they are notified of termination along with you. If they have a certificate of insurance, they may or may not be notified if you drop coverage. My insurance carrier wanted to see the lease to make certain it was a requirement before sending.

it was a requirement at several of the marinas we looked at. good or bad it is common.

Moonstruck said:

My experience is with another kind of insurance, but here are my thoughts. My marina requires it. When they are named additionally insured if you drop coverage they are notified of termination along with you. If they have a certificate of insurance, they may or may not be notified if you drop coverage. My insurance carrier wanted to see the lease to make certain it was a requirement before sending.

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This is absolutely correct. The marina cannot make any changes to your policy, and your information other than whether your coverage is in place is not shared with the marina.

It's not a big thing, and is a no-cost endorsement to your policy.

Thanks Pete, Not an issue here in Alaska public mooring. It did raise an eyebrow with SeattleBoatguy's introduction to it. As I am a near destitute living on the interest of the money I owe, attorney cost to have the questions answered was once again a value of being on this forum.
It is fully understand that taking "Free" advise is worth just that, even so I distribute religion, medical, and strong personal opinions with wild abandon!!
Al

Is it like noting the interest of the secured mortgagee/lender on real estate? Usually they can keep the policy current if you don`t, and can add the premium they pay (which you did not) to what you owe. Perhaps your agreement with the Marina gives it a right to recover premium from you.

My understanding is that if your boat causes damage at the marina - say it catches fire and burns your boat plus a marina building - that the marina can place a claim against your insurance for the damage caused by your boat. If they were not an "additionally insured" party, they could only come after you. Being a named insured party lets them bypass you and file a claim directly with your insurance carrier.

Oh, insurance gurus, it that at least partially correct?

It's a cost-reduction thing for the marina, lowers their insurance premiums a little by spreading some of the coverage costs to the boat owners for some damage and liability scenarios.

This has been a requirement at our marina on Lake Superior for as long as I can remember, which, except for the 4 years we were gone cruising, has been over 25 years.

Twistedtree is correct. Usually your insurance company will word it something like: "Marina is named as an additional insured but only to the extent of damages caused by the insured".

So you are not really taking on some of the marina's insurance. You are just making it easier for them to collect from your insurance company for damages that you cause them. It takes you out of the loop.

David

Sorry to disagree, but of course you're taking on some of the marina's insurance coverage costs, even though it may be a small fraction individually. The marina can file a claim against you - and therefore by extension, your insurance company - whether they're named on your policy or not. I think a lot of people misunderstand how insurance claims are filed and against whom. And whether that's been a habit at marinas for years doesn't really matter.

Maybe it would be easiest to illustrate this with an example in a different context - imagine if I required you to add me to your car insurance policy, just in case you hit my car at an intersection someday. Do you really think your insurance company would do that for free?

We do the same thing at our yacht club marina and all boats must show proof on insurance annually.

kthoennes:

I understand what you are saying, but the example of car insurance just doesn't hold up.

When you dock your boat at a marina there is one marina and your boat in the equation. With a car there is your car and millions of potential other cars you could hit.

Insurance claims can be messy. Naming the marina as an additional insured means the marina doesn't have to make a claim, probably with lawyer fees to collect from you when your boat catches fire and damages the marina. And if your boat damages another boat, the owner of the other boat will make a claim against you and the marina. This way the marina just calls your insurance company who is obligated to defend you and the marina. Otherwise the marina has to get their insurance company to defend them and make a counter claim against you (and your insurance company) adding to everyone's legal costs.

It works when you are clearly at fault and the marina is either in the middle (in the case where another boat was damaged by you) or the marina was damaged themselves by your boat due to no fault of theirs. I'll bet these cases represent the great majority of claims.

I am mildly sympathetic to the marina's situation where I'll bet 90% of the property damage claims start with a boat and are not the marina's fault. But if someone else's boat is damaged by yours in a marina, the marina is sure to be in the middle of the claims/litigation process.

So it is actually a way to cut through lawyering and solve the problem which is what we all want. Your insurance company is going to pay the claim sooner or later and letting the marina go directly to your insurance company and ask them to pay (or defend them) makes it work easier.

In the construction industry it has been common practice for 20 years for the contractor to name the customer as an additional insured on his policy and everyone is comfortable with it.

David

Well, I don't think we disagree on very much there, I was mostly trying to make the point that what the marinas are doing in this scenario is not just a simple matter of legal convenience at no additional cost to boat owners. I'm sure the marina's insurance carrier just loves spreading some liability more easily to the boat owners. On the other hand I'm kind of surprised the boat owners' carriers agree to it, especially because it seems to me that the boat owners' and the marina's legal interests are often dissimilar or even in conflict (although of course insurance companies deal with that scenario from time to time, like when two Allstate customers smack each other on the road).

The marinas around here don't have any such requirement. If I ran any kind of business, from amusement parks to restaurants to a supermarket where customers could drop a grape and slip and fall, wouldn't it be great if I could require everybody who came through the doors to pay for some of my business insurance coverage. What a great concept if you're the marina or the marina's insurance company.

Ancora, there is a difference in adding the marina to you policy and a marina requiring you to provide proof of your own coverage. We have to provide proof, always have and I have no problem with that. However, if I were asked to add the marina to my policy, I would instantly ask them to add me to theirs. As mentioned above, I agree that most marina damage is caused by boats, but what about boat damage by the marina? Do I get the same protection? Shouldn't I get notified if the marina's insurance lapses?

