Ship Repairers and Care, Custody, and Control: Underwriting Issues Agents Need To Navigate

Every time ship repairers take possession of a vessel, they assume significant responsibility for it. They may not be the owner, but in the eyes of underwriters, they are.

Whether the boat is in dry dock for routine maintenance, staged in a yard awaiting haul-out, or undergoing a multi-week refit, the repairer is legally accountable for what happens to it. That responsibility is the essence of care, custody, and control (CCC) exposure — and it sits at the center of underwriting for ship repairers insurance.

What does care, custody, and control mean for ship repairers? It means that if your clients are not properly insured, they’re vulnerable. Once a vessel is entrusted to the repairer for any purpose, the repairer may be held liable for damage to that vessel, regardless of whether the damage was caused by negligence. For agents placing coverage in this space, CCC is one of the most critical and most misunderstood factors in getting the program right.

CCC Risks for Ship Repairers

The CCC risks are only growing. The global ship repair and maintenance market is projected to expand from $32 billion in 2026 to $60.6 billion by 2036.

Standard general liability (GL) policies routinely exclude CCC exposures. The logic is straightforward: GL coverage is designed for third-party bodily injury and property damage, not for damage to property in the insured’s direct care. When a vessel owner files a claim for damage that occurred while their boat was in the repair yard, a GL policy will typically deny it. That leaves the repairer — and their client — exposed unless a ship repairer’s legal liability coverage is in place.

A ship repairer’s legal liability is specifically designed to fill this gap, covering their responsibility for damage to vessels and other property under their care. Agents who fail to verify that this coverage is included in a policy risk placing them into a program that won’t respond when losses occur.

What Triggers CCC Exposure?

CCC exposure begins the moment a repairer takes physical possession of a vessel and continues until it’s returned to the owner.

Common triggers include vessels in dry dock, boats being lifted by travel lift or crane, vessels stored in the yard between work phases, and any hull actively under repair. A vessel damaged during a lift — even due to equipment failure rather than operator error — could potentially generate a significant claim. Without ship repairers legal liability coverage, that claim lands squarely on the repairer with no insurance backstop.

Underwriting Focus on Vessel Values

Underwriters evaluating ship repairers’ accounts pay close attention to the value and type of vessels under the repairer’s control at any given time. A yard that regularly services high-value yachts or commercial workboats faces a different risk profile than one focused on smaller recreational craft. Concentration risk is a particular concern: When multiple high-value vessels occupy the same yard, a single catastrophic event — a fire, a major storm, a structural collapse — can lead to losses that far exceed declared limits.

Work with your clients to assess maximum probable loss scenarios, not just average vessel values. Underwriting submissions that clearly document the types of vessels serviced, peak inventory values, and storage arrangements give underwriters the information they need to price and structure coverage accurately.

Transit and Sea Trial Exposures

CCC exposure doesn’t end at the yard’s edge. Moving a vessel via water or overland transport extends the repairer’s liability into new environments with even more risks.

Sea trials are a common source of losses — damage to the vessel, third-party collisions, and mechanical failures can all occur once a repaired boat is back in the water. Overland transport introduces commercial auto exposure that may not be adequately addressed in a standard marine program.

Coverage extensions under ship repairers legal liability, protection and indemnity (P&I), and commercial auto where applicable can address these exposures — but only if agents confirm those activities are explicitly scheduled and covered. A sea trial that results in damage to the vessel or a third party can produce a denied claim if the policy wasn’t structured to cover that phase of operations.

Aligning Coverage With Operations

The most common source of underwriting problems for ship repairers isn’t unusual risk — it’s misalignment between what the operation actually does and what the policy assumes it does. A repairer who has expanded into larger vessel classes, added mobile service, or taken on subcontract work without updating their submission may create a gap that doesn’t surface until a claim is denied.

Beyond ship repairers’ legal liability, a well-structured program should also consider: 

• Pollution liability for fuel and hazardous material exposures common in repair environments
• Bumbershoot or umbrella coverage to address the scale of potential losses
• Workers’ compensation structured to address maritime law obligations, including USL&H and Jones Act exposures where applicable

Merrimac Marine Insurance specializes in tailored solutions for ship repairers, with flexible underwriting and deep expertise across the full range of marine liability exposures. So if you’re also feeling a little overwhelmed, not to worry: our access to leading markets allows us to build programs that reflect how repair operations actually function, not just how they looked at their last renewal.

Call us today to discuss your ship repairers’ accounts and make sure CCC exposure is properly addressed in every program you 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.