Running Charters during the Covid-19 crisis - some thoughts about coverage - SaltwaterCentral.Com

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adammeyer
Posts: 56
Location: Wilmington NC
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Sat Apr 18, 2020 10:59 am
Some thoughts on chartering during current Covid 19 crisis

I preface this by saying I am not a claims adjustor, nor an underwriter, nor a practicing attorney. I am just an experienced, authentic marine insurance specialist with over 25 years in the niche, who simply cares about his clients - I don't want anyone out there without the coverage they've paid for. I can't tell anyone what to do, I can only advise what I feel may be the consequences of chartering under a Stay At Home order. Here we go:


There’s been a good bit of chatter lately across the various social media platforms about whether charters may take place, be they guided with one guest, or offshore with 6 guests. While I want to weigh in on the “can they take place” issue as related to coverage, I adamantly agree that, at this time, they “shouldn’t take place.” I believe that social distancing, at this time, is going to help us conquer this plague on our society, our economy, and our way of life. And it leads to a shorter route to getting back to all of this. As to the “can” aspect, and would the captain have coverage under his/her policy for loss: Whether that loss be simple physical damage (hit a log and tear off a lower unit), or personal injury (guest falls and breaks an ankle, or puts a hook through their hand), I think, is immaterial. Or if a guest came down with the virus after the charter, and a personal injury attorney attempted to make a case that they caught it aboard your vessel – unlikely as that may actually be to happen, I’d not rule it out. Simply too hard to prove they caught it while on the charter, or that the captain was legally liable for it, etc. The wrench in the works here is the Stay At Home orders that have been put in place by various government authorities and, for purpose of this discussion, let’s presume that they have been within their legal rights to do so for the protection of the community. Aside this presumption, let’s presume that charter operations are not deemed an “essential activity” (I’m sure each ordinance or order has it’s own peculiarities, maybe in one spot they don’t exclude chartering, but another location they do…here, let’s say chartering is ruled not an essential activity). Every marine policy I’ve ever read has a very standard exclusion, that applies to all charter ops of the insured, that reads something like this: Dishonest, Illegal, or Intentional Acts Exclusion: We do not pay for loss or damage caused by the dishonest, illegal or intentional acts of any covered person, or any person to whom your insured property is entrusted, regardless of whether or not such person is convicted of such an act by a criminal court. If the captain takes a charter out when a Stay At Home order is in effect, and charters are not essential activities as allowed by his/her local authority that issued said order, then the captain is, technically, perpetrating an “illegal” act. Would it be morally or ethically right for a carrier to deny coverage here? Probably not, but could they lean on that in a court of law to deny coverage if they chose to, and have a good shot at winning that argument? You bet they could. The language in your policy may vary slightly from this, but the intent, and the effect, is the same.

Some policies go even further and add in conditions on the “Use of the Vessel”. They say they’ll cover for commercial use as defined in the policy (charter operations), and your recreational use, and they even cover you when you are aiding a vessel in distress (so long as you aren’t paid for it). But here’s the kicker: “It is further warranted that the vessel be used in full compliance with all current Coast Guard and local laws and regulations” (or some variant of this language). If the “local laws and regulations,” at this time, prohibit non-essential activities, this language couldn’t be any more clear that violating those laws and regulations means you are not in compliance. And therefore, under the terms of the policy, have no coverage.

This is serious business when it comes to coverage questions. Again, you bust a lower unit and you’re not likely to see any guff from the adjustor, maybe a reminder that you aren’t supposed to be chartering if Stay At Home order in place and you aren’t essential activity. However, you have a large liability claim, an injured guest or a sunken boat, and you should be mindful that, if you are in violation of local laws and regulations, or you’re participating in an “illegal activity” (under current Covid crisis), you may find you have no coverage.

Please don't take this as any sort of ruling, or that your particular insurance carrier would take this stance. These are simply my opinion, and interpretation of policy language that I've read and interacted with for the past 25 years. I recommend every boater, particularly charter captains, read their policy (all the way to end). Look for "General Conditions" and "Exclusions" in your policy. They may be found at the very end, or they may be up front. Check your "Liability" section especially - that's your coverage for injured guests. If you are unsure, call your Agent - that's their job anyway, to interpret that language, and contact your particular insurance carrier for their thoughts/position on the matter, in writing (email is good), advising whether you do or do not have coverage for charters run under a Stay At Home order (and you may need to provide the language of that order, pertaining to your location, which may easily be found on the web).

For the guides, and guide associations, contact your reps in State and local government. Ask for your status, ask for an exception to the essential activity rules for your area, whatever it takes to ensure that running the charter is "legal" under your local laws and regulations. You get that in writing, and I cannot see the insurance company denying a claim that occurred during these strange days.

Okay - enough soapboxing today. Several of my guide friends reached out to ask this question, and it warranted a proper answer. I hope this helps in some way. Y'all stay safe, be well, hold on to your sanity and just think of the fish we're gonna catch when we can get back on 'em...no pressure all these days, I think they'll be chewing hard!

Tight lines,

Adam
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Adam B. Meyer, Esq.
Maritime Insurance International
Wrightsville Beach NC
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Bloodworm
Posts: 86
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Sat Apr 18, 2020 12:14 pm
Excellent post Adam,
When the stay at home order came down I filled out the online form to be considered essential, and was denied in an officail form from Roy Coopers office. It did state that I could continue to do business as long as I could follow the guidelines of separation, number of people in one gathering, able to sanitize surfaces and hand washing. I decided that I couldn't follow those guidelines and have not run charters since the "stay order". I hadn't thought of the insurance side of the equation but it makes since that there are a lot of GREY areas associated with a global pandemic. I am looking forward to things getting back to normal and having a good season even if it is a little late in its start.

