Boat Builder Insurance for Hybrid and Electric Boat Designs

Hybrid and electric vessels are reshaping the marine industry in 2025, creating new challenges and opportunities for boat builder insurance. These innovative propulsion systems require updated risk assessments, especially as boat builders adopt alternative technologies in both design and construction. Staying ahead of these shifts helps agents support clients exploring more sustainable builds.

As propulsion systems and onboard technologies evolve, so does the risk landscape facing modern builders. As such, boat builders’ insurance must address exposures tied to lithium battery systems, charging infrastructure, and prototype testing.

Rising Demand for Green Boats

Boat builders are increasingly shifting toward hybrid and electric vessels in response to rising client demand for greener alternatives and tightening environmental regulations. Sustainability goals across the marine sector are also accelerating innovation in design, materials, and propulsion systems.

This evolution introduces unfamiliar liabilities and tech-related risks, from battery fires to electrical system failures and software malfunctions. Traditional policies often overlook these exposures, making it essential for agents to reassess coverage strategies.

Unique Risks Boat Builders Now Face

As boatbuilders incorporate hybrid and electric systems, they face several emerging risks that demand specialized coverage.

• Lithium-ion battery fire hazards: These batteries pose thermal runaway risks that can lead to intense onboard fires, especially during charging or collision events.
• Evolving regulatory compliance: Builders must navigate complex local and international safety standards, including emissions, electrical systems, and material certifications.
• Prototype and systems testing: Trial runs of new technology increase exposure to failures, malfunctions, and liability from unproven systems.
• Electrical system vulnerabilities: Integrated propulsion and navigation systems create greater reliance on sensitive electronics, heightening exposure to power surges and cyber threats.

Merrimac’s deep marine focus equips agents to address these unique exposures for boat builders.

Essential Boat Builders Coverages To Include

A well-rounded boat builder insurance program should include coverage components that reflect both traditional exposures and emerging risks:

• Builders risk: Covers vessels under construction, including materials, equipment, and labor costs, from fabrication through launch and sea trials
• Protection and indemnity: Provides liability coverage for bodily injury, property damage, and legal defense during water-based operations or testing
• Pollution liability: Addresses environmental exposures, such as fuel spills or battery leakage, that can arise during construction, transport, or trial runs
• Business income: Helps recover lost revenue if operations are interrupted due to covered losses like fire, equipment failure, or supply chain disruption

Merrimac Marine customizes each policy to reflect the unique technical exposures of hybrid and electric builds, from battery storage to propulsion control systems. Coverage limits, testing provisions, and pollution terms are adjusted to fit the builder’s risk profile and project scope. With deep industry insight, Merrimac Marine serves as a reliable partner as technology and regulatory demands continue to evolve.

Boat Builder Insurance That Powers Innovation

The right boat builder insurance gives marine innovators the confidence to pursue advanced designs without exposing their operations to unchecked risk. As demand for sustainable vessels grows, tailored coverage plays a key role in helping boat builders move forward with new technologies while protecting their bottom line.

Merrimac Marine remains committed to supporting boat builders who are setting higher standards for safety and environmental performance. Contact us to build a program that keeps pace with innovation and protects what matters most to your clients.

About Merrimac Marine Insurance

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