Do boat mfg's carry liability insurance???

[gggforce34]

A friend of mine is looking into buying an established boat manufacturer. He tells me that the majority of mfg's dont carry liability insurance. I dont see how that is possible. As a businessman I would never build boats that went "fast" without coverage. Could what he tells me be true? He's talking about some big companies like skater, stv, etc. what gives??????????

[Wile E. Coyote]

I wondered about that myself. Then it dawned on me. If you have no liability insurance there is basically nothing to sue. that is to say, who wants to sue a manufacturer and wind up with a building, some molds and smelly chemicals. That and the actual cost of insurance would be prohibitive in most cases. I work in an industry (aviation) where insurance is paramount. In the year 2000 5 million liability cost my company 80,000 per year, in 2001 it jumped to 300,000 for 1 million! do the math.

[Raceman]

"If you have no liability insurance there is basically nothing to sue. that is to say, who wants to sue a manufacturer and wind up with a building, some molds and smelly chemicals. "

That's not the way it works in the real world. Most people who own a business have assets, both in the business and personally, and frequently the 2 are inner-twined. Jugdements allow a successful plaintiff to attach accounts receivables and other assets, and for all practical purposes can make a corporation's owner personally liable, because they are frequently unable to walk away from other liabilities of the corporation such as bank debt with personal guarantees signed.

Also, there's a big difference between liability insurance and product liability insurance. While I don't know that boat manufacturers generally carry product liability coverage, it'd be hard to imagine that anybody building anything in todays litigious happy society would risk not having coverage. Even successfully defending a frivolous lawsuit can easily run in the hundreds of thousands of dollars. I don't think that anybody in their right mind would run any business without general liability coverage.

[Gordie Miller]

FIRST, we kill all the lawyers. We now return you to your regularly scheduled programming.

[Vicious]

As far as I'm concerned in todays world not carrying liabilty insurance is financial SUEICIDE!!!!

[Raceman]

I agree with you on that Vicious.

Gordie, I sho' like yo' thinkin. Isn't it incredible that in many healthcare related situations, the government requires certificates of need (often impossible to get) before additional resources can be added, yet the law schools spit out lawyers in record numbers every year. The sad reality of it is that there are several hundred thousand more lawyers in this country than doctors.

[Wile E. Coyote]

That's not the way it works in the real world. Most people who own a business have assets,

Raceman

For the most part I agree, but in the big picture we're usually talking MILLIONS when an insurance company gets sued. I say this from industry experience.

I work/worked at an aircraft propeller shop which was usually instrumental in NTSB crash teardown investigations in our region (Southeastern US and all points south) for general aviation. We did the propeller part of a crash investigation. One of the major things that happens when a crash takes place involving a fatality is everyone gets sued, unless they dont have insurance. I've seen it happen. The lawyers do not want to be involved in liqudating a company. There are bigger fish to sue Yes the airframe, engine, and propeller manufacturers have insurance, but the shops working on them may or may not.

A relatively small boat manufacturer may or may not have liability insurance, but you better belive Mercury, OMC, Teleflex, Gaffrig, and all the others probably do.