# Insurance Question (not health)



## fishmonger (Apr 17, 2007)

Recently I've been doing some teak refinishing and repair on boats to make some extra cash because of the slowdown in the contracting business. I'm thinking of starting up a seperate buisiness for this. My insurance broker told me that the insurance policy I currently have wouldn't cover the liability on a boat should anything happen. His reason was that since there were no real laws governing the improvements on boats it isn't the same. Unlike home improvement there are no inspectors or codes to abide by. He said a seperate policy could be drawn up though.

My question to you jocks is this. How much liability insurance do you carry? If any. Rarely are the jobs I take more than a $1k. The largest I had so far was nearly $5k. But the some of the boats I've been working on cost over a milllion. How much insurance do you think I need?

Thanks in advance,

Joe


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## bbrooks (Jan 3, 2007)

In this day and age, probably a $2-$5 million policy is what you want. It is not just that your work would cost little, but what you could be sued for. Remember when a customer sued McDonalds for their coffee being too hot when they spilled it in their lap? It was a multi million dollar claim. Not that you would have the same situation. But think about it. If you made a windshield for a boat, and say it blew apart during a wind storm while the boat owner was sailing it to shore. He crashes on the rocks, and sinks his boat. He says it is because the windshield blew apart and he could not see where he was going. So he sues you to replace his million dollar boat that sank.

Not to go into what the legal system may or may not do, but what if they rule that you are liable? I do not know about you, but I do not have a million dollars lying around to pay for such a claim. Insurance is to cover you against the large unanticipated losses, not those small known ones like replacing the $500 windshield that fell out.

I know this is an extreme example, but the legal system is so full of stories like this you have to take precautions. Find a good insurance agent you can trust and have them help you figure this out.


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## Splinters (Dec 12, 2006)

Bill's comments sound like good advise to me Joe. I recently added a business clause to my homeowners policy because of going to public shows and farmers markets etc.. to show/sell my products.


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## fishmonger (Apr 17, 2007)

Thanks for the responses folk. After talking it over with my insurance broker we decided that 1million was adequate for the time being. We decided this because because I wouldn't be doing anything structural (no stringer or transom work). The policy has a 5K deductable and the cost is just over $1100 a year.


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## bbrooks (Jan 3, 2007)

That sounds about right for the policy you are getting. It is just a precaution against a major loss, not the every day occurrences. Hopefully you will never have need for it, but it is good that it is there. Just one more expense we have to bear these days to ply our trade. If we had been doing this 50 years ago, I doubt we would have even talked about the issue. Then again, there was no internet at that time either..


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## MJL (Aug 7, 2007)

Before I was involved in the Dowelmax project, I was investigating marine insurance claims and would strongly advise you to make sure you have full coverage for liability. Don't under any circumstances be tempted to work on marine vessels without proper insurance. Marine insurance is very different from other forms of insurance. I have witnessed some nightmare situations with respect to repairers, and if a small problem leads to a large incident, i.e. fire, sinking, or bodily injury, the resulting litigation can lead to claims in the millions of dollars. Before I retired I learned of one particular mechanical repairer whose employee worked on the marine gear, which overheated, causing a fire resulting in extensive damage. I am not aware of the outcome, however the claim was in the hundreds of thousands of dollars and that particular repairer had no insurance to cover the costs. My advice to "fishmonger" is to contact a marine broker and I emphasise marine, to make sure he gets full coverage. Working without proper marine insurance is definitely not recommended. If a repairer carries out work on a vessel and shortly afterwards an accident occurs, the first assumption (often wrong) is that the repairer was somehow responsible. He could then be blamed and held accountible. That is why you need a good marine insurance broker or underwriter on your side.

Regards,
Jim
Dowelmax


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## MsDebbieP (Jan 4, 2007)

thanks for that Jim.

when I was the "home child care support person" we did an article on insurance and the advice was "be fully honest with your insurance company about what you are doing …. if you try to save a few $$ by pretending you are/are not doing something.. then it won't be covered under your policy and you will be up that creek without a paddle (and speaking of creeks - refer to Jim's marine information haha)


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## che (May 18, 2007)

While there aren't any legal requirements to get your boat inspected there are pleanty of inspectors and guidelines regarding boat structure, electrics, ventillation etc. A great starting place is the American Boat and Yacht Council (ABYC)
http://www.abycinc.org/

"The sea is selective. Slow in recognition of effort and aptitude, but fast in sinking the unfit." 
Felix Reisenberg Jr.


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