SUMMER 2013 | MARINE TECHNICIAN TODAY
11
Y
our new marine service business is up and running, your
business cards arrived from the printer and your name
is plastered all over your new pick-up truck. The tool
guy just left with $2,000 dollars of your savings, and now it’s
finally time to go out and make some money in your new profession.
Hold on, wait one minute. What did the marina owner on the other
side of town tell you he needed before you work at his yard? His letter
requested “A Certificate of Insurance showing proof of General Liability
coverage froman A-rated insurance carrier for bodily injury and property
damage arising out of your business operations, including completed
operations, and MOLL with a limit of no less than $500,000, business
auto liability coverage of $500,000 and Workers Compensation, per
statute, including USL&H with Bumbershoot coverage at a limit
of $1 million.”
What, you ask yourself, does all that mean? You can replace the fuel
injection system on an outboard with a blindfold on, but you aren’t a
third year law student!
No worries. You call your insurance guy who has insured your truck since
you were 16. He reviews the request from the marina and informs you
that he thinks a MOLL is a small rodent and that a Bumbershoot is some
new trendy vegetable. A few words of advice here: thank him for his time,
hang up and call a marine insurance agent. You need a specialist.
Let’s take these insurance terms one at a time. First and foremost
is “General Liability Insurance.” This insurance policy is fairly similar
across all businesses and protects you, the insured, from lawsuits
alleging ‘bodily injury’ and ‘property damage’ arising out of your
negligence in the course of your business operations. For example,
while working on a boat ashore you tip over a tool box which lands on
the head of another boater heading to his boat. He incurs ‘bodily injury’
caused by your negligence and he sues you. General Liability insurance
would respond to this lawsuit, pay for your legal defense and pay any
covered judgment against you.
Within this General Liability policy you also want to include ‘Completed
Operations’ coverage. This could be your greatest exposure to a
lawsuit and financial loss. Once again, an example to illustrate:
After completing a fuel line replacement on an outboard you leave
the job and head back to the shop. A month later a gentleman visits
and presents you with a summons. You find out that the boat you
worked on burst into flames (along with a good piece of the dock)
when the owner started the engine for the first time. In this case, your
‘completed operations’ caused ‘property damage’ arising out of your
negligent work. Your General Liability completed operations insurance
would respond to this lawsuit, pay for your legal defense and also pay
any covered damages up to the applicable policy limits.
The other insurance to be aware of is “MOLL,” or Marine Operators
Legal Liability. MOLL fills in a coverage exclusion found in the General
Liability policy discussed above. The exclusion states that the policy
will not insure property in your “care, custody or control.” A lawyer
would call that a ‘bailment’. It is the same thing as handing your car
keys to a valet attendant or dropping your leather coat off at the dry
cleaner. When you take control of someone’s property you become
legally liable for damage to that property. The valet is responsible
for your car, the dry cleaner is responsible for your coat and you
are responsible for your customer’s boat while you have custody or
control of the boat. (Note: You don’t have to take the boat with you to
be in ‘control’ of it. Simply working on board could place the boat in
your ‘control’.) MOLL provides you this added insurance protection
and is sold only by insurance companies that specialize in marine
insurance. If you store, haul, test drive or repair boats you need
MOLL to be fully protected.
So what about those other insurance requirements?
Tune in next issue for Insurance 201!
James “Jay” Kay is President of Stafford & Co. Insurance and holds the national
designations of Certified Insurance Counselor and Certified Risk Manager.
MARINE INSURANCE 101:
A
PRIMER
COVER YOUR ASSETS
.
