In addition to general and property liability insurance, boat dealers typically need four special types of coverage: title errors and omissions, false pretenses, truth in lending, and engine hours and omissions. Policies specifically designed for boat dealers can include all of these types of protection and may be referred to as "marine policies."
Who Needs Insurance?
A business owner who sells new or used boats, rents watercraft on a regular basis, trades boats or repairs boats may be included under the title of "boat dealer." These owners typically need insurance coverage to protect themselves and their company's operations.
Cost of Insurance
Boat dealer insurance can cost up to $6,000 per year. Quotes and premium rates are established by insurance companies upon a thorough investigation of the dealership's inventory and insurance needs.
Insurance policies are typically offered to dealers of both new and used boats. Some policies might also provide coverage to boat rental stores, yacht brokerages, marina rental companies, and boat repair companies.
Offered limits for general and property liability might range as high as $20 million dollars. Limits for truth in lending, false pretenses, title errors and omissions, and engine hours errors and omissions range from $15,000 to $300,000, depending on the insurance company.
For a boat dealer, this type of coverage usually provides commercial general liability protection, which includes protection against watercraft liability exposures, medical payments, pollution coverage, employee benefits liability, and employment related practices liability. It can also include umbrella bumbershoot liability, which is additional umbrella insurance coverage for events on either land or water.
This coverage provides protection for losses stemming from damage to buildings or contents, employee tools, and losses to business income resulting from that damage. Additionally, it provides legal liability coverage for boats in the insured's care, such as those undergoing repair or rental watercraft. Coverage usually also extends to electronic data.
Truth in Lending
This type of coverage provides protection for a boat dealer who fails to comply with the Truth in Lending Act provisions of the Consumer Credit Protection Act, whether due to negligence, omission, or error. This Act proscribes rules regarding the disclosure of information to a borrower when seeking to borrow funds for a purchase.
This coverage protects the insured against instances of being tricked into parting with property due in exchange for property to which the individual inducing the transaction did not have proper title. Essentially, it assists the insured boat dealer with recovering the cost of the property they parted with due to relying on false information.
Title Errors and Omissions
This type of coverage provides protection for when the insured makes an error in title paperwork that affects the identification of the property. It provides payment to resolve the title error affecting a sold or traded boat.
Engine Hours Errors and Omissions
This coverage protects a boat dealer against claims that an error or problem in a boat's engine caused it to be unable to run as long as normal. It is coverage that solely protects legal claims regarding a boat's engine.
Optional Insurance Coverage
Depending on their type of business and location, boat dealers may also elect to purchase optional insurance coverage types. Coverage limits vary for each insurer.
Commercial Automobile Insurance
A boat dealer that uses vehicles or boat trailers in the normal course of business likely needs commercial automobile insurance coverage. This type of coverage provides protection for all business-related vehicles and accidents involving those vehicles while being used for business purposes that cause injury or damage.
A boat dealership that also operates a marina may need marina insurance coverage. This type of insurance coverage provides protection for injuries or damage caused by boats owned or operated by the marina or injuries caused to the crew or captain of a vessel that the marina owns.
It also provides coverage for marine items in the dealer's care and control and for damage to boats docked in the marina that were improperly secured due to the marina's mistake.
This type of coverage provides protection against damage caused by floodwaters to boats, buildings, and other property owned by a boat dealer for business purposes. Dealers who operate in flood-prone areas are usually encouraged to purchase this coverage.
Companies Selling Boat Dealer Insurance Policies
Companies that solely offer marine insurance policies typically offer boat dealer insurance. The companies below are a few of the insurers that offer boat dealer insurance policies.
- Anderson Insurance Agency has been in operation for 40 years. Its boat dealer's policy provides commercial liability, property, employment practice, and business interruption coverage. The company also offers flood, commercial auto, and marina insurance to boat dealers.
- Global Marine Insurance provides flood coverage, commercial general liability, cargo coverage, commercial auto, bumbershoot coverage, tools and equipment coverage, dealership inventory coverage, and commercial property coverage. Truth in lending and title errors coverage is also available.
- United Marine Underwriters offers coverage including commercial general liability, property, and automobile. Marine packages are also available, which provides coverage for docks, slips, and piers.
Insurance for Your Boat Dealership
Consider the full scope of your dealership's operations prior to purchasing a boat dealer insurance policy. Doing so ensures that the coverage you purchase adequately protects you against all of the types of liability you may encounter during normal business operations.