Glossary

Marine insurance has unique terminology. We are providing the following glossary as a way for our customers to better understand the most commonly used terms in the industry.

Actual Cash Value valuation (ACV)

Cost of new less depreciation.

Average Monthly Inventory

Used for boat dealer coverage in our program, this refers to the average inventory values of boats, motors and trailers over the course of the year. Add the month-end values for 12 months and divide by 12. This, not the "limit", is what drives the premium for that coverage.

Bumbershoot

Much like an umbrella policy, except it also covers over the Marina Operators Legal Liability (MOLL) exposure, as well, and is actually designed for usage over marine exposures.

Cable and Winch Anchoring System

Used with floating dock systems, this allows docks to be tethered to the anchor weights on the bottom and allow for the changes in water depth that occur over the course of the seasons.

CGL Broadening and CGL Enhancement Endorsements

An endorsement to the General Liability coverage in our program. A copy of these endorsements are available upon request. The form numbers are 4212915 and 4212916.

Dealer Coverage

Boat dealer coverage for boats, trailers, motors, appurtenances and accessories that are for sale. Does not include land vehicles.

Dock-o-minium

This is an arrangement wherein slip-holders do not just rent a slip to keep their boat, but actually own the slip. Often, this is found with residential condo associations.

Equipment and Tool Coverage

Coverage for the tools and equipment, such as hi-lows, travel lifts, tractors or other equipment used around a boat yard to move, launch, remove or work on boats.

Employee Benefits Coverage

Coverage for "wrongful acts" committed in the "administration" of the insured's "employee benefit program" by the insured. "Wrongful act" is defined as "any negligent act, error, omission or breach of duty."

False Pretense Coverage

Known sometimes as "trick of device coverage", this is for boat dealers and covers the instance of someone causing the insured to voluntarily part with the covered property by trick, scheme or under false pretense for inventory items acquired stock in trade from a seller who did not have legal title.

Hull Coverage

This is coverage for physical damage to owned boats, but not "dealer coverage", on boats for sale. This is for work or rental boats.

Liquor Liability

This is for liability arising from alcoholic beverage sales. Exposure could arise from beverages sold "packaged", as in a marina store, or from served drinks in a restaurant. If you sell or serve alcoholic beverages, unless it is specifically covered on your policy, you could have "no coverage" if someone is injured in a subsequent alcohol-related accident.

Longshoreman and Harborworkers Act Coverage
  • This coverage provides benefits to dockside workers engaged in the service of a vessel (including providing a safe port for the docking of the vessel). This coverage is similar to State Act WC, but the stakes are higher — premiums and benefits. Benefits are not strictly limited to items such as “State average weekly wage” or specific benefits for specific types of injuries. Claims are more similar to tort lawsuits and many benefit distributions are decided by the courts.
  • Coverage under the act is determined by:
    1. Facility is located on the navigable waters of the U.S.
    2. Employee is a person engaged in Maritime Employment, including Longshoring, any Harbor Worker, including ship repairman, ship builder, and ship breaker but excludes: Clerical, Camp, Club or Recreation Duties, Museum, Retail Outlet, and Employed by a marina but not engaged in the maintenance, repair or expansion of marina and individuals employed to build, repair or dismantle any recreational vessel under 65’ in length
Marina Operators Legal Liability

General liability has an exclusion for damage to the property of others (customers, for instance) in your care, custody or control—this "exposure" creates what is known legally as a bailment. This is along the lines of the more familiar situation of an auto garage business which has a customer's car in for repair. This is technically a bailment. Bailment (or entrustment of property of others) at a marine risk is normally the result of the following kinds of operations:

  • Slip rental
  • Dry storage
  • Repair
  • Launching and removal
  • Fueling operations
  • Transportation

The typical deductible (amount the insured will have to contribute to a loss) is $1000, but can be higher, especially if they have had a history of loss problems in this area, or if the insured is willing to take a bit more risk for the reduction in premium that comes with the higher deductible.

Personal Water Craft (PWC)

Jet skis and Wave Runners

Property Broadening Endorsements

These are endorsements available within our program which include a number of valuable property extensions. Form numbers are 411-0792 (Silver) and 411-0909 (Marina). A copy of these endorsements is available by request.

Protection and Indemnity

Coverage for liability from in water operation of watercraft by the insured or employees in connection with customary operations of a marina, boat dealer or yacht club.

Replacement Cost Valuation

The cost to replace a property item such as a building, contents or a dock today.

Title Errors and Omissions Coverage

This is a coverage for dealerships which pays because of a negligent act, error or omission in the execution of title registration papers which cause improper identification or non-identification of the mortgagee or legal owner.

Truth In Lending Coverage

A coverage for a dealership for a negligent act, error or omission which results in failure to comply with the TRUTH IN LENDING ACT PROVISIONS OF THE CONSUMER CREDIT PROTECTION ACT (PUBLIC ACT 90-32; 02 STAT.14B).

Weight of Ice and Snow Coverage

Dock coverage may or may not cover the peril of weight of ice and snow, depending on underwriting discretion. If this peril is covered, it will have its own deductible and underwriting requirements. This is of concern mostly for floating docks which have roofs where large weights of snow and ice may accumulate possibly causing collapse and consequent claims.

This document is intended as an informational and educational reference only. While we make all efforts to ensure the accuracy of the information provided, North American Marine Underwriters Inc and Citizens/Hanover Companies do not take responsibility for errors or omissions made while referring to this content.