Boat

Why Cookie-Cutter Coverage Won't Protect Boat Manufacturers

Boat manufacturers vary greatly by size as well as the type of vessel produced. Boat manufacturers, however, are never typical manufacturing operations. Boat and yacht building is a highly technical and specialized craft that requires both an artistic eye and unfailing precision.

Whether you build boats for private or commercial use, wood boats, fiberglass boats, fishing boats, or luxury vessels, there is one thing all boat builders have in common: the need to mitigate the risks inherent in your business. For boat manufacturers, that means protecting your business and your customers before, during and after the production of every boat. 

Americans Love Boats

Boating is big business in the United States.

  • U.S. expenditures on boats, engines, accessories and related costs totaled $35.4 billion in 2014.
  • An estimated 171,500 new powerboats were sold in 2014, an increase of 6.4% over 2013.
  • Annual retail sales of new boats, engines and marine accessories in the U.S. totaled $16.4 billion in 2014.
  • 94.9% of powerboats sold in the U.S. are made in the U.S.

Source: National Marine Manufacturers Association, 2014 Recreational Boating Statistical Abstract

Boat manufacturers might produce more than just boats, including boat accessories and a variety of other marine products. Your business risks are highly complex and very unique, based on factors such as the following:

  • The type of boats you build
  • The materials you use
  • The types of customers you have (leisure, commercial) 
  • The location where you operate and the specifics of your manufacturing facilities
  • The number of employees you have
  • The type of facility you operate, e.g., a marina
  • The repair service you provide

It’s Complicated: Boat Builders Need an Experienced Insurance Adviser

Boat manufacturers insurance is very complex. You must work with an insurance agent and insurance companies who know about your business and who regularly work with others in your industry. Only an independent insurance agent can help you find insurance companies that specialize in boat manufacturers insurance and that provide special packaged policies tailored to the needs of your industry.

You will need numerous lines of property and liability coverage to address all of the risks that are inherent in your business, including but not limited to the following.

1. Property Coverage for Boat Builders

  • Commercial property coverage for your building(s) and their contents (your business personal property), including manufacturing facilities and any other property you need to protect from weather events, fire, smoke, theft, vandalism and other disruptions
  • Business interruption coverage, including coverage for utility breakdowns
  • Coverage for heavy equipment, including machinery, docks and piers
  • Equipment breakdown coverage 
  • Coverage for boats under construction, from the beginning of construction through delivery 
  • Inland marine coverage for boats, machinery and parts in transit
  • Inventory coverage
  • Special flood, wind and hail coverage where applicable
  • Employee theft and crime coverage

2. Liability Coverage for Boat Builders

A Note About Workers’ Compensation Insurance for Boat Builders

It goes without saying that boat manufacturing can be dangerous for employees. Every boat manufacturer needs workers’ compensation insurance to protect its employees from the costs of work-related injuries and illnesses.

In some cases, however, boat manufacturers may be subject to the Longshore and Harbor Workers’ Compensation Act. This is a federal workers’ compensation act that applies in very specific circumstances for certain types of maritime employees. Like workers’ compensation insurance, it covers the costs of medical care for employees who are injured or disabled while working on the navigable waters of the United States, or in adjoining areas used in loading, unloading, repairing or building a vessel. 

Whether or not a boat manufacturer’s employees would be covered by this Act – rather than standard workers’ compensation insurance offered in your state – relies upon two relatively complex “tests” based on the nature of the employee’s work and the location of the work. There are also numerous specific exclusions, including the following:

  • Shipbuilders who are employed to build recreational vessels smaller than 65 feet long 
  • People employed by a marina who are not engaged in the construction, replacement or expansion of the marina
  • Mechanics and repairmen for recreational vessels

You may have certain employees who are covered under the Act and others who are not. 

Your independent insurance agent can add Longshore and Harbor Workers’ Compensation Act coverage to your workers’ compensation policy to ensure that you have the right coverage if it applies to any of your employees.

Find Boat Manufacturers Insurance Tailored to Your Needs

Boat manufacturing is a highly complex and technical business. You need the advice and counsel of an independent insurance agent who has experience working in your industry. Your agent can work with numerous highly rated insurance companies that specialize in writing insurance for boat builders and manufacturers.

Do not trust your business to one-size-fits-all coverage or you may be vulnerable to devastating exposures. You need specialized marine insurance that is tailored to your needs, and the help of an adviser who is in your corner for the long term.

Now, who's ready to get their insurance problems solved?