How To Get Commercial Boat Insurance

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Commercial boat insurance is a type of coverage you may need if you operate a maritime business or otherwise use boats for commercial activity. You can get coverage for liability, physical damage and more from both traditional insurance providers and companies that specialize in boat and marine insurance.

Read below to learn what is covered by commercial boat insurance and whether you might need to purchase a policy.

Key Takeaways

  • Commercial boat insurance generally isn’t required by law but may still be useful for any business that uses a boat for commercial activity.
  • Boat insurance generally costs between 1% and 3% of the boat’s value per year but the cost may be higher for larger boats.
  • The core pieces of commercial boat insurance are liability coverage, also known as protection and indemnity insurance, and physical damage coverage, also known as hull and machinery insurance.
  • Commercial boat insurance may also include coverage for excess liability, lost cargo, pollution and wreckage clean-up, equipment rentals and more.
  • While many traditional insurance companies sell boat insurance, not all of them offer commercial policies, so maritime business owners may need to buy a policy from a company that specializes in commercial boat insurance.

What Is Commercial Boat Insurance?

Commercial boat insurance, also known as commercial marine insurance, provides coverage for the owner of a boat in case their property is damaged, someone else’s property is damaged or someone is injured in connection with the policyholder’s commercial boat activity.

One of the main functions of commercial marine insurance is to provide coverage for cargo throughout the entire shipping process. If you have inland marine insurance, your cargo will be covered even when it is being transported by land rather than by sea.

Who Needs Commercial Boat Coverage?

The following types of businesses and people commonly need commercial boat coverage:

  • Businesses that ship overseas like manufacturers, importers and exporters
  • Marine service providers like stevedores and shipyard employees
  • Marine transportation providers like cruise lines
  • Other maritime professionals like fishermen

Boat insurance is required by law in Hawaii for all boats that are at least 26 feet long.[1] Meanwhile, boat insurance is also required in Arkansas and Utah, but only for motorboats and personal watercrafts.[2] Otherwise, commercial marine insurance generally is not mandatory throughout the United States.

Nevertheless, you may be required to show proof of boat insurance to dock your boat at a marina or receive a loan if you are financing your boat. Even if it’s not required of you, purchasing commercial insurance for your boat can still be a wise investment to provide yourself with a financial safety net in case of a costly accident.

What Types of Vessels Are Covered by Commercial Boat Insurance?

You can usually purchase commercial boat insurance for a wide array of vessels including the following types of boats:

  • Commercial fishing vessels
  • Yacht charters, dive boats and other rental boats
  • Unmanned underwater vehicles, ocean observatories, tourist submarines and other submersibles
  • Cargo ships and container ships
  • Tugboats
  • Cruise ships
  • Ferries
  • Motorboats used for water skiing, wakeboarding and wakesurfing
  • Excursion vessels
  • Oil tankers and barges
  • Dredgers
  • Survey vessels and other research vessels

How Much Does Commercial Boat Insurance Cost?

In general, the cost of insuring a boat for a year is between 1% and 3% of the boat’s value.[3] For example, a small fishing boat worth $30,000 would most likely have an insurance premium in the $300 to $900 range. However, these percentages can be higher for yachts and other large ships.

Some of the factors that can impact the exact cost of your business boat insurance include the following:

  • Age and specifications of the boat
  • Size of the boat and the number of passengers it’s intended to hold
  • Intended use of the boat such as the amount of distance it’s expected to travel and the locations it will traverse
  • Experience, safety record and claims history of the policyholder
  • Coverage types and limits of the policy

Commercial marine insurance prices may increase dramatically as the scope of your business increases. For example, a small business looking to insure a single tour boat will naturally pay far less than a multinational shipping corporation that needs insurance for a fleet of ships.

Commercial Boat Insurance Types

Below is an overview of some of the most common types of coverage that a commercial boat insurance policy might include.

Protection and Indemnity

Commercial marine insurance liability coverage, also known as protection and indemnity insurance, provides coverage in case the boat owner is found liable for injuring someone or damaging their property. For example, liability coverage might pay for repairs to a dock at a marina after a mooring incident or cover medical bills and lost wages for a contractor who was injured while loading cargo onto a ship.

