Insurance Mistakes Marine Manufacturers Make — and How Agents Can Help

Marine manufacturing operations are uniquely complex, blending heavy machinery, specialized materials, and production processes that carry significant risk. It’s little wonder that marine manufacturers insurance is equally complex.

It has to be. A lot can go wrong at a marine manufacturers facility.

That raises a key question for anyone in the marine industry: What insurance mistakes should agents watch for in marine manufacturers?

There is no shortage of potential issues. When property is undervalued, liability coverages are incomplete, or if new equipment goes unreported, even a small oversight can lead to costly claims, regulatory issues, or prolonged downtime. Get to know your client’s situation, however, and you can prevent these errors and strengthen client relationships.

Recognize Gaps in Property Coverage

Marine manufacturers rely on high-value machinery, specialized tools, molds, lifts, raw materials, and vessel or component inventory. Outdated property schedules are among the most common — and most damaging — mistakes. Red flags include:

• Undervalued or unreported equipment
• Underinsured docks, piers, or yard structures
• Missing business income or extra expense protection

If equipment fails or a facility is damaged during a seasonal production spike or a supply chain shortage, that can also be a financial mess.

Agents should guide clients to review limits annually, and schedules should accurately reflect all assets. Properly maintained marine manufacturers insurance programs help eliminate surprises during claims.

Spot Liability Exposure Oversights

When your clients expand into new product lines or adopt new materials, their liability exposures shift. Failure to update coverages creates gaps that often become visible only after an incident.

Key areas for agents to verify with clients include:

• General liability
• Products and completed operations
• Pollution liability
• Protection and indemnity
• Ship repairers legal liability when applicable

It happens way too often. A manufacturer that adds fiberglass fabrication without confirming adequate pollution liability coverage could encounter issues and suddenly face significant cleanup and regulatory costs. These oversights are common, especially among growing marine manufacturers investing in new capabilities.

Evaluate Employee and Workers’ Comp Risks

Labor dynamics in marine manufacturing often change quickly. Seasonal workers, specialty artisans, and contract labor can introduce classification and coverage complexities. Agents should watch for:

• Missing maritime employers liability (MEL) or USL&H coverage
• Misclassified workers
• Employees performing off-site, afloat, or hybrid duties without proper workers’ comp protection

Your clients may want to eyeball everything, but they can’t. Accurate employee coverage protects both the employer and workforce while preventing disputes and compliance issues.

Check for Missing Specialized Coverages

Some exposures are frequently overlooked:

• Owned watercraft or vessels under construction
• High-value tools or lifts not listed on the policy
• Underinsured piers, wharves, or floating structures

Marine manufacturers may be so focused on growing their businesses that they overlook holes in coverage. The more they invest, the more they have to lose if a catastrophe occurs. Ignoring gaps in coverage and being underinsured can create severe financial strain during a loss.

Quick Top Mistakes Checklist for Agents

Fortunately, you can help your clients proactively address these gaps before renewal.

Meeting with your clients and reviewing their policy doesn’t have to be a lengthy process. If you’re unsure where to begin or what to ask, use this mini checklist of questions to simplify renewal conversations:

• Any new or expanded manufacturing processes?
• Any changes to machinery, molds, or vessel inventory?
• Are docks, piers, or floating structures insured?
• Any missing pollution or specialized liability coverages?
• Are employee classifications and MEL/USL&H needs current?

Protect Your Marine Manufacturer Clients Today

By identifying common problem areas with clients early, you can deliver stronger coverage, reduce claim risk, and demonstrate high-value expertise. Partnering with Merrimac Marine ensures that your marine manufacturer clients receive well-rounded, tailored protection throughout the year.

Connect with Merrimac Marine today to ensure your marine manufacturer clients have complete, tailored coverage.

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.