Business operations within the marine industry can face numerous risk exposures including, but not limited to:
Property exposure from flammable paints, lubricants, oils, degreasers and solvents used in service and repair operations and the combustibility of watercraft. The risk increases if flammables are not properly stored.
Welding exposures are often a part of the repair and body work operations and should be conducted in an area away from flammables. Poor housekeeping is a serious fire hazard.
Prompt trash removal is also very important. Lubricants and fuels should be drained from any watercraft stored during the off-season to reduce the potential for a fire.
Wind, wind-driven water and hurricane damage pose catastrophe potential, especially if the operation is close to the water. Property of others in the insured’s care, custody and control is a significant exposure. Besides exposure to fire and wind or hail damage, there is potential for vandalism and theft, especially if access points are not controlled by lighting, fences and chains to prevent transport.
Crime exposures come from employee dishonesty, theft of money and securities, burglary and robbery. Employee dishonesty is possible in many areas including bookkeeping; theft of equipment, cash, or vessels in for repair; or collusion with delivery drivers. The absence of minimum controls such as pre-employment background checks, separation of duties and inventory monitoring and control may indicate a morale hazard.
Premises liability exposure is high due to public access to the premises. The moving, rearranging and hooking up of owned and non-owned watercraft pose a collision hazard to persons or to the property of others. Tripping and slip-and-fall hazards are common. Customer traffic should be controlled to prevent wandering into the service areas. Watercraft stored outside may pose an attractive nuisance to children and teens, especially during the off-season.
Test driving by employees or customers following repairs creates an exposure not covered by general liability, so a watercraft or ocean marine protection and indemnity coverage will be needed.
Automobile liability exposure is limited unless there is pickup or delivery of watercraft. Ordinary repair operations often involve drivers going to a distributor for a particular replacement part under time constraints. Transportation hazards include failure to secure the load properly and equipment failure, especially tie-downs and hitches. Vehicles should be maintained and records kept. Poor training or selection of drivers, or inadequate supervision, also pose significant risk, especially with high-valued cargo and oversized loads. Failure to monitor driving records and to ensure that drivers have the appropriate licenses are possible concerns.