The limitations of standard business insurance for marine operations
For marine operators in Muskoka, Georgian Bay, and Lake Simcoe, the water is where business happens. But a commonly-held misconception is that a standard Commercial General Liability (CGL) policy provides all the necessary coverage these businesses might need. In reality, standard commercial policies explicitly exclude most marine-based exposures.
That can leave important gaps in protection, especially for businesses that rely on boats, docks, equipment, or other marine operations.
Commercial marine insurance is designed for those risks. It takes into account the unique exposures of working on the water and the legal considerations that may not be addressed by standard land-based coverage. Having the right commercial marine insurance can help protect your business when a standard policy is not enough.
When a boat in your care Is damaged
To understand why specialized coverage is critical, consider a common scenario for a boat repair shop in Midland or Orillia.
- The Incident: A vessel is in your shop for a routine engine overhaul. A fire breaks out due to a faulty electrical connection on the boat, damaging not just that vessel, but two others nearby in your storage yard.
- The Risk: Without Ship Repairers Legal Liability (SRLL), your standard business fire insurance will likely deny the claim because the damaged boats were in your “care, custody, and control”—a standard exclusion in CGL policies.
- The Solution: SRLL is designed specifically to cover these “third-party property” gaps, protecting your business from potentially millions in repair and legal costs.
The increased risks of charter & tour operations
If you carry passengers for a fee, your “Duty of Care” is significantly higher than that of a personal boat owner. A simple slip on a wet deck or a collision in a high-traffic area like Lake Couchiching can lead to complex litigation.
This is where Protection & Indemnity (P&I) becomes your most critical asset. Unlike standard liability, P&I is a specialized maritime coverage that handles:
- Passenger Injury: Medical expenses and legal defence for onboard accidents.
- Wreck Removal: The mandatory (and expensive) removal of a sunken vessel if it poses a hazard to navigation.
- Collision Liability: Damage caused to other vessels or fixed structures like docks and piers.
- Pollution Liability: Covers cleanup costs and legal fees if a fuel spill or other accidental discharge occurs.
Ontario winter lay-up checklist
In Ontario, the transition from open water to winter storage is considered to be a high-risk period by insurers. Most commercial policies include a winter lay-up provision, which mandates that vessels be winterized and stored safely on land by a specific date.
To ensure your coverage remains active during the off-season, follow this risk-mitigation checklist:
- Strict Adherence to Dates: Ensure all commercial vessels are out of the water by the date specified in your policy to avoid “breach of warranty”.
- Fire Mitigation: Most winter losses occur due to fire in storage facilities; ensure your site meets local fire codes for marine storage.
- Snow Load Management: Commercial marine property insurance should be reviewed to ensure your specialized docks and piers are covered for ice damage and heavy snow loads.
Why 100 years of local experience matters
Marine insurance is a highly specialized field. At McLean & Dickey, we work with marine operators to understand their business, identify potential exposures, and help arrange coverage that fits their operations. Serving marine operators since 1922, our brokers understand the specific insurance requirements of Transport Canada for commercial vessel licensing.
Contact McLean & Dickey today for a comprehensive risk audit of your marine operation.