Any business that sells new or used boats, rents out boats or other watercraft, accepts trades on boats, or provides repairs on boats is considered to be a boat dealer. Boat dealers need your everyday insurance, such as General Liability, Property Damage Insurance, Workers’ Comp, and Business Interruption Insurance. They also need more specific types of “marine policies” such as Title Errors and Omissions, False Pretenses, Truth-In-Lending, Inventory Coverage, Engine Hours and Omissions.
For a boat dealer, this type of insurance is written to protect the boat dealership against watercraft liability exposures, pollution coverage, employee benefits liability, and employment related practices liability. If you feel that the coverage levels are not enough, dealerships are able to purchase “bumbershoot liability”, which is a type of Umbrella insurance coverage for incidents that occur on either land or water.
Marine Garage Liability:
Provides more specific liability coverage than General Liability policies. Covers against a loss arising out of bodily injury or property damage that was caused by the insured’s premises, operations, work performed or products.
Property Damage Insurance:
Property Damage insurance provides protection against damage (e.g. fire, flooding, natural disaster) to buildings or its contents, including employee tools. It also provides liability coverage for when privately owned boats are in the insured’s care (e.g. for repair), and it covers liability for rented out watercraft. An extension, Business Interruption insurance, covers the loss of income as a result of the damage.
Inventory Coverage/Open Lot/Dealer’s Blanket:
Inventory Coverage expands upon Property Damage insurance by including boats and other watercraft located on the property or at another insured location (such as a storage warehouse) that are owned by or under the care of the boat dealer.
Title Errors and Omissions:
In the event that the insured, the boat dealership, makes an error on the title paperwork that affects the identification of the property, Title E & O insurance provides payment to resolve the issue so that the sale or trade of the boat can be completed.
Fraud can happen to anyone, including a boat dealership. False Pretenses coverage protects the insured against a loss if they were tricked into completing a trade when the other party did not actually have a proper title or actual ownership to the property they offered in exchange.
Truth in Lending Protection:
If your boat dealership provides financing for the purchase of inventory, then it is recommended to purchase Truth in Lending insurance coverage. The Truth in Lending Act is a provision of the Consumer Credit Protection Act and requires lenders to properly disclose certain information to the borrower. This insurance coverage provides protection for the boat dealership if they fail to comply with the Truth in Lending Act through negligence, omission, or error.
Engine Hours Errors and Omissions:
This coverage solely protects legal claims regarding a boat’s engine and nothing else. For example, a claim that is made saying that an error or problem in a boat’s engine caused it to be unable to run as long as it should have been able to run.
Protection and Indemnity Coverage:
This coverage is for watercraft that are under repair or for sale. It is designed to provide protection while the watercraft is off premise, a part of a demonstration of watercraft’s capabilities while off premises, and watercraft larger than 26’ in length that are not carrying persons or property for charge.