Liability Insurance

[osirissail]

Originally Posted by S/V Illusion

The concept of mandatory insurance in many states for automobile insurance is a good metaphor - just because someone has no significant assets or drives a cheap car is no excuse for the often monumental expense he may cause because of an accident or negligence.

That is a good social responsibility concept that I don't feel anybody will argue with. However, in real life, mandatory insurance laws don't work as the minimum coverage required is usually in the $10K/$15K range (so that poor people can afford it). Where can you get a replacement vehicle or more than a single day in a hospital for that amount of money? That is why we pay high rates for "uninsured motorist" coverage in our own policies.

[nautical62]

Originally Posted by osirissail

...- - If your boat does not have a bank loan and/or you do not have significant resources (money and property) that you cannot afford to lose, then insurance is really not necessary.

Liability insurance has nothing to do with the value of your boat or equity you have in it. The liability you can have by causing harm to persons or property other than yourself or your boat can far exceed any equity or cost of repair to your own boat. It can also be extremely helpful to have insurance company representation on your side in dealing with a claim.

Liability insurance if you can get it for your cruising area is usually very affordable.

[Talbot]

Liability insurance is not just for those accidental crunch moments where you got a little close to the Maltese Falcon, and were on Port tack at the time! Or one of your crew went swimming when unauthorised and accidently drowned,

But also for those I have sunk and am creating an oil slick type moments.

[osirissail]

nautical62
- - You are taking sections out of context to my whole post. Inside USA waters or the waters of countries where lawsuits are filed whenever somebody farts is one story and I said that in such places full Insurance or at least Liability Insurance is mandatory if you want services at marinas or boatyards, etc.
- -[By the way, some lady just sued a "dophin show in a water park" because she got splashed and wet.]
- - Outside these countries such types of insurance are nearly mandatory for protecting yourself if you have significant exposure such as a costly boat or personal assets you do not want to lose. For cruisers with paid up and inexpensive boats and no significant personal -unprotected - assets it is highly unlikely anybody is going to sue them as there is nothing to get (e.g. the fishermen or small coastal cargo boats).
- - And the value of your boat and your personal assets are definitely tied to the cost of Liability insurance. Applying for Liability insurance involves all the same surveys and requirements as applying for comprehensive coverage of hull and liability. The only difference is the premium for "Liability Only" is lower than full coverage but appears to be based on boat value and you may also request higher than minimum if your personal exposed assets are higher.
- - Fact of life for insurance - any type - the insurance only pays up to the face value of the policy ** any awards that exceed the face value of the policy come out of your personal pocket **. I had a very high paying career during my working days and was sued frequently as the "other side" saw "deep pockets." I had to carry expensive mega-million dollar liability policies because of another fact of life with insurance - In the USA insurance companies will pay up to $50K to $100K to a litigant just to make them "go away" regardless of the merits of the case. Carrying million dollar plus coverage inspires the insurance company to fight for you as their ass is hanging out there for significant money. Amazing how much service you get for those exposure amounts!
- - But back to the small cruising boat and low budget cruisers - outside the waters of countries I mentioned above - - insurance is totally optional and may not be financially prudent as I clearly said, if you don't have anything to lose, you will not get sued. But if you do have something to lose, then at least Liability should be considered.
- - I cannot argue with the statements about social responsibility to others who have suffered a loss due to your actions. But, your insurance company will assuredly argue against paying anything they do not have to legally pay. They have no such morals.

[Captain Bill]

I would agree with Talbot, the oil slick scenerio is a real possibility for all boaters with an engine. I would suspect that while homeowners and other genral liability policies might cover a lawsuit if someone got hurt or if you damaged another boat, I doubt they would protect you from the cost of cleaning up an oil spill. If you have an engine I would recommend that you look at Marine insurance agencies and make sure you have oil spill coverage. The clean up costs could easily get into 6 figures.

[Rhosyn Mor]

Having just read a blog, the name of which escapes me right now, was a US boat in Latin america where there was an accident in an anchorage/ marina, lots of european boats, one american boat... guess which boat was sued and held until payment was made ? took the owners nearly 5 months of dealing with their insurance company before the boat was released

[anotherT34C]

I'm unconvinced. Has there ever been a confirmed case where a boat owner who was NOT found negligent, had to pay a large (6-figure) settlement out of pocket?

[Captain Bill]

It doesn't matter if you're neglegent or not, the Oil Pollution act of 1990 makes any boater liable for for oil spill cleanup costs regardless of neglegence or not. They can even charge you for the cost of preventing your boat from making an oil spill. Doesn't mater if you never spilled a drop. The oil pollution act of 1990 makes one liable for up to $600 per gross ton or $500,000 which ever is greater. A 100 gallon diesel spill is not likely to cost $500,000, but it really depends on what it contaminates. It seems to me that the insurance companies don't charge a lot for this coverage. By the way I just came across an article from the EPA that declares vegatable oils and animal fat oils as the same as petroleum oils for water polution control purposes.

