Liability insurance for boat haulout and storage

[SailsWithFists]

Originally Posted by Dave Lochner

Yes, you can sort of protect yourself by using an LLC to own the boat. But you, as the operator of the boat can not escape liability. If you think that an insurance company is not going to go after any assets you have and crush you with legal fees, then you are quite naive.

We each make our own choices and live with the consequences. It is a free world and l live free to choose. I will not be guilt-tripped into doing something just because you and others do not like it. That being said, I cannot disagree with the rest of your post, except for what is referenced above.

And though it has almost nothing to do with the OP, it is critical that everyone realizes how rich people stay rich.

First, you cannot file a civil lawsuit if you cannot serve the suit, boaters being one of the most difficult to serve. Even in those jurisdictions where you can sue and get a judgement, you cannot collect what a person does not have. One can either be poor (no assets to collect), or rich and protected. The rich and protected hide their assets in multiple LLCs and Trusts (each asset protected by an individual LLC or Trust), usually formed offshore in countries that are difficult to file suit and more difficult to secure a judgement.

Naive is defined as: showing a lack of experience, wisdom, or judgment

Maybe I am naive for not carrying insurance, but I am not naive when it comes to the protection of assets. Ask your lawyer if he would pursue a lawsuit of a boat operator with no known assets operating a vessel registered to a corporation in Nevis, then tell me which of us is naive when it comes to law and lawyer's fees.

My point still stands. It is unwise to live in this world with the belief that you can sue anytime your asset gets damaged by someone else and actually achieve something. Only Westerner's continue to think this way. I have had my boats, cars, homes, and person damaged by others, and have never received a penny in compensation, ever! And not one of those people were protected the way I described above.

Most people in the world, especially boaters do not have any insurance. It is just a fact.

[meridian28]

I guess some people don’t feel they have any responsibility to their fellow man.

[SailsWithFists]

Originally Posted by meridian28

I guess some people don’t feel they have any responsibility to their fellow man.

I practice sound seamanship. THAT is my responsibility.

But no, I do not feel I am responsible for my fellow man. Otherwise maybe someone feels it is your responsibility to pay their mortgage; you know, since we are into feeling matters in our lives are always the responsibility of someone else.

[GRIT]

sailswithfists.

[Dave Lochner]

[QUOTE=SailsWithFists;2534777]We each make our own choices and live with the consequences. It is a free world and l live free to choose. I will not be guilt-tripped into doing something just because you and others do not like it. /QUOTE]

The issue is not about living with the consequences of your own actions, the issue is having others suffer the consequences of your actions.

In cases where the consequences of one's action cause another's injury litigation is and should be an action of last resort. The responsible action is for the one who caused injury to make the injured whole to the best of their ability.

To take a position that is essentially "too bad, so sad" when it comes to the consequences to others of one's action is simply morally reprehensible.

The simplest and easiest way to protect others from the consequences of one's own actions is to carry liability insurance.

It is convenient to believe that one is free to make choices without consideration of the effects of those choices beyond one's own life. The reality is that there is little that we do that does not have intended and unintended consequences to others. To be relevant to this thread, choosing to be uninsured for liability may save money and you may be willing suffer the consequences to you, but everyone who carries uninsured boater insurance is paying the cost. We are paying for your freedom to choose. We are paying for the actions of irresponsible boaters.

When one goes to great lengths to protect their assets and then fails to carry liability insurance it sends a message to others, one that is certainly not complimentary.

When one goes to great lengths to protect their assets and not carry liability insurance, the question that demands an answer is, "How willing is that person to fully accept the consequences of their actions?" The answer, I believe, is not very willing.

[hellosailor]

Actually, the common advice to use an LLC to protect assets is about as good as the old advice to have your income sent directly to some offshore bank, and only spend it via an offshore credit card from the same bank.

In the US, our IRS put an end to that and collected quite a bit of money when they put an end to that scheme.

Similarly, the IRS (the tax courts) and other state and federal courts have rules consistently that an LLC which has no legitimate business purpose, and exists only to hold and "hide" assets, is what they call a "sham corporation" and they literally throw it out and let the usual 100% sole owner be forced to tale on full liability.

If the LLC happened to employ a marketing agent and manage the charter operations of a vessel, great. That would be a legitimate business. If the LLC just existed to create a layer of firewall? "Tell it to the judge."

And of course, even if someone thinks they are judgment-proof, those judgments routinely last 10 years with another 10 year extension. And your retirement funds, pension, and other "safe" assets? Uh-uh, not in many jurisdictions. You've got be be a pro to play those games and win.

[SailsWithFists]

Originally Posted by Dave Lochner

.

You are still trying to pound sense into a world that is not willing to accept your view of how things should be.

Whenever your boat gets damaged by a Malaysian fisherman with his wooden boat and open fire galley, or a Haitian sailor in his engineless wooden vessel with discarded billboard signs for sails and a cargo of old mattresses, please let me know how it all works out for you.