Thanks Adam for the insight, that's why your the BEST!

Capt. Rick
Living Waters Guide
  
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rdnkvet
Posts: 1425
Location: Wallace, NC
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Sat Apr 18, 2020 3:58 pm
Excellent posts from Adam and Capt Rick!
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KatfishKayak
Posts: 297
Location: Duplin County, NC
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Sat Apr 18, 2020 5:06 pm
Good stuff that I hadn't considered.

I closed my charter calendar when this started to look bad, about the same time the Governor issued the first stay-at-home. I'm fortunate enough to have a day job, though, so charters aren't my bread and butter right now. I can imagine it was a harder choice for the folks who make a living at it... and I know a bunch are still running. It's hard to criticize a man for keeping the bills paid, but I don't think it's a very wise choice.

I do think the most basic responsibility of a captain is the safety of the passengers and crew. Taking a boatload of strangers aboard for 4 to 8 hours at a time when we aren't testing and there is no vaccine is a health risk to them as well as to the crew.
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Capt_Dave
Posts: 12180
Location: Cape Fear, NC
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Sat Apr 18, 2020 5:44 pm
The Rover will be tied to the dock for the time being.....period!

Dave
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MealOnReels
Posts: 616
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Sat Apr 18, 2020 6:18 pm
Thanks to all who are doing their best to end this.A WB boat ramp charter starts with hand shakes(assumed) and ends with the Capt. hugging the kids for money shot with fish,hugging wife,more hand shakes with her husband and kids(Witnessed).Shake My Head  
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Capt_John_C
Posts: 1149
Location: Beaufort, Nc.
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Sat Apr 18, 2020 6:37 pm
Like Rick, I also petitioned the NCDOR for my status as to whether I was essential or not. Got back the same response as Captain Rick. Those that continue to operate are playing fast and loose with the rules and it could cost them everything. I hope that the fishing public takes notice to the Captain's that continue to put money ahead of following the law and the safety of their customers and realize that it is probably a bad idea to trust them with your money or life going forward. I had a pile of trips booked in April , most of which consisted of customers coming from New York City, New Jersey, Philly, Dc. and other Covid Hotspots. That being said I probably could have turned Carteret County into it's very own COVID hotspot. My boat has been tied to the dock and will continue to be until things change drastically.
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chumbucket
Posts: 2135
Location: Hampstead
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Sun Apr 19, 2020 12:41 pm
Great post. Thanks to Adam for his insight and the captains for sharing their experiences. I cancelled my May charters. Hoping this clears up in time for June trips, but only time will tell. I'm not taking anyone until it's legit to do so.
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sprayman58
Posts: 43
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Mon Apr 20, 2020 8:47 am
Consider this, we live in a society that has too many lawyers ! Law suits are a always just around the corner for anything we do. They can't prove it was contracted on your boat you say. Doesn't matter, justice is the last thing you will find in a court of law. It's what will it cost to make this go away is the question you should be asking. You have insurance you say, guess what, you will not after this is case. When your policy is cancelled, all the insurance companies know about it. Then your butt is swinging in the wind with no liability insurance, nobody wants your business after you get cancelled for about 10 years. I know what I'm talking about too ! Got the tee shirt, merit badge and all the rest of the grief to go with it. Consider this also, It's not fun to stand in court with some lawyer pointing his finger at you and claim you did this, no matter how innocent you thought you were.  
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transmaster
Posts: 30
Location: Richmond
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Mon Apr 20, 2020 7:05 pm
How about port risk only discounts when boats can’t be used?  
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captrod
Posts: 48
Location: Carolina Beach , Wrightsville Beach
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Tue Apr 21, 2020 7:31 am
Guys when the stay at home was declared I stopped running trips.
Have cancelled over 20 trips to date.
There is no way to stay socially distanced on my boat while on a charter.
Appreciate all the captains taking the same position.
There are some running trips.
I do not agree feel we should all do our part to help get this under control.
Appreciate all the friends that posted and agree with them 100%.
Stay safe stay healthy.
Capt. Rodf
OnMyWay Charters
  
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paynefish
Posts: 420
Location: Beaufort
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Tue Apr 21, 2020 7:58 am
And the key here is negligence in order for the liability to trigger. Unless you knew that you had the virus, or someone on your boat has had it and you operated anyway, that would be negligent. If you aren't negligent, and the policy doesn't trigger, you still have to defend yourself if sued. Cost of defense is not going to be cheap and the fact that you were operating while everything was going on is not going to bode well in the eyes of a jury of your peers. No win on this one except to not go. Hopefully everyone will continue to do as they should so we can come out of the other side of this and see what the new normal will resemble.
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rdnkvet
Posts: 1425
Location: Wallace, NC
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Tue Apr 21, 2020 5:29 pm
Oregon Inlet crews don’t seem to get it
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Capt_Dave
Posts: 12180
Location: Cape Fear, NC
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Tue Apr 21, 2020 6:57 pm
The issue is if you have a claim....any claim......and you are complining with all star and federal Regis you have no insurance.

I have said it several times that the Rover will be to the dock till the government order is lifted.

Dave
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Running Charters during the Covid-19 crisis - some thoughts about coverage - SaltwaterCentral.Com