Adapting to Boat Shows and Increased Customer Liability With Boat Builder Insurance

Boat building is a profitable yet risky industry. But boat builder insurance can help your clients swim, instead of sink.

Potential trouble is always lurking, especially as boat builders shift from production and testing to the busy event and delivery season. Between boat shows, customer demonstrations, sea trials, over-the-road transport, and storage transitions, their exposures evolve quickly.

You’ll want to flag new liability concerns early and remind your clients to schedule an appointment for a policy review.

Seasonal and Event-Driven Exposures for Boat Builders

As fall and winter approach, many builders change their focus from the great outdoors to the great indoors. Suddenly, it’s boat show season, with promotional cycles that bring vessels off the shop floor and into public environments. 

There’s more risk than a layperson would think. Boat builders need to transition their vessels from controlled manufacturing spaces to staging areas or exhibition halls, and accidents can happen.

They can also occur at boat shows. Boats can be vulnerable to damage due to heavy customer foot traffic and their elevated interaction with finished or nearly finished vessels. If you have multiple models on the floor, you have even more exposure.

At the same time, inventory tends to increase before and during shows, which can bring new challenges. Vessels may require over-the-road transport, temporary storage, or staging in unfamiliar marinas.

There are other layers of risk to consider, including theft, weather exposure, or mishaps involving third-party contractors.

Demo rides and sea trials also bring unique liabilities — from equipment failures to collisions to cold-water safety concerns. Unfortunately, if you can imagine something going wrong, it probably can.

Why Customer Liability and Delivery Phases Pose Elevated Risk

The phases leading up to final delivery are some of the most dangerous in the builder’s risk profile. Sea trials, pre-delivery inspections, and customer handovers create situations where builders operate vessels under real-world conditions, often with customers on board.

As we’ve noted before, delays and liability issues in new vessel deliveries during the handoff process can quickly escalate into claims. That’s especially true when the vessel is already contracted or partially accepted by the buyer.

In addition, as electric and hybrid propulsion systems continue to grow, builders must consider new exposures related to battery systems, charging, fire risk, and training requirements.

But on the upside for you, all of these scenarios provide opportunities to help your clients strengthen their insurance programs ahead of the season.

Risk-Management Tips for Boat Builder Clients

Insurance agents can play a critical advisory role by reviewing builder operations and identifying gaps in coverage, vulnerabilities that often aren’t addressed in generic, cookie-cutter commercial policies, such as:

• Does the client’s policy specifically cover vessels under construction or only finished inventory?
• Are over-the-road transport, loading/unloading, and third-party carrier risks addressed?
• Does the current program cover damage during sea trials, demo rides, or cold-weather tests?
• Are hybrid or electric propulsion systems explicitly included?
• Is pollution liability included or excluded?
• How are job-site exposures handled when builders work off-premises?
• Are product liability and completed operations limits still adequate for current production levels?

You can also recommend operational best practices to your clients, such as maintaining an inventory control system before shows, updating transport safety protocols, and using a standardized sea-trial checklist for customer demonstrations.

Strengthening Builder-Client Programs

As boat builders participate in more events, expand customer-facing activities, and adopt new technologies, their risk profiles become more complex. Their insurance programs must evolve with it.

Virtually everybody wants to be well-insured, and if something does go wrong, you’ll be a hero to your clients when they turn to you and you can tell them that they’re covered.

Contact Merrimac Marine’s specialists to review programs, identify vulnerabilities, and explore placing coverage through Merrimac’s industry-focused boat builder insurance solutions.

About Merrimac Marine Insurance

At Merrimac Marine, we are dedicated to providing insurance for the marine industry to protect your clients’ business and assets. For more information about our products and programs, contact our specialists today at (800) 681-1998.