This article is reprinted from the February, 2005 issue of Soundings-Trade Only, and reflects the author’s recollection of a panel discussion at the International Marina Conference in San Diego, California. Mr. Schwenk was one of the panelists asked to address liability issues in the marina industry. The suggestions given were necessarily of a general nature, since there were attendees from all over the world. In brief, those suggestions were: 1. Maintain best professional practices, as those reflect the best thinking in the industry; 2. Add language to one’s principal contracts to insulate your business from claims (these are “exculpatory clauses”); and 3. Make a timely, appropriate response to any problem that arises, or a small problem may spin out of control.
Liability Issues: Fix the Problems, Avoid Lawsuits
Maintaining the “best professional practices” is called the surest way of staying out of court
By Lindsey Savin/Staff Writer
Soundings Trade Only, February, 2005
Liability issues are among a marina operator’s greatest concerns, and a panel of experts at January’s International Marina Conference in San Diego offers up some advice on how to cope with them.
The panel, moderated by Mick Bettesworth of Marina Developments Ltd. in the United Kingdom, included Mark Yearn of Universal Insurance Services; Dirk Schwenk of the maritime law firm Baylaw, LLC; and Jopie Helsen, owner of Sailor’s Wharf Yacht Yard in St. Petersburg, Fla.
Schwenk said prevention is the best approach. Maintain the “best professional practices” possible, he said, and, “Fix the problems.”
Being certain you understand your insurance policies – what is covered and what is not – is also critical, Schwenk said. “You need to have a good idea what’s in your contract.”
“Each facility has its own characteristics and can’t be put in a magic insurance or liability box,” Yearn said. Still, he suggested, owners and operators can seek out specialists who can customize a facility-specific insurance program.
Because a customer can reverse charges on a credit card for up to 18 months after a transaction is made, Helsen suggested marina owners consider not accepting credit cards as a method of payment, or at the very least encouraging customers to use some other form to square up their bills.
“Taking almost anything other than a credit card is preferable,” Schwenk agreed.
Another suggestion raised by panelists was marina owners should always make sure the “added insured” box is always checked on a marina patron’s or independent contractor’s proof of insurance when presented to the facility owner. “No good landlord would lease property to someone without proof of insurance, and [the renter should] add the landlord as an added insured,” said Schwenk.
Schwenk also suggested marina owners consider including exculpatory clauses in both their customer and supplier contracts. These clauses, he said, “can have a chilling effect” on prospective lawsuits. “They can stop some claims before they even start,” he said.
“Your contracts are the strength of your business,” echoed Yearn. “The stronger your contracts are, the better off you’re going to be.”
In the end, probably the best preventative measure a marine owner can take to ensure limited liability is to fix problems at the facility as they occur and not wait for them to snowball.
Timely, appropriate response to those things is 99 percent of the battle,” Schwenk concluded.