Marina Insurance and Vendor Risk Management

By Gary E. Wilson, President & Designated Broker, Wilson Management, Inc.

Marinas concentrate risk in ways upland commercial property does not. Valuable, mobile, owner-controlled property sits on structures the facility owns, in water, exposed to weather, worked on by contractors the facility may not have hired.

When something goes wrong the question is rarely whether there is exposure. It is whose insurance responds — and that is decided long before the incident, by documents somebody either tracked or did not.

This is a practical checklist for that.

Tenant insurance: tracked, not collected

Moorage agreements almost always require tenants to carry insurance. The requirement is close to universal and the administration of it is close to universally weak.

The failure is simple: a certificate is collected at the start of the tenancy, filed, and never looked at again. Policies lapse. Coverage changes. Vessels are sold and replaced with something different. Two years later the facility believes every vessel is insured and has no basis for that belief.

The checklist:

• Coverage required, at stated limits, written into the moorage agreement
• Certificate obtained before the vessel takes the slip
• Facility named as additional insured where the agreement requires it
• Expiry date recorded and tracked, with renewal requested before it lapses
• A defined consequence for non-compliance that is actually applied
• Re-verification when a tenant changes vessels
• Records retained

Tracking to expiry rather than collecting once is the entire difference. A lapse is only ever discovered at the moment it matters.

The facility's own coverage

Marina exposures are specific enough that general commercial property coverage frequently does not reach them. Worth confirming what your programme actually covers:

• Docks, piles, floats and gangways — marine structures, which some policies treat differently from buildings
• Upland buildings, offices and yard structures
• Wharfingers liability — for damage to vessels in the facility's care, custody or control
• Marina operators legal liability
• Pollution liability, which general liability policies commonly exclude and which is a genuine marina exposure
• Business interruption, including loss of moorage income if a dock is closed
• Storm and windstorm provisions, deductibles and any exclusions
• Boatyard operations, where the facility hauls out or performs vessel work — a materially different risk profile

The one most often missing is pollution. A fuel spill or a sinking vessel produces a cleanup obligation, and a facility discovering during an incident that its policy excludes it is in a difficult position.

Contractors and vendors

Marinas run on specialist trades — marine contractors, divers, marine electricians, upland trades — and they work in an environment where an error has outsized consequences.

Before any contractor works on site:

• Licensed appropriately for the trade and the work
• General liability at limits appropriate to the work
• Workers' compensation — particularly important for marine work, where different compensation regimes can apply to maritime employment
• Automobile liability where vehicles are used on site
• Pollution coverage where the work could produce a discharge
• Marine-specific coverage where the work is in or over water
• Facility named as additional insured where required
• Certificates held before work begins, and tracked to expiry
• Contractor briefed on the facility's environmental requirements
• Scope agreed in writing before work starts

Tenant-hired contractors

This is the gap most facilities have not closed.

A tenant hires someone to work on their boat at the slip. That contractor is on your docks, using your power, possibly generating discharge over your water — and you have no contract with them, may not know they are there, and have not seen their insurance.

The moorage agreement should address it: tenants notify the facility before bringing contractors on site, contractors provide evidence of insurance, and the facility retains the right to refuse access to anyone who does not.

Enforcement is imperfect in practice — tenants forget, and a facility cannot police every visitor. But the agreement establishes the position, and it gives the operator a basis to act when someone turns up with an angle grinder.

Vessel condition and derelicts

An under-maintained vessel is an insurance problem before it is anything else, and a sinking one is an environmental incident, a navigation hazard, a salvage operation and a slip out of service simultaneously.

• Seaworthiness standards written into the moorage agreement
• Condition observed during routine dock walks, with concerns raised early and in writing
• A clear process where a vessel deteriorates below the standard
• Awareness of the constraints on removing or disposing of a vessel

Documentation as risk management

Most of what determines the outcome of a claim is what was recorded before it.

• Inspection records — routine dock walks with findings and dates
• Maintenance records — what was done, when, by whom
• Incident reports completed at the time rather than reconstructed
• Photographs at the time of any incident, before anything is moved
• Insurance certificates for tenants and vendors, current
• Tenant contact details, refreshed annually
• Emergency and salvage contacts, confirmed current

The value of an inspection record in particular is that it demonstrates a system rather than a memory. A facility that inspects on a schedule, records findings and addresses them within a reasonable time is in a materially different position from one relying on recollection.

Why upland policies miss marina exposures

Owners who come to marinas from other commercial property are frequently surprised by what a standard programme does not reach, and the gaps follow a pattern.

Marine structures are not buildings. Docks, piles, floats and gangways sit in and over water, they are exposed to conditions no building faces, and some policies treat them under different terms — or exclude them — from the buildings on the upland. A facility insured for its office and yard buildings may have considerably less coverage on the asset that generates its income.

Care, custody and control is the defining exposure. A marina holds other people's valuable, mobile property on its structures. When a vessel is damaged and the facility is implicated — a cleat that pulled out, a dock section that failed, a mishandled haul-out — the question is whether wharfingers or marina operators legal liability responds. General property coverage does not.

Pollution is commonly excluded. General liability policies frequently carry a pollution exclusion, and a marina's realistic incidents — a fuel spill, a sinking vessel releasing fuel and oil — sit squarely in it. This is the single most common serious gap.

Income loss follows structural failure. If a dock closes, the slips on it stop earning for however long the repair takes, which for marine work can mean waiting for a seasonal work window. Whether business interruption reaches that, and on what basis, is worth establishing rather than assuming.

Boatyard work is a different risk class. Haul-out, blocking and vessel repair carry exposures that moorage does not, and a policy written for a moorage-only facility will not have contemplated them.

None of this means a facility is uninsured. It means the programme should be built for a marina rather than adapted from one written for upland commercial property, and the time to establish that is at renewal rather than at a claim.

The relationships to establish first

Two are worth arranging before they are needed, because both are difficult to secure during an incident.

Salvage and environmental response contractors. In a major weather event these are in demand across the whole region simultaneously. A facility with an existing relationship gets a response; one calling for the first time joins a queue. Numbers belong in the emergency plan and should be confirmed annually.

Your insurance broker's claims contact. Knowing who to call, and what the notification requirements are, before an incident rather than during one.

An annual review worth scheduling

Most of what fails in this area fails through decay rather than decision — certificates lapse, contacts change, coverage drifts out of step with what the facility now does. An annual pass catches nearly all of it.

Coverage against activity. Has the facility started doing anything it was not doing at the last renewal — hauling out, dispensing fuel, adding liveaboards, taking on commercial tenants? Each changes the risk profile, and policies written before the change may not contemplate it.

Limits against values. Dock replacement costs and vessel values both move. Limits set several years ago may no longer relate to what a serious loss would actually cost.

Tenant certificates. A sweep of the whole rent roll rather than spot checks, with anything lapsed chased.

Vendor certificates, same exercise.

Contact lists. Tenant emergency contacts, salvage and environmental response contractors, the broker's claims line, and internal staff contacts. This is the item that decays fastest and matters most at the worst moment.

Agreement terms. Whether the moorage agreement's insurance, seaworthiness and contractor provisions still reflect what the facility needs, particularly if the operation has changed.

None of it takes long, and it is considerably cheaper than discovering any of it during an incident.

Where to go next

Our Marina Management page covers the wider service, and Storm and Emergency Response covers preparation for the events these policies exist to answer.

To discuss your facility's exposures, contact us or request a free analysis.