Water sports, boating and yachting can be thoroughly enjoyable pastimes, but each type of watercraft brings its own unique risks. Understanding how to best protect your clients is paramount.
Broad coverage is a critical first step, particularly for owners of larger yachts. A small handful of insurance providers offer policies that can properly protect your clients and their watercraft investments. However, much more can be done to maximize safety and minimize the potential for costly damage.
There is a vast spectrum of watercraft types, from jet skis and fishing boats to fully staffed yachts. And, of course, the larger the vessel, the more complex the issues become. The presence of crew, sophisticated equipment and technology, worldwide navigational plans, multiple mooring locations, general safety hazards and more all need to be addressed. Regardless of the type of vessels your clients own, there is one constant; education can lessen the likelihood of accidents.
The recent high-profile Costa Concordia tragedy shed light on perils at sea, but unfortunately there is plenty of danger closer to home.
According to statistics from NOAA and the U.S. Coast Guard, nearly 79 million Americans—or 32 percent—will enjoy an outing by boat this year. There also are about 12 million registered recreational vessels in the U.S., 50 percent more than 20 years ago. Although recreational boating deaths have decreased during the last 30 years, the number of accidents and injuries has steadily climbed. Between 1991 and 2009, an average of 752 boaters died while on the water. In 2010, the Coast Guard counted 4,604 accidents that involved 672 deaths, 3,153 injuries and approximately $35.5 million dollars of damage to property as a result of recreational boating accidents. In addition:
- The fatality rate was 5.4 deaths per 100,000 registered recreational vessels. This rate represents a 6.9 percent decrease from last year’s fatality rate of 5.8 deaths per 100,000 registered recreational vessels.
- Almost three-fourths of all fatal boating accident victims drowned. Of those, 88 percent were not reported as wearing a life jacket.
- Only nine percent of deaths occurred on boats where the operator had received boating safety instruction. Only six percent of deaths occurred on vessels where the operator had received boating safety instruction from a NASBLA-approved course provider.
- Eight out of every ten boaters who drowned were using vessels less than 21 feet in length.
- Florida has the most boats and the most boating accidents and fatalities: 79 in 2010.
Educating boaters on safety is a responsibility that insurance professionals should take seriously.
Here are 10 areas where boat owners and their advisors can take proactive steps to manage risk more effectively. Some of the more sophisticated practices will require support from seasoned loss prevention specialists; however, all of these considerations are intended to help everyone play it safer at sea:
- Fire prevention. Educate boaters in ways to prevent fires from occurring through good housekeeping, proper maintenance, planned fire drills, adequate on-board mitigation equipment and training of such equipment (i.e., fire extinguishers, fire blankets, smoke alarms, heat sensors, etc). Accounting for the size of the boat is critical.
- Hurricane preparedness and severe weather plans. Hurricane plans are generally required for yachts located south of Morehead City, N.C. during hurricane season. However, Hurricane Irene showed us that all coastal areas are susceptible to storm damage. Yacht yards, inland marinas and harbors of safe haven fill up quickly in the event of a hurricane, so it is critical to plan ahead and have prior arrangements or established relationships to ensure a safe harbor. An added benefit: some yacht policies will pay a percentage for what is called “preventive measures” in the event of a potential threat or severe weather event. For example, Chartis’ Private Client Group yacht policy can pay up to $5,000 for haul out, or related fees to move a vessel to a safe area with no deductible.
- Maintenance and safety reviews. Work with your clients to develop or review their scheduled maintenance and safety program to ensure that the vessel's equipment is working properly both internally and externally, and that maintenance schedules are adequate for the size of boat. This includes plans for coming out of/into lay-up for seasonal vessels and repair facility recommendations.
- Security and theft prevention. Analyze potential security concerns and recommendations to prevent theft of contents equipment and the vessel itself. This effort may include assessing the storage location, facility, mooring, boat lift/dock or the client’s dwelling and then providing a vulnerability assessment.
- Background checks of captains, officers and crew. While referrals, recommendations, and reputation carry a lot of weight in the yacht world, background checks help ensure the watercraft, and everyone on board, are in good hands.
- Overseas security advice and consulting. From trip planning international trips to understanding navigational dangers, having someone to discuss a trip and potential hazards is critical.
- In-depth first aid and safety training. Whether your clients own mega yachts or small tenders, preparing for maritime safety and medical emergencies is paramount. Ensure that this training is part of any loss prevention program.
- Post-accident support. In the unfortunate event of a loss, injury, or accident, swift action can make all the difference. Creating a post-accident guide will help everyone understand their roles and outline contingency back-up plans that are in place. A loss prevention specialist can review and even help draft such a plan.
- Upgrade assessments. Boat owners who decide to upgrade an existing vessel to one of larger size and complexity can benefit from a comprehensive assessment to help determine the implications and loss prevention needs created by the switch. There are many dangers of operating a larger vessel that well-intended owners may not be aware of.
- Thermography (infrared) inspections. Many yacht fires are the result of a preexisting electrical problem or condition. Thermal photography measures the radiant heat from a surface and can be used to check electrical panels, equipment and machinery. It also can be used to identify moisture or water intrusion. By analyzing the images, conditions can be detected early and corrective measures can be recommended. Please note: this loss prevention tactic is intended for larger, more complex vessels. You’ll want to be sure that whoever operating the camera is properly trained to use it and assess the results.
Before quoting new business or renewing your clients’ next vessel, challenge yourself to look beyond the premiums. In addition to the policy coverage and specialized marine underwriting expertise, the carriers you recommend should be able to add value to make sure that clients are safe and their assets are well protected. Considering the number of boats registered in the United States, there are great opportunities for insurance agents and brokers to promote safe boating while enabling clients, their family and friends to enjoy the beautiful waterways.