Please regurgitate your wisdom upon them of the virtues of carrying liability insurance, and how much better you will feel about them having been considerate of the rich Americans. And let them become aware of the adversity you feel about their inconsiderate choices, and how you and other rich Americans "have" to pay for uninsured boater insurance so you can feel safe from them. And also be sure to advise them that rich Americans are paying for their freedom to not carry liability insurance.

It is not a safe world out there, and the majority of the world does not give one damn about your personal insecurities. You carry insurance because you want to feel safe, protected, and secure. I don't blame you. It is what you need to walk out the door. Some people also need a GPS to leave the dock to feel safe and comfortable. That's them and their needs, you and your needs. Yours and their personal problems. Not mine or those of anyone else. I know you probably do not like that, but that is the way of the world. I accept it. Others? Not so much.

[Mike OReilly]

This discussion seems to come up every few months here. Mention the idea of NOT carrying insurance and soon the moralizers come out to browbeat anyone who dares to think differently.

Insurance is a response to a risk assessment. There are many ways to mitigate the risks involved in sailing and cruising. Insurance is one way, but there are many other methods. In many (most?) cases, insurance is NOT the best way, but it is certainly a good choice in some situations.

So by all means, make the risk/mitigation/cost argument if you like. But please try and hold off on the moralizing. Paying someone to take over your risk does not make you a morally upstanding person. The reverse is also true.

[Dave Lochner]

Originally Posted by Mike OReilly

This discussion seems to come up every few months here. Mention the idea of NOT carrying insurance and soon the moralizers come out to browbeat anyone who dares to think differently.

Insurance is a response to a risk assessment. There are many ways to mitigate the risks involved in sailing and cruising. Insurance is one way, but there are many other methods. In many (most?) cases, insurance is NOT the best way, but it is certainly a good choice in some situations.

So by all means, make the risk/mitigation/cost argument if you like. But please try and hold off on the moralizing. Paying someone to take over your risk does not make you a morally upstanding person. The reverse is also true.

Insurance does not mitigate risk to your own boat or other boats, it mitigates risk to your assets.

Sail a boat without hull insurance, your assets alone are at risk if the boat is damaged or lost.

Sail a boat without liability insurance or the wherewithal to pay for any damage and you place my assets at risk if you should damage my boat.

Call that a moral argument if you wish, I see it as a distinction between being responsible for one's actions and being irresponsible.

Sailing a boat without hull insurance may be foolish, sailing a boat without ability to pay for any damage the boat may cause is irresponsible.

[Mike OReilly]

Originally Posted by Dave Lochner

...Sail a boat without liability insurance or the wherewithal to pay for any damage and you place my assets at risk if you should damage my boat.

Call that a moral argument if you wish, I see it as a distinction between being responsible for one's actions and being irresponsible.

Sailing a boat without hull insurance may be foolish, sailing a boat without ability to pay for any damage the boat may cause is irresponsible.

So, what is your liability limit Dave? Most people carry one to five million. So by your reasoning you are an irresponsible person if you cause more damage than your insurance limit. Liability insurance doesn’t give you the ability to pay for ANY damage. It simply moves the financial bar up a pre-determined amount.

Unless you have infinite resources, the cost of insurance comes from a limited financial pool. Life is about risk, and mitigation choices are made based on a cost-benefit. In some cases the best choice is insurance. In other cases it is not. Just like with all things in cruising, and in life, there is no one-right-answer-for-all.

I could just as easily claim anyone without X-anchor system or Y-electrinic doodad or Z-type of boat is behaving irresponsibly. These are all things that have likely higher impact on the risk others face compared to whether someone carries liability insurance.

If you deem the risk YOU face due to uninsured boats is high, then it is up to you to mitigate this risk. Others will make their own choices. Doesn’t make them irresponsible or immoral.

[Bill Seal]

So if my anchor drags and my boat causes damage to your boat it's YOUR fault for not having uninsured coverage.

[Dave Lochner]

Originally Posted by Mike OReilly

So, what is your liability limit Dave? Most people carry one to five million. So by your reasoning you are an irresponsible person if you cause more damage than your insurance limit. Liability insurance doesn’t give you the ability to pay for ANY damage. It simply moves the financial bar up a pre-determined amount.

Unless you have infinite resources, the cost of insurance comes from a limited financial pool. Life is about risk, and mitigation choices are made based on a cost-benefit. In some cases the best choice is insurance. In other cases it is not. Just like with all things in cruising, and in life, there is no one-right-answer-for-all.

I could just as easily claim anyone without X-anchor system or Y-electrinic doodad or Z-type of boat is behaving irresponsibly. These are all things that have likely higher impact on the risk others face compared to whether someone carries liability insurance.

If you deem the risk YOU face due to uninsured boats is high, then it is up to you to mitigate this risk. Others will make their own choices. Doesn’t make them irresponsible or immoral.

