Quote:
Originally Posted by TabbyCat
I may be splitting hairs, but it's not about whether your make profit. In fact,there are lots of charter companies in the red that never turn a profit, but they are still chartering. So how do you define a charter? The policy language usually specifically says either if you have "fare paying passengers" or "accept compensation", then you are chartering..... now how to define compensation? I think that's what your friend meant about the red flag. How you market your boat to get your crew could be a determining factor- for example, a boat website that specifically mentions the exchange of money for the privelege of going on the trip would put you solidly on the charter side of the equation.
Better to just go ahead & get the charter endorsement on your policy if there's any doubt.
Anyway, have you tried www.7knots.com? A friend of mine uses them to get crew all the time.
~ Susan
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It may be splitting hairs, but I think the reason it's not well defined is because it's rarely an issue. You said it depends on how compensation is defined and I agree. More specifically, I think it comes down to what you are being compensated for. I think most would agree as the coast guard statement says in the foot note, that
money received in advance or as a reimbursement for someone's fair share is not consideration, it's cost sharing. Asking to be compensated for your time, is very different. That's work/business regardless of the bottom line profit or loss.
People exchange money all the time for transactions that are not business. Tonight at dinner, a friend of mine and I decided to split the bill. I gave him my half in cash and he paid the bill. Does the fact I gave money to my friend mean I'm his paying customer and he has the liability of business for accepting it? If we go on a road trip and we take his car and I offer to pay half or even more than half the gas, does that mean his
insurance company would consider him a professional driver using his car for business? I think it unlikely any insurance company would deny a claim based on that idea. I think asking people to pay a proportionate share,
which you yourself are also proportionately paying , clearly does not resemble a business transaction. Most people would think it perfectly fair to share
food,
fuel and other costs when on a road trip. Why should a boat trip be any different?
Your point about the actual wording of a policy (or law, or tax code) is well taken. That's the context that matters most. I also agree that when in doubt, it's good to take the conservative approach. However, being covered to charter just to play it safe is more easily said than done for most people.
Certainly there are gray areas and different situations or different companies may define things differently. It's important to be aware of these things. My comments, however are aimed more at the idea that asking people to fairly and proportionately share costs constitutes a business transaction that will cause all sorts of trouble. I see little if any indication that is a big concern.