Industry Update: Riding the Wave in the Marina Marketplace

By Thomas Murphy | February 24, 2014

As the $4.2 billion marina industry continues to expand, independent agents who seek to leverage their specialization and partner with experienced carriers have a significant opportunity to grow their businesses.

With the growth of the marina industry have come significant advancements in their operation. When we think of a traditional marina, we picture a facility where boaters simply berth their vessels.

Today’s marina provides a wide range of facilities and should be seen as a total hospitality business rather than just a stand-alone operation. Marinas are offering full service restaurants, fueling stations, repair facilities and rental operations.

“Generally speaking, as a business grows so does the risk a business owner faces. While marina owners are very knowledgeable, very often they aren’t fully aware of the insurance risks that could put their businesses in jeopardy,” said Darren Sliney, underwriting manager with North American Marine Underwriters, an underwriter of package business for marinas, boat dealers, yacht clubs and boat yards, headquartered in Lynnfield, Mass.

Today’s marina provides a wide range of facilities and should be seen as a total hospitality business rather than just a stand-alone operation.

“Independent agents and brokers like us who specialize in the marina business can provide more value by offering deeper insight and counsel to our customers and providing more tailored insurance protection.”

For example, in addition to standard commercial property and general liability, marina owners today should consider:

  • Docks and Piers Coverage: Marina owners have a duty and responsibility to provide a safe and secure mooring. Docks and piers coverage provides physical damage coverage to property over the water.
  • Marine Operators Legal Liability: This covers both the boats as well as marine items of others that are in the care, custody and control of the marina, including fueling operations and transportation.
  • Protection and Indemnity: A marina’s liability towards its workers arising out of the operation of any vessel (i.e. towing, launching, demonstrations).
  • Bumbershoot or Umbrella Coverage: This coverage allows marina owners to purchase higher liability limits than offered under standard contracts.

Changes in Marinas Today

Advances in dry rack storage facilities and dock materials are also changing the way marina owners run their businesses.

By stacking boats on racks in warehouses and other large structures off of the water, marina operators can handle far more boats with less waterfront than a conventional wet slip marina.

In addition, using refined composite dock materials or even concrete allows a dock to withstand the elements more effectively than wood. This creates a stronger, more durable dock.

“With the many changes in the business, marina owners face many new and significant risks that, left unaddressed, could have dire financial consequences,” said Phil Begeman, underwriting manager with Harbor Risk, an underwriter of marine insurance, headquartered in Grand Rapids, Mich.

For example, marinas are subject to various state and federal environmental regulations concerning direct water pollution from boaters, contaminated storm water runoff and dredging operations. Marinas also need suitable water depths to stay in business and marinas owners across the country are feeling the effects of low water levels.

“The impact can range from minor disruptions when moving boats, lost income for having to cut a season short, or the additional expenses incurred when having to dredge a marina,” said Begeman.

Marina owners face a great deal of exposure to potential losses. From the liability of maintaining a marina to the potential property damage to buildings, other structures, contents, docks and piers, the need for comprehensive commercial marine insurance coverage is critical. These new and emerging exposures for marinas create opportunities for agents who know the industry, who can offer valuable expertise and offer customized solutions with industry leading products.

Expertise

The most successful agents and brokers in the marina marketplace are those who can offer unique expertise, knowledge, and counsel.

In addition, they provide quality insurance products and services through a leading carrier, along with additional risk solutions and support, from online educational webinars, to print resources, and on-site training sessions.

Most importantly, agents and brokers who specialize in this business are very close to the marine industry and understand the latest trends and developments in the market. Whether it is the latest regulatory change or a new environmental exposure, agents and brokers are uniquely positioned to provide value counsel and support to their customers. They are investing in the marina market and understand the risks their clients face.

The growing and continually changing marina industry is creating significant growth opportunities for well positioned agents and brokers. By investing in their own capability, partnering with the right carrier, and staying abreast of the marina industry, the best, most committed agents always will find ways to capitalize on opportunities and win.

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