Mike,

The premise I start with is that if someone causes injury to another, then it is their obligation to make the person whole or as close to whole as is possible and reasonable. If I should hurt your feelings, then I have an obligation to apologize. If I should visit your home and knock a lamp over and break it, I have an obligation to at least offer to replace or repair it. When we do wrong, we try to make it right whether it was intentional or accidental.

This premise is at the foundation of the social contract we have with the societies in which we live and visit. This is what our mothers taught us, make a mess, clean it up. It is what Colin Powell said at the beginning of the 2nd Gulf War, "you break it, you own it."

If nothing else, carrying liability insurance makes a statement about a person's commitment to this basic premise. "If I injure you or your boat, I will do my best to make you whole again."

Now there may well be sailors who do not have liability insurance and are able and willing to follow this basic social tenet our mothers taught us. None of us are able to know this with much certainty.

Then there are those who advocate hiding assets in offshore shell companies and banks. Holding other assets in multiple states under different corporate shells ostensibly to protect their assets while not carrying liability insurance. This seems to be a person of a very different character, the message this person appears to be sending is "Too bad, so sad if I injured you. You won't get anything from me." "Tough luck, it sucks to be you." This attitude does not seem to be a sound basis for a civil society.

And that is what I am advocating for, a civil society. Taking responsibility for one's actions and making whole those that have been injured is at the very foundation of a civil society. Carrying liability insurance, even when it is not required, is a statement committing to a civil society.

[Mike OReilly]

Originally Posted by Dave Lochner

Mike,

The premise I start with is that if someone causes injury to another, then it is their obligation to make the person whole or as close to whole as is possible and reasonable. If I should hurt your feelings, then I have an obligation to apologize. If I should visit your home and knock a lamp over and break it, I have an obligation to at least offer to replace or repair it. When we do wrong, we try to make it right whether it was intentional or accidental.
...

And that is what I am advocating for, a civil society. Taking responsibility for one's actions and making whole those that have been injured is at the very foundation of a civil society. Carrying liability insurance, even when it is not required, is a statement committing to a civil society.

I agree. And I have said nothing to contradict this. Accepting our collective responsibility to each other is an essential part of living together. It is in rapid decline in this day of “I got mine jack, so screw you” politics.

Insurance is simply one way to shoulder your social responsibility. In some cases it is the best way, but not in all cases. I’m not arguing against making the choice to carry liability insurance. I’m chafing against your (and others) attempt to make it a moral Black & White. It is not.

Originally Posted by Bill Seal

So if my anchor drags and my boat causes damage to your boat it's YOUR fault for not having uninsured coverage.

The risk of someone dragging onto me is part of my assessment. How I respond to this risk is up to me. I can only control me, I can’t control anyone else (unless you are advocating some sort of state-controlled insurance regime). To mitigate this risk I can buy insurance (including insurance covering those uninsured IF this part of my risk assessment), I can anchor in better places. I can put a bubble around my boat … I can do whatever I think is necessary.

[Dave Lochner]

Originally Posted by Bill Seal

So if my anchor drags and my boat causes damage to your boat it's YOUR fault for not having uninsured coverage.

Close, but not quite. It's my fault because I anchored behind you, should have known better. Of course I have to pay the damages because you don't have insurance or a forwarding address.

[Dave Lochner]

Originally Posted by Mike OReilly

I agree. And I have said nothing to contradict this. Accepting our collective responsibility to each other is an essential part of living together. It is in rapid decline in this day of “I got mine jack, so screw you” politics.

Insurance is simply one way to shoulder your social responsibility. In some cases it is the best way, but not in all cases. I’m not arguing against making the choice to carry liability insurance. I’m chafing against your (and others) attempt to make it a moral Black & White. It is not.

Now there is something unusual, someone accusing me of being Black & White. That's not usually how I'm perceived.

There is always a gray area, sometimes that gray area is broad and wide, sometimes it is narrow. This is an area that I believe is narrow.

I have 2 boats, a Flying Scot and a 36' Sabre. The Scot does not have boat specific hull or liability insurance. When I reviewed this with my Homeowner's insurance company, they said I was covered under my personal liability for any damage I might do and the cost of hull insurance wasn't worth the money. I paid less than a $1K for the boat. On the other hand the Sabre does have hull, liability and uninsured boaters insurance.

One of the factors that contributes to the narrow gray area in this, is the low cost of liability insurance. A couple of years ago I insured a 30ft boat for $20K of hull insurance and $300K of liability for a little over $200 a year. Thats the cost of a case of beer a month (a 12 pack on the other side of the border).

$200 is such a paltry sum when compared to the cost of boating and cruising it is difficult to understand any rational reason to not have liability insurance. When questioned, it seems the only answer that is given is, "It's my choice and I'll live with the consequences." That may be an acceptable answer for hull insurance, but it seems rather groundless for the liability insurance issue.

This answer, when coupled with advice on how to protect assets through off shore accounts and shell corporations seems to run counter to the notion of a civil society.