Entrepreneurs living on or near America’s abundant coastline have many options when it comes to starting a new business. Many choose to take advantage of the proximity to water by starting boat rental operations. Renting personal watercraft, including boats, jet skis, or even larger liveaboards, can be a lucrative business venture, provided business owners understand the risks inherent in these operations. Personal watercraft rental insurance is the foundation upon which risk management is built. In this guide, we’ll explore what your clients need to know about the boat rental business in order to help ensure a secure financial future.

Location and Market: Key Factors

Where a business is located and the type of market that business can tap into are two of the key factors that help determine business success. In the boat rental business, these factors can influence the entire operation, including the types of watercraft for rent, the pricing structure, and even the regulatory requirements for the business. It is imperative that business owners carefully assess locations and markets before venturing into business.

Ideally, a personal watercraft rental business should be located within easy navigation of large bodies of water. This can include access to oceans as well as larger lakes or reservoirs. High volumes of tourists visiting the area are beneficial; tourists are the lifeblood of many boat rental companies. The characteristics of waterways in the area can also help business owners determine what types or styles of watercraft to rent. On larger lakes or oceanfront locations, powerboats and personal watercraft (PWCs) like jet skis are popular choices. Yachts with overnight or weekend accommodations also make sense for rentals near larger bodies of water. In less open locations, such as on rivers or smaller lakes, small powerboats, paddleboats, and craft like kayaks or canoes may make more sense.

Permitting Requirements

Every state has its own regulations when it comes to boat operations. There may also be federal regulations in place. For rental business owners, obtaining the required permits for rental operations is an important obstacle to overcome. In some locations, multiple permits may be required of business owners in the personal watercraft rental industry, including:

  • General business licenses
  • Mooring or anchoring permits
  • Commercial passenger licensing
  • Fuel delivery and vessel servicing permits
  • Water access permits

Securing all necessary licenses and permits may take as much as one to three years in some locations; for those wishing to start a boat rental company, patience is key to surviving the long and complex permitting process. It is a good idea to secure the help of legal professionals with experience in maritime law to ensure that the business meets all permitting requirements.

Insurance Options for Boat Rental Business Owners

Most business owners understand the role of insurance in protecting business assets. Insurance policies, including personal watercraft rental insurance, are a crucial part of the overall operation, helping to provide coverage against risks both expected and unforeseen.

Rental operators may need more than one insurance policy to provide the appropriate coverage. In addition to business owners’ policies, owners should explore comprehensive insurance protection. Personal watercraft rental insurance offers three major areas of coverage:

  • Watercraft Coverage – protecting against property damage or bodily injury while a renter is operating one of the rental boats.
  • Hull Coverage – protecting the watercraft itself from damage or loss during rental operations.
  • Premises and General Liability – providing insurance coverage against numerous risks while customers are on and around the business property, including slip and fall risks as well as liability exposures on the part of business owners.

Business owners should seek insurers that are prepared to offer tailored solutions. Not every business operation will be the same, and some businesses can expect to face unique risks that one-size-fits-all policies may not adequately cover. An insurer with experience in personal watercraft rental insurance is a valuable resource to business owners; this insurance can help set the stage for a bright and secure business future.