2018 CAMM Conference: April 4-6. National Museum of Bermuda. Ocean Marine Insurance Overview

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1 2018 CAMM Conference: April 4-6 National Museum of Bermuda Ocean Marine Insurance Overview Presented by Paul M. Cullen of Boston Marine Insurance Services, LLC

2 What is Ocean Marine Insurance? Some common types of Ocean Marine Insurance Include: I. Hull Coverage (Physical Damage to Waterborne Vessel) Typically insured on an Agreed Value Basis, often determined by survey value II. Protection & Indemnity (Liability For the operation of Owned and Non-Owned Vessels) If navigating on Federal Waters, typically includes liability for bodily injury to both paid and volunteer crew Includes Liability for bodily injury to passengers III. Marina Operator s Liability / Safe Berth Liability Liability for physical damage to non-owned vessels docking at a museum s premises, or temporarily located at museum premises. IV. Environmental Liability V. Excess Marine Liability / Bumbershoot Liability

3 What Exposures are often unique to Maritime Museums? I. Owned Vessels used as: Floating Exhibits Historical Demonstrations Passenger Excursions Patron/Member use or rental II. III. IV. Boat Building & Restoration, including model boat building classes and donated boats held for sale, in addition to traditional boat shops. Educational Programs, Sea Scouts, Field Trips, etc Non-owned vessels docking at museum facilities, hosted boat shows, etc V. Employees working on board vessels VI. Vessel Pollution

4 Why Ocean Marine Insurance? Standard insurance forms often contain exclusionary language for waterborne or care/custody exposures: I. General Liability standard exclusions include: Watercraft liability arising out of ownership, operation, etc. Exclusion for damage to property in your Care, Custody, and Control Employee injury exclusion Pollution Exclusion/Limited Coverage II. Workers Compensation often Excludes Jones Act, etc III. Fine Arts Coverage: Waterborne vessels may not be given proper insured perils or recovery costs IV. Umbrella Policies typically exclude watercraft liability and bodily injury to employees

5 Why Ocean Marine Insurance? Hull Insurance Physical Damage to vessels on Agreed Value basis Partial Loss often adjusted on new for old basis without depreciation Salvage Exposure costs to recover vessel following a loss Sue and Labor costs to preserve vessel from further loss i.e towage Protection & Indemnity (P&I) Liability for damage to fixed and floating caused by an owned/operated vessel Liability for removal of wreck when compulsory by law Liability to crew & passengers

6 Why Ocean Marine Insurance? Marine General Liability Based on Standard ISO verbiage, but amended to include marine related liability sections. Marine Operators: damage to non-owned boats in a museum s care, custody, and control (recreational) Wharfinger s Liability: damage caused to commercial vessels docking at museum facilities Marina Operators P&I: Coverage for a Museum s liability for operation of non-owned vessels Vessel Pollution Responds for both the threat of spill following a casualty/ cleanup costs following a spill US Coast Guard can fine a vessel owner $10,000 per day for the threat of a spill, following a marine casualty Vessel Pollution underwriters have dedicated environmental contractors to assist with clean-up

7 Why Ocean Marine Insurance? Excess Marine Liability / Bumbershoot Liability: Specifically insure excess P&I, Vessel Pollution or Marina Operations Bumbershoot Liability policy often can be include excess non-marine insurances such as Auto Liability, General Liability, etc Claims Handling Marine Exposures are often governed by Federal Law; marine insurers regularly work with Admiralty Attorneys across the country. Vessel Crew Claims: A vessel owner has strict obligation to pay maintenance and cure, and failure to do so can result in punitive damages; Jones Act lawsuits require special handling Particular Average claims for Hull claim; new for old; marine surveyors, etc. Pollution: prompt cleanup is essential

8 Thank you!