It may also cover funeral expenses for a crew member that died on the job and legal fees if one of the above situations escalates into a lawsuit. In general, protection and indemnity insurance broadly covers any liability risk not already covered by a workers’ compensation policy or the collision clause of a hull policy.[4]

Hull and Machinery

Hull and machinery coverage insures the main structure of the boat and attached equipment against physical damage. It may also provide coverage for the vessel’s detached equipment and any personal property that the policyholder stores on the boat.

Ocean Cargo

Ocean cargo insurance is necessary to cover any items you are transporting by sea. With ocean cargo insurance, you should be covered if cargo is damaged by factors outside of your control like bad weather or atmospheric conditions. It even covers damaged cargo if your crew is at fault due to rough handling or improper loading.[5]


Bumbershoot insurance is a type of umbrella insurance policy specifically for maritime industries. If you have a liability claim that exceeds the limits of your protection and indemnity insurance, your bumbershoot insurance could step in to make up the difference.

A business owner may be able to buy ocean marine insurance that bundles the above four coverages into a single, convenient policy.

Workers’ Compensation

Commercial marine insurance should also include workers’ compensation for employees who are injured or become ill due to their work activity. Under the Longshore and Harbor Workers’ Compensation Act, maritime businesses are required to provide continued payment to employees who are hurt on the job, along with reimbursement for medical bills and rehabilitation services and, if the employee died, survivor benefits for their dependents.[6]

Equipment Rentals and Sales

Equipment rental and sales coverage is a type of business insurance that could be particularly useful if your business involves renting out charter boats. It could help pay for repairs or replacement parts if your boat breaks down.

Uninsured Watercrafts

Much like uninsured motorist coverage, uninsured watercraft coverage pays for your losses if they are caused by a boater without boat insurance. This could include paying to repair the hull of your ship and other property on board that was damaged or covering medical bills for any passengers or crew members that were injured in a collision.

Pollution Liability and Wreckage Removal

Your commercial boat insurance policy might include pollution liability insurance that can pay for an environmental clean-up. This type of coverage is especially important for oil tankers since they risk contaminating water sources or aquatic environments in the event of a crash.

Even if your vessel doesn’t pose a substantial risk to the environment, wreckage removal coverage can help you retrieve and dispose of the parts of your boat after a wreck. However, your insurance company may not pay for wreckage removal unless the government requires you to clean up the shipwreck.

How To Get Commercial Boat Insurance

Business owners can get commercial boat insurance from traditional insurers like Travelers, Chubb and The Hartford or specialty insurance companies like Markel, Maritime Insurance International and Global Marine Insurance. In addition, companies such as State Farm and Nationwide can provide both boat and inland marine insurance but may not offer the full range of coverage types you may need to protect your maritime business.

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Does my business need commercial boat insurance?

Boat insurance is only required by law for certain vessels in Hawaii, Arkansas and Utah.[1][2] Even so, anyone who uses at least one boat for commercial purposes likely needs commercial boat insurance to protect their business.

Do I need commercial boat insurance if I run a tour vessel?

You may need commercial boat insurance if you run a tour vessel since it will provide coverage in case someone is injured on your tour, your boat causes damage to someone else’s property or someone sues you.

Does marine insurance cover liability?

Commercial marine insurance should include liability coverage, also known as protection and indemnity coverage.


  1. Hawaii Division of Boating and Ocean Recreation. “Mandatory Vessel Grounding Insurance.” Accessed March 30, 2023.
  2. Boat Ed. “Do I Need Boat Insurance? (Answers to the Top 9 Questions).” Accessed March 30, 2023.
  3. Boatsetter. “How Much Is Boat Insurance?” Accessed March 30, 2023.
  4. International Risk Management Institute. “Protection and Indemnity Insurance.” Accessed March 30, 2023.
  5. Travelers Insurance. “Ocean Cargo Insurance.” Accessed March 30, 2023.
  6. U.S. Department of Labor. “Longshore and Harbor Workers’ Compensation Act Frequently Asked Questions.” Accessed April 3, 2023.

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