If you are in the marina business and don't charge enough to recoup your costs, you need to rethink you business plan. This includes legal fees and raising the prices when your premiums go up.

I thought marinas were interested in your boat's insurance policy in case you caused damage there. ... By the way, my boat's insurance costs did not change after "signing on" the marina to my policy.

ancora said:

We do the same thing at our yacht club marina and all boats must show proof on insurance annually.

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Proof of insurance is not a guarantee of continuous coverage. Policies may be terminated for many reasons ie: nonpayment of premium, failure to comply with terms of the policy, failing survey, and others. Sometimes it can be a binder that a policy is never issued. Believe me, managing certificates of insurance is a great problem in my business.

Adding the marina on as an Additional Insured is only relating to the liability portion of the insurance so if you are sued for let’s say something like your dog bites the neighbor where the neighbor would sue you and the marina your policy will provide an attorney and cover what you are legally liable to pay, for both you and the marina. As well as requiring the insurance company to notify the marina of any types of cancelation of the policy. Oh the liability is for both bodily injury and property damage!
Gregg

Did any of you read Pete's (Paul Hana) response early in this thread? Adding the marina as an additional insured means they will be notified if you change or cancel your policy! This is important! The marina is making sure everyone has adequate insurance in force. This protects you and your fellow slip-mates.

Yes, I have read the whole thread, but even on that point, I was kind of surprised at that too - I'm pretty sure when you let a policy lapse, or far more likely, when insurance companies change terms or coverage or premiums, they don't notify each and every insured on the policy separately. For example, we have three autos, two trailers, two boats, home, and an umbrella, my wife and I are both named insureds, but I'm the primary or lead account holder and I'm the only one notified of anything. But then maybe this portion of the country is very different than the coasts when it comes to insurance and I should just shut up.

Interesting thread. No proof of insurance required in our municipal marina. In fact no insurance required.

The legal purpose of the "additional insured" status is really pretty simple. If you read your marina slip contract carefully, you will find that you have indemnified the marina against damage and loss caused by you and your boat. This means you have agreed to pay the marina for any and all damage caused by you and your boat. If damage occurs, you would normally contact your insurance company and the marina is dependent on your doing all you should to get your insurer to pay for your damage. Once named as an "additional insured", the marina now has the status of being insured under your policy but only to the extent of the indemnification in your slip contract. As noted in earlier posts, now the marina can deal directly with the insurer regarding any dmages under its indemnification clause.

You might note on your policy that if you have financed your boat, many lenders require additional insured status. The same can apply to mortgage and auto lenders.

All boats kept here at Bradford Marine in Fort Lauderdale in our free dockage for sellers program are required to have Bradford listed as additional insured. It is required at most marinas for long term dockage in Florida. I have never heard of an owner having rates increased because of this. Dockage rates would be higher if the marina owners had to pay more for insurance or to collect insurance proceeds.
The easiest explanation for my clients is to say that the insurance companies for the boat owner and the marina or boat yard owner have to work together instead of against each other.

I understand the concept, but my points are:

1) You would have to trust your marina ownership and management team to always do the right thing. Something I do not trust where we are. Imagine a claim on your policy when there is no loss and you are out of the loop?

2) I will allow them on my policy if they allow me on theirs. Why do I have to give the easy access to make a claim on my policy from damage I cause to them without them allowing me the same courtesy?

I must admit to being confused when I first read the marina requirement to be listed as additionally insured. One phone call to my insurance company put my mind at ease. You can theorize what if scenarios until blue in the face but insurance companies claim its common practice, and like Mark said, it didn't add any cost to me.

Moonstruck and I share a common problem of keeping up with insurance certificates. It sure would simplify things if this became common practice in our industry, but lacking the tenant/landlord relationship present in a marina makes it pretty unlikely.

Northern Spy said:

Interesting thread. No proof of insurance required in our municipal marina. In fact no insurance required.

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Our municipal marina requires proof of insurance for permanent slip tenants, but does not for the transients who are allotted over half of the available slips. A bit strange as the majority of dilapidated, poorly maintained boats I've seen on the Great Lakes are a subset of a certain transient community.

CPseudonym said:

Moonstruck and I share a common problem of keeping up with insurance certificates. It sure would simplify things if this became common practice in our industry, but lacking the tenant/landlord relationship present in a marina makes it pretty unlikely.

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Craig, I sit on both sides of the issue. First insurance is an important requirement in my business. We insure our projects, and it depends on which party is required to supply the insurance who is named additionally insured. We also require our subcontractors to supply evidence of coverage.

On the other hand, I sit on the board of directors of an insurance company that our agents as a matter of course provide evidence of coverage and additionally insured statements. There is an insurance term that usually applies in those cases. It is "as interest may appear". At no time would either party be entitled to anymore than "their interest may appear".

skidgear said:

Our municipal marina requires proof of insurance for permanent slip tenants, but does not for the transients who are allotted over half of the available slips. A bit strange as the majority of dilapidated, poorly maintained boats I've seen on the Great Lakes are a subset of a certain transient community.

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I think that is part of the equation here as well. Logically, how can you force the permanent slip holders to have coverage, without having the transients produce coverage.

That, and (western) Canadians, in general, are not as litigious as...ahem...the citizens of a country in close proximity.






Without Prejudice.

+1 on Robster's post.