Do I Really Need Liability Insurance for my Pleasure Boat?
It’s not a big boat and it didn’t cost a ton of money. I only plan to take it on the water a few times this year, so why should I have to worry about any kind of boat insurance? After all, what could possibly happen while I’m taking a short cruise or fishing?
This is a common sentiment among many people that plan to take small trips this year. However, the truth is, boat insurance is very important and without it, you could be in some serious trouble.
What is Boating Liability Insurance?
There are two main components of liability coverage. Both of these coverages provide valuable protection and they come as a package in Canada.
Property Damage Liability
Property damage liability covers damage that you might accidentally inflict on other people’s boats or property. For example, suppose you were out boating and a collision occurred. True, this is a rare instance, but it sometimes happens, especially if you are in foggy conditions or boating at night.
If you vessel rams another vessel, your property damage liability coverage will pay for the damages. This protects you in several ways. For example, you will not have to be responsible for damaged to the other craft. If you damage an expensive boat, you could be liable for thousands of dollars in repair expenses.
What if you have no property damage liability insurance and you cannot pay for the damaged? The other party can take you to court and sue you. You may end up with a judgement against you and you could be forced to pay, or you may have to sell some things that are near and dear to you.
Bodily Injury Liability
This is the most important coverage that you can have. It will pay for medical expenses if you passengers or people on there vessels are injured as the result of a boating accident. Medical liability is so valuable because without they protection you could be sued for expenses or end up losing everything you own. Of course, most people believe these things only happen to others, but the truth is, they can happen to anyone. Here is an example.
Your boat accidentally rams an expensive vessel and the owner is critically injured and several passengers receive injured. The owner becomes permanently disabled and not only sues you for medical bills, but for pain and suffering and lost income. The settlement could easily be in excess of $500,000 and where will you get the money?
How Much Liability Should I Take Out?
There are no laws that require you to buy boat insurance, so it is not mandatory. However, there are laws that dictate what your limit of liability is on the water. Those are $1,000,000 for bodily injury and $500,000 for property damage. For simplicity liability is bought in $1,000,000 segments. To be safe, one cannot have too much liability coverage and you should have as much as you can afford. You should consider a minimum of $2,000,000 and it is not uncommon to take out more, depending on your boating needs. Be aware of any broker that tells you "$1,000,000 is enough for your boat" the law says clearly it is not. Therefore it will be clear that the broker is not knowledgeable of about the laws applicable to your activities.
Liability insurance is usually the least expensive when bought in conjunction with coverage on your boat as well. In most cases for Fairway, $2,000,000 of liability is Included at no additional cost.
You can talk to us, as an experienced insurance broker, to get the best coverage option in the area. As a broker we have access to many different insurance companies and are there to compare policies for you. We can let you know what coverage options are available and help you choose the right insurance for maximum protection.