Tuesday, April 23, 2019


Axess was a 31 ft. Rinker outfitted with Mercury engines that was part of a fractional ownership program run by SailTime Chicago. The member was an owner of the boat and allowed SailTime Chicago to rent out the vessel when not in use. As part of the contract, SailTime was responsible for maintaining Axess. SailTime relied upon Skyway Yacht Works to perform these maintenance services.  

The vessel was about seven miles offshore Chicago, IL when a clanking noise was heard. Shortly thereafter the engines failed, and the boat came to an abrupt stop. The high-water alarm sounded, and steam was coming out of the engine compartment. They quickly discovered the boat was taking on water. All persons aboard the vessel quickly went to work; two bailing water, one deploying emergency flares and the fourth attempting to call for help. As they came to the realization that the boat was going to sink, they knew they needed to abandon it. They put on life vests, gathered up flotation cushions, and jumped into Lake Michigan’s 53° water. A male victim was found disoriented and hypothermic around 6 a.m. by a charter boat captain. He was the only survivor.

Inspections of the vessel by several experts determined that the boat sank because of a catastrophic failure of the port side gimbal bearing. Axess was run aground by another SailTime Chicago member in 2012 and was taken to Skyway Yacht Works for inspection and repairs. The repairs performed by Skyway did not include replacement of the port side gimbal bearing. The product safety manager for Mercury Marine, the engine company, stated that the safest and most prudent response would have been for Skyway to replace the transom assembly and its components, including the gimbal bearing. An expert witness stated that if Skyway had replaced the port side transom assembly and gimbal bearing, the sinking of the Axess would not have occurred.

A $27.9 MILLION settlement was reached.

How much coverage do you recommend to your Boat Yard/Boat Repair clients?

Ian Greenway

Thursday, March 28, 2019

Is This Longshore….?

Since sundown today, I have had three emails “Is this Longshore….?”  In each case, the answer was probably no.  This was an above average evening for such emails, but there are not too many days where there is not at least one.  Whilst individual subjects vary, the result is the same.   When we offer our opinion that something is probably NOT Longshore why should anyone purchase the coverage (or why should any agent recommend the coverage)?

#1 Defense Costs
Unlike a GL policy, in the WC world, no coverage = no defense. Regardless of whether we think the employee falls under Longshore, they can bring that claim. It is easy to spend six figures on legal fees even when we win!
To add Longshore on an IF ANY basis to most WC policies costs less than $250 and that provides unlimited defense costs coverage! What a bargain!

#2 Rogue Verdict
Longshore is constantly expanding, and what we consider not Longshore today, might become so in 3 years when today’s injury goes to trial. Or worse, a judge that just wants to find someone to pay!

#3 Uninsured Longshore Subcontractor
Many risks who might be excluded themselves, such as Marinas or Municipalities, hire Contractors or Subcontractors who work for them who have Longshore exposure but do not buy the right coverage. Under the Longshore act, that passes directly back to the principal, even though the principal might be excluded themselves! They need Longshore coverage! Even more obscure is the subcontractor who used a PEO/Leasing company for their employees but neglects to “name” a subset of their employees.

#4 E&O prevention
No further words needed.

Even when a risk is probably not Longshore, if the exposure is borderline, it's just not worth the risk of not covering Longshore (or Admiralty).

Ian Greenway

Friday, February 15, 2019

CMIP and the National Alliance

“I’m Late, I’m Late for a Very Important Date” is one of my earliest memories – a quote from Lewis Carroll’s book Alice’s Adventures in Wonderland.   It was spoken by the White Rabbit now made famous by Disney.

As I write this I feel very much like the White Rabbit in finally being able to formally release the two CMIP seminars for April 9th & 10th at our favorite Renaissance Hotel in International Plaza in Tampa. 

We will be offering two concurrent seminars:
Insuring Vessels Owners & Operators and
CMIP Graduate Seminar

To register or for more information please go to http://iimis.org/Schedule/CMIPSeminarTampa

There is, what I trust you will agree, a good reason for the delay and that has been the now completed agreement with The National Alliance to take over the administration of CMIP for us.   We will be sending out a detailed announcement shortly, but this gives us an incredible opportunity to use their expertise in running top-class insurance seminars, along with the specialty knowledge of our faculty, to build on 12 years of CMIP and expand that further.  More on that later.

What it means for you is IF you are a CIC, CRM or CPRM you can earn your annual update credits for any of those designations at our CMIP seminars from now forward.

In addition, down the road, we will be introducing other methods of training.

More detail on these exciting developments for CMIP and CIC’s future will follow.

Ian Greenway

Monday, January 7, 2019

The Importance of On-Hire Surveys for Bareboat Charters

We cover a great number of risks where the Insured bareboat charters the vessel from the vessel owner.  Typically, most carriers require on and off hire surveys, but they make sense even when not required.

A bareboat charter, sometimes referred to as a demise charter, is a type of chartering or hiring of any kind of vessel, with no crew.  It is up to the company taking possession of the vessel to operate and care for the vessel.  It can be compared to renting a car from a rental agency, such as Hertz or Avis. It is up to the party in possession to properly operate and ensure the property being given to them is in good condition.

An on-hire survey does not need to be all that complicated. It can be as simple as walking around the vessel with the owner at the time of hand off, completing a checklist