A boat dealership can be a profitable and rewarding business. Boat dealers need to make sure that they have adequate insurance coverage to protect their business from potential losses. Here are some key considerations when looking for a high quality boat dealer insurance policy.
If you sell boats for a living, it is inherent that you will need to hold inventory on your premise. As a boat dealer, you have attractive boats sitting out on your property 24 hours a day, every day of the year. There are many exposures that come with that inventory including theft, wind damage, and hail. As a result of the assets at risk, you will want to ensure your dealership inventory is properly covered with quality boat dealer insurance.
One of the key features of your inventory coverage is the valuation method. Generally the options will be Actual Cash Value, Replacement Cost with Co-insurance, or Agreed Value. The payment amount can vary wildly depending on the valuation method on your boat dealer insurance policy and any number of scenarios at the time of the loss. It is vital you know your limits and valuation in order to determine if your coverage is adequate.
Demos and Boat Shows
In your business, selling a boat typically requires you to perform a sea trial first. You want to make sure you have coverage for this in-water use of inventory in case the showing does not go as planned. Another aspect of selling a boat is the obligation of exhibiting at boat shows. Whether you put boats in the water or line them up at the Coliseum, boat dealer insurance can provide coverage for prospects and attendees to walk on your boats at every show.
Borrowed Boats and Loaners
Whether or not borrowed boats and loaners are covered under your boat dealer insurance policy can vary case to case. This is an important point for boat dealers, because many dealers both borrow and loan boats in the course of business. If you do not have liability coverage for these types of vessels, however, then you could face serious losses in the event that you become liable for a claim. If an injury occurs on a borrowed boat, for example, you could have to shoulder the full burden of the loss if your boat dealer insurance does not cover these risks.
Marine Operators Legal Liability
Whether you offer service, handle a brokered boat, or hold a sold boat while the owner makes pick up arrangements, you are in the care, custody, and control of a third party boat and are at risk if you do not have the adequate coverage in your boat dealer insurance policy.
Oftentimes, boat dealers will pull a boat from inventory for a day of fun boating. You will want to ensure your boat dealer insurance policy allows for this or has the proper endorsements allowing for this. Otherwise an accident while out on a pleasure trip could trigger an exclusion in your policy that would cause the claim to be denied.
Bumbershoot policies are insurance policies that provide umbrella-type coverage. They cover a number of marine and non-marine lines and are often used for the commercial marine industry.
Bumbershoot policies can be very important for boat dealers, as they provide higher limits of coverage for serious losses that can potentially shutter businesses. Discuss your specific coverage needs with your boat dealer insurance agent, who can help you determine if a bumbershoot policy is right for you.
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