[TabbyCat]

$500,000

- actually it's up to $800,000 now for oil pollution liability.

Beware of the red herring on the homeowners policy- homeowner's package polices include some limited coverage for theft of the boat (usually only $1,000- clearly intended to cover things like kayaks & canoes) and often the coverage for liability only applies when the vessel is on the owners premises. Once you leave the dock, you may not be covered. State Farm, Progressive & other policies from US auto insurance companies won't cover you for the Caribbean. Read your policy or quote very carefully.

In foreign countries, if you want your vessel hauled, they will want proof of insurance. I speak from personal experience, having just hauled my boat out in Trinidad.

~ Susan

[fishwife]

For vessels entering European waters insurance is mandatory. See Noonsite: European Regulations Regarding Insurance Cover and AIS Equipment for further details. If your vessel is over 15 metres, you also need AIS.

Paige

[osirissail]

As to the "fishwife" posting. Be careful to read the whole post - which by the way has no attribution as to where it came from. The Noonsite post is an interpretation by one individual of the actual EU Directive 2009/17/EC or a press release about it. Also Noonsite does not check the veracity of letters it receives unless they are obviously "way out there."
- - First as to active AIS it solely speaks to commercial Fishing Vessels of 15 meters or more. It does not address Private Recreational Purpose Vessels (us cruisers). So the need for us to get active AIS is not contained in that EU Directive. However, if by some strange and illogical reason some bureaucrat interprets it to include us - - that is not a bad deal as per the below extract from the amendment:
>>Amendment 8
RECITAL 6 A (new)
(6a) Bearing in mind the financial sacrifice that the installation of the AIS systementails for the industry, a separate budget line, independent of the European Fisheries Fund, will need to be created to enable this system to be installed in the existing fishing fleet, with co-funding of at least 90%. <<
In other words we would get the units for almost free to free, now that I would not mind.
- - As to the requirement for insurance in the Directive - the only mention of "insurance" is in regard to hazardous shipping entering a "safe harbor of refuge". The directive allows the member State to ask for proof of insurance but specifically states the the Member State cannot refuse "safe harbor refuge" because of lack of insurance.
- - It is well known that Italy requires cruisers to have liability insurance which is available locally at very reasonable rates. If any cruisers who have actually sailed in the E.U countries know of other places beside Italy, please post your information.
- - As Paul Harvey used to say - "Now for the rest of the story." It is common for us to infer things that are not actually there. The liberal use of "conditionals" such as "might", "may", and "could" in news stories and press releases is so prevalent that the public does not even hear/comprehend them anymore. But they are extremely important words which convert the "promises of politicians" from outright lies to somewhat truthful statements.
- - Bottom line, so far, there have been no changes to the requirements in the EU on these subjects unless the author of the Noonsite letter and anybody else knows of some other newer amendment to EU laws.

[fishwife]

Originally Posted by osirissail

As to the "fishwife" posting. Be careful to read the whole post - which by the way has no attribution as to where it came from. The Noonsite post is an interpretation by one individual of the actual EU Directive 2009/17/EC or a press release about it. Also Noonsite does not check the veracity of letters it receives unless they are obviously "way out there." ........ snip

Thanks for the update on that, I've been out of the EU and just picked up from Noonsite. I can add though, Gibraltar does require at least £500,000 liability insurance to enter a marina, and there are no other alternatives for yachties (anchoring is not allowed).

[fishwife]

Re my last post, I've just checked and now the requirement is for 1 million pounds Gibraltar (par with the UK £) third party liability.

Paige

[Cheechako]

Like they say, "Boating is for the rich", enjoy it while you can, the end of just casting off the lines for a little time on the water is getting closer.

[hellosailor]

Jeff, liability insurance has nothing to do with the value of your boat. It has to do with "How much damage to the world is Jeff likely or able to do?" In a way, it may be more expensive because your boat is older and (in theory) not as well maintained as a new pricey boat.

If your old boat, with old dock lines, breaks free and t-bones a Hinckley then carrooms off a nice old S&S classic...you could easily run up a six-figure damage bill.

If you have any other insurance (car?) you may be able to get the boat added as an additional vehicle, or a rider to your liability policy. But yes, especially at clubs where members have taken previous losses, and marinas that have had previous liability payouts, everyone wants to know that you can and will be able to pay for any damages you make, before they'll let you within cannon-shot of the anchorage.

Do also look to see if you have salvage and recovery coverage. If your boat simply sinks at the dock, or in a channel, you may find that the locals or the USCG have responded, deployed pollution controls, and then removed your hull--and dropped a $25,000 bill on your desk. If you have no insurance, they'll seize your assets. If you have no assets, they'll ask for something like 10% of your income "forever" until everything is paid off.

Insurnace isn't such a bad idea.