According to Mariners Insurance Services, buyers face many challenges when choosing the right broker to guide them in the purchase of their new yacht. However, what if you are on the other side of this transaction? Brokers face risks different from those of other businesses in the marine industry and may require specialized yacht broker insurance to protect them from the costs associated with litigation.
Your Duty to the Vendor
As a yacht broker, your primary liability is to the vendor of the boat: You must act with honesty on their behalf to negotiate the best possible sale price. If you fail to meet these requirements or to use a reasonable standard of care during this process, the vendor can hold you liable for negligence.
Showing a boat at a boat show, carrying out deliveries or sea trials and servicing or repairing vendor’s boats are all high-risk activities that you may engage in during a sale. Therefore, some of the many hazards that should be covered by your policy include the following:
- Damage to the property of the vendor, including but not limited to the vessels in your custody
- Bodily harm to clients and employees
- Miscommunications in negotiations
- Errors in the documentation or in advertising and marketing materials
- Pollution or contamination caused by a vessel in your custody
Finally, you should also know that while your employees may be covered by your policy, independent contractors are typically not covered. Therefore, they will need a separate policy.