What happens if someone runs into my equipment?
We receive this question often from our seafood clients, especially oyster growers. Every claim is different, but let’s assume a recreational boater ran into an oyster grower’s cages, damaging their watercraft and injuring one of the boaters.
If the cages were properly marked per all applicable laws and regulations, the oyster grower should request compensation from the boater for damage. Why not? The grower wasn’t negligent.
But now assume the boater doesn’t agree and they sue the oyster grower. Does the grower have any protection? The first insurance policy that comes to mind is general liability. On a whole, general liability is not meant to cover waterborne risks, but does provide limited protection. Liability for operating watercraft is completely excluded since that should be covered by a Protection and Indemnity (P&I) policy. However, in our example the oyster grower was not operating a boat, so the general liability policy should protect the grower under such circumstances.
Another policy to consider for such a risk is P&I. This is like an auto policy for boats, specifically tailored for that purpose. However, these policies are also meant to extend over other waterborne operations. A properly written P&I policy should protect an oyster grower if sued under the circumstances of our example. That said, these policies can vary widely in coverage, so ask your agent.
What if my rafts or gear break loose in a storm and slams into someone’s boat?
This is another popular question, however we have never seen such a claim in our office. General liability would not do much good due to watercraft liability exclusions. Yes, one can argue rafts and gear are not “watercraft” and therefore a general liability policy should respond. But needing to argue finer details of a policy at claim time is not a pleasant situation. It is best to have a policy in place with the clear intention of covering your specific risks. P&I is the best coverage to answer this situation.
Interestingly, we recently posed this specific concern to one of our P&I insurance companies while quoting a policy. They indicated they would provide coverage for rafts if the rafts were listed on the policy, but refused to provide any liability coverage for the gear breaking loose and causing damage. You can see that it all depends upon the way an insurance company writes a policy.
Communication is Key
The lesson I’m trying to press is to clearly communicate with your insurance agent your concerns and allow them to work solutions for you. Yes, your agent is a professional when it comes to insurance, but you know your business better than anyone. Protect what you have worked so hard to build. Keep in mind the best (and most affordable) answer may be to mark those cages with extra buoys and ensure your equipment is moored to weather the storm.
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