How To Spot Coverage Red Flags in Ship Repairer Accounts Before Renewal

For ship repairers, nothing in this business stays the same for long. During renewal season, it’s crucial that they carefully review their ship repairs insurance policy.

Renewal season is far more than routine paperwork. This is a chance to look closely at your client’s business and identify preventable issues. Verifying that their policy remains robust prevents them from being underinsured and helps them avoid costly claims.

Spot Shifts in Repair Operations

If you have a client who is a ship repairer, they are routinely expanding or modifying their services — adding welding, painting, electrical work, fiberglass repair, mobile operations, or larger vessels. These changes contribute to the health of their growing business, but they also increase exposure and should prompt a coverage review immediately.

For instance, a shipyard that adds fiberglass repair but fails to update its carrier about increased flammable-materials exposure could face major uncovered losses after a fire or ventilation-related incident.

Red flags you’ll want to be on the lookout for with your clients include:

• New vessel classes (e.g., commercial workboats, luxury yachts, fishing vessels) not reflected in underwriting details
• Increased subcontractor activity without proper indemnification or certificates of insurance
• Growth in mobile or offsite repair operations not listed on the policy

Check Care, Custody, and Control Gaps

Care, custody, and control exposures form the backbone of any ship repairer’s risk program. Agents should focus heavily on:

• Undervalued vessels in the repairer’s possession, especially high-value yachts
• Outdated tool and equipment schedules
• Missing procedures for sea trials, towage, or subcontracted work
• Insufficient pollution liability for solvents, debris, runoff, or fuel handling

A ship repairer’s legal liability policies can vary widely, so verifying limits, conditions, and endorsement wording is essential. 

Evaluate Liability and Employee-Related Risks

Repair yards frequently scale staffing up or down depending on workload. Temporary welders, contracted labor, and traveling teams can all change the risk landscape and must be reflected in all employee-related coverages.

Several things can go wrong. For instance, a misclassified temporary welder might suffer an injury, and workers’ comp could deny the claim. Then maybe a dispute follows, delaying repairs, increasing costs, and exposing both the repairer and agent to significant risk.

Agents should verify:

• Whether coverages align with current worker classifications
• That temporary or seasonal workers are included and properly reported
• Whether the repairer has added new services — like engine installation, electronics upgrades, or electrical rewiring — that alter liability severity

Identify Missing Property and Equipment Protections

Ship repairers often accumulate high-value tools and yard equipment that never make it onto the policy. Agents should watch for:

• Unreported new tools, lifts, compressors, or machinery
• Underinsured docks, piers, floating structures, staging areas, or work barges
• Lack of business income or extra expense protection

When clients are busy, that, too, can lead to potential problems. Seasonal repair peaks increase shipyard congestion. More vessels may result in a higher risk of property losses if any incidents occur.

Partner With Merrimac for Renewal Review

Identifying red flags early strengthens your renewal strategy and protects clients from costly losses, but it does more than that. Suddenly, you aren’t simply your client’s insurance agent — you’re a technical advisor.

Merrimac Marine offers specialized support, tailored solutions, and deep expertise in the ship repair sector. Contact us to conduct a comprehensive renewal review and ensure your ship repairer clients have the proper protection in place.

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.