Yacht Clubs need several forms of insurance to cover the many different exposures they face. The first policy to be issued is the Commercial Package Policy, which can provide several different types of coverage in one policy. The first coverage found in this policy is the traditional commercial property policy (fire and hazard coverage). This part can cover the building, contents and loss of business income from the customary losses (fire, wind, explosion, vandalism, etc.). It can also include an inland marine floater to cover mobile property such as radios, trophies and golf mobiles to name a few. The next coverage part is the general liability part. Like most general liability policies this coverage is very broad, but still cannot protect the club from all of the different types of liability to the public, members and visitors that are present in normal club operations. Another form of coverage available under the Package policy is employee dishonesty coverage to protect the club from the loss of property or money from employees.
Separate coverage is needed for:
Owned boats, used as patrol or committee boats or lent to sailors for instruction or racing events. Liability coverage can be secured under the general liability policy or under a true marine form called “Protection and Indemnity”. It is possible that the club would have exposures under the Jones Act for employees that are considered master or crew of a club owned vessel. The protection and indemnity policy provides broader coverage than the general liability policy and can be endorsed to include the Jones Act coverage. Hull insurance can also be purchased.
Anderson Insurance Agency has been insuring yacht clubs for almost 40 years. We provide advice and counsel to some of the oldest clubs in America. We invite you to call us for a list of referrals. Click here to request a quote or click here to contact us.
Borrowed and non-owned boats come to the club in several different ways. Members can volunteer their boat to serve as a committee or rescue boat or anyone can lend a boat to the club for racing or any other purpose. The club needs liability insurance and hull coverage, depending on the arrangement with the vessel owner.
Regatta liability is a special area of concern for yacht clubs that participate in or sponsor races. Several insurance companies have developed special endorsements to address this unique exposure.
Many yacht clubs have a dock with slips available to members. This presents an exposure to clubs that is similar to a marina. The club has a duty and responsibility to provide a safe and secure mooring. This exposure is covered by a marina operators liability policy and covers boats and marine items of others that are in your care, custody, or control.
Coverage is also available to protect the docks, piers, pilings and bulkheads from loss or damage such as fire, wind, wave wash and ice.
If the club hires employees they need to purchase workers compensation insurance to comply with the state laws. If a club provides dockage to vessels greater than 65′ in length, they may need to secure Long Shoremen and Harbor Workers compensation coverage. In addition to the statutory obligation to provide medical coverage and lost wages, employers are exposed to actions from employees that are outside of the workers compensation laws, such as failure to hire, wrongful termination, harassment and failure to promote. Coverage to protect the club from these types of losses can be purchased through an employment practices liability insurance policy. This can be a separate policy or sometimes, can be an endorsement to the Directors and Officers liability policy.
Many clubs have trailers used to transport boats to other areas for regattas. While most trailers are covered by the vehicle pulling the trailer, the club should not rely on any coverage provided by the owner of the vehicle, as once detached from the vehicle, there is no coverage unless the club secures commercial automobile insurance. Coverage can be written to include liability, comprehensive, collision and medical payments coverage. The club should also purchase coverage for non-owned or borrowed autos. This is the term used when anyone uses his or her vehicle on club business. If the club leases or hires automobiles they need additional liability and physical damage coverage to protect them from liability arising from the use of those automobiles.
The members usually under the direction of Officers and Directors elect clubs. This creates and exposure to anyone serving as an officer or director. A special form of liability insurance is written to provide protection to those serving the club. This form of insurance will provide defense coverage and pay judgments rendered against the Directors and Officers from suits brought against them for defined wrongful acts they commit.
Many clubs are located near or on the water. Since the standard property policy does not include coverage for damage caused by floods, clubs located in any flood area should purchase flood insurance. A flood policy only provides coverage to the building and the contents inside. It will not cover boats, docks, bulkheads, landscaping or any property outside of the foundation walls of the insured building. While the policy issued may come from a standard insurance company, the actual rules, rates and claims, are the function of the government. The government limits the amount of coverage available for any one building and its contents. Excess limits are available from specialty insurance companies.
Any club that wants to secure higher limits of insurance (usually more than $1,000,000) should consider purchasing an umbrella liability policy or the broader bumbershoot liability policy. This is the most cost effective way to secure higher limits of liability insurance. These policies have a slightly broader insuring agreement and offer broader protection against lawsuits.
Anytime the opposite sexes are together, the risk of sexual molestation is present. Yacht clubs often include this environment with minors. Insurance against suits brought under this conduct is difficult if not impossible to obtain. Some insurance policies specifically exclude coverage for these suits, others are silent and some (very few, usually limited to camp operations) provide specific but limited coverage. Most often, clubs must formulate a program of education and defensive practice rather than secure coverage for this exposure.
Employers should consider purchasing employment practices liability insurance to cover them for suits from employees alleging wrongful termination, sexual harassment, failure to hire, failure to promote, non-compliance with the Americans with Disabilities Act, and other similar employment actions.
If you offer any benefit pans to your employees you should consider purchasing employee benefits liability insurance.
You may have an exposure to pollution. This exposure can only be assessed after a careful review of your operations. In many cases, coverage will not be available for this risk. The only option may be to implement a program to minimize the risk as you cannot completely avoid the risk and run a business. Coverage is readily available for underground and above ground storage tanks.
Anderson Insurance Agency has been insuring yacht clubs since 1967. We provide advice and counsel to some of the oldest clubs in America. We invite you to call us for a list of referrals. Click here to request a quote or click here to contact us.