Marinas are fun, but they are also a unique collection of risk exposures, including water, electricity, fuels, unsure footing, and, often, alcoholic beverages.
Therefore, risk management is a major responsibility of marina operators, who are commonly faced with three categories of risk exposures and related insurance coverages.
Perhaps the largest of these is the legal liability exposure for property of others in the insured’s care, custody, and control; i.e., a marina’s liability for protecting the boats and equipment it docks and stores (other than its own) as boatowners have committed their craft to marinas for safekeeping, and the marina typically assumes liability as a bailee.
Next, there is liability for bodily injury and property damage to others. Given their proximity to water, marinas have unique and potentially severe exposure to drownings, boating accidents, and environmental liability, in addition to general liability exposures common to all enterprises.
Third there’s the exposure to property damage for the docks, storage buildings, racks, equipment, and watercraft owned by a marina itself.
Marinas often find themselves underinsured for the value of their docks and buildings, according to Keith Hayman, senior vice president of Goodman-Gable-Gould/Adjusters International (GGG/AI), one of North America’s leading public adjusting firms. Any marina that chooses to underinsure its property exposures should do so, consciously and carefully, with full appreciation for the potential consequences.
“Marinas need to value their docks, buildings, and equipment properly,”he says.“Secure a blanket property policy and be careful of coinsurance requirements. Work with your broker to get agreed value coverage.”Blanket coverage is also better for addressing income losses at marinas, Hayman adds,“especially when the revenue streams complement each other.”
Beyond these exposures that are inherent to any marina operation, there may be additional class-specific exposures for marina restaurants and entertainment venues. These types of risks have become more extensive in recent years, as marinas have explored new sources of revenue to counteract the decline in the number of boats in the U.S. following the last recession.
(Boat sales have increased in recent years, but have not reached their pre-2007 peak. Also, the average age of boatowners continues to increase, an indication that fewer young people are purchasing watercraft.)