I am thinking of taking on a sailing partner. Any thoughts regarding liabilities and how to avoid/limit them? Is there a way to limit one partner's exposure if the other partner has an incident? Your suggestions and advice much appreciated.
Partnership Liabilty
- Thread starter markh
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Request an "endorsement" on your policy for your sailing partner. That is what I have on my Hunter 31 through Boast U.S.
Consider your required liability limit based on severity and risk of an accident In m case, my marina requires $500.000 minimum for berthed boats.
Consider your required liability limit based on severity and risk of an accident In m case, my marina requires $500.000 minimum for berthed boats.
If you own the boat, you can dictate whatever terms you want. Adding someone else to your policy can be done, but it won't fully protect you. For example, what if he has an accident, you make a claim on your insurance, and as a result, your company jacks up your premiums, or worse, drops you entirely. You would want your partnership agreement to provide for him to pick up the additional costs of the insurance.
Just one of many issues that lurk in these types of arrangements. Think also of how to handle fuel costs, maintenance obligations, and things as mundane as who is responsible for making sure the head tank is pumped. This and other sailing sites are filled with stories from people who have had horrific and fabulous experiences with sharing the expenses of owning a boat. Be careful, and think things through before making a decision.
Just one of many issues that lurk in these types of arrangements. Think also of how to handle fuel costs, maintenance obligations, and things as mundane as who is responsible for making sure the head tank is pumped. This and other sailing sites are filled with stories from people who have had horrific and fabulous experiences with sharing the expenses of owning a boat. Be careful, and think things through before making a decision.
http://forums.catalina.sailboatowners.com/showthread.php?p=858938&highlight=partnership
From a search on "partnership", none boat type.
Lotsa reading if you do that search. You could also try www.cruisersforum.com and search there, too. That website makes me gag, it's go so many different categories, but you're sure to find one that'll work. Maybe not mechanical or electrical though.
From a search on "partnership", none boat type.
Lotsa reading if you do that search. You could also try www.cruisersforum.com and search there, too. That website makes me gag, it's go so many different categories, but you're sure to find one that'll work. Maybe not mechanical or electrical though.
There was a really fine book published some time ago about how /why/when to own a boat in a partnership. It's out of print, but some searching may turn up a copy.
I recall the title as something like The Boatowners Guide to Co-Ownership (?) or somesuch name like that.
Anyone here recall it??
I remember that the authors said to have a written contract with maintenance provisions and $$ spelled out and provisions for replacing or buying out a partner.
LB
I recall the title as something like The Boatowners Guide to Co-Ownership (?) or somesuch name like that.
Anyone here recall it??
I remember that the authors said to have a written contract with maintenance provisions and $$ spelled out and provisions for replacing or buying out a partner.
LB
Partnership Liability
The suggestions about dealing with the risk through liability insurance, and handling the arrangement under a limited liability company agreement (with the company owning the vessel) are good ones.
Under partnership law in most states, the partners are "agents" for one another. This means, most notatably, that the negligence of one in the normal course of the partnership's affairs (here, owning and using the vessel) creates "vicarious" liability-- ie, the "innocent" partner may be liable too, for the actions of his partner. This dilemma is far less severe in most instances where the organizational structure in use is a limited liability company.
As for liability insurance, an increase in premiums that may result after my partner has created a claim would be the least of my worries. Having no coverage at all is a far greater problem.
The suggestions about dealing with the risk through liability insurance, and handling the arrangement under a limited liability company agreement (with the company owning the vessel) are good ones.
Under partnership law in most states, the partners are "agents" for one another. This means, most notatably, that the negligence of one in the normal course of the partnership's affairs (here, owning and using the vessel) creates "vicarious" liability-- ie, the "innocent" partner may be liable too, for the actions of his partner. This dilemma is far less severe in most instances where the organizational structure in use is a limited liability company.
As for liability insurance, an increase in premiums that may result after my partner has created a claim would be the least of my worries. Having no coverage at all is a far greater problem.
We've had several different partners. One couple left the partnership because they liked sailing so much they bought their own boat. Another left because his new girlfriend hated sailing. We've had partners for several years now and I have to say, it's worked out great so far. (Knock on wood.) As far as insurance, it's written in the agreement that if the partner does something that causes the insurance to go up, they are responsible for the increase for the next five years.
We have a contract that I think protects all parties pretty well, but no contract can be iron clad, and even if it is, there's always the hassle of having to enforce it if necessary. So my experience is this:
First, I trust my instinct. There was one guy, for instance, who we almost took on as a partner but something just told me it wasn't right. So I declined him. Others I've barely done a background search on and it's worked out great.
Second, I try to approach it as a real partnership, and I really try to make it work, including being somewhat flexible in the terms of the partnership if it's not a major thing. I think that way there is a better attitude all around, rather than the attitude of "I want to figure out how I can squeeze as much as I possibly can out of this other person." Instead I think all around the attitude is, "we're trying to work together; the other person is a pretty decent guy and I'm going to reciprocate."
It works for me... so far.
We have a contract that I think protects all parties pretty well, but no contract can be iron clad, and even if it is, there's always the hassle of having to enforce it if necessary. So my experience is this:
First, I trust my instinct. There was one guy, for instance, who we almost took on as a partner but something just told me it wasn't right. So I declined him. Others I've barely done a background search on and it's worked out great.
Second, I try to approach it as a real partnership, and I really try to make it work, including being somewhat flexible in the terms of the partnership if it's not a major thing. I think that way there is a better attitude all around, rather than the attitude of "I want to figure out how I can squeeze as much as I possibly can out of this other person." Instead I think all around the attitude is, "we're trying to work together; the other person is a pretty decent guy and I'm going to reciprocate."
It works for me... so far.
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