Covered Losses and Boat Builder Insurance

Boat in the water

As most boat manufacturers understand, upon completion of building a new boat, there are a lot of potentially hidden issues that can go unnoticed. While they may test the boat strenuously and determine that all parts are working properly and that the boat is seaworthy, there is the possibility that problems may surface later on.

When a boat owner reports a loss or malfunction of some type to the manufacturer, boat builder insurance would be required to cover the cost for repairs, and the company could also be liable for any damages or resulting losses. In many cases, a hidden defect can be viewed as either a manufacturer’s defect, in the sense that it was due to a mistake of the manufacturer, or a latent defect.

Most marine insurance covers a wide array of losses

Unless there is a specific exclusion that applies (this is known as an “all risks” policy), any losses are considered covered. Most policies provide a broad range of coverage, while some may exclude a loss caused by a manufacturer’s defect by excluding coverage for damages caused by a manufacturer’s “defect in design.” At the same time, many policies exclude latent defects, but cover any damage that is a result of a latent defect, if that defect was the cause of the damage to the insured property.

Testing the propeller for maximum efficiency

A boat propeller is perhaps the most important component of a boat and is most critical to the overall safety and performance of the vessel. Having the right propeller in working condition allows the boat to properly navigate the waterways. The engine should run within the manufacturer’s designed RPM at Wide Open Throttle (WOT) or the propeller may need replacing. This is the proper way to test the propeller performance:

  1. Make sure gas tank is full, but keep the overall load in the boat slightly lighter than the maximum.
  2. Start up, and run boat for approximately 5 minutes to ensure engine is properly warmed up.
  3. In a wide-open spot on the water, with little to no boat traffic, give the engine full throttle and get it up to maximum speed.
  4. When at maximum speed, note and record the RPM.

If the RPM at full throttle and speed is outside of (either below or above) the manufacturer’s recommendation, it is time to replace the propeller. Boat builder insurance can pay for the replacement cost for a new propeller.


photo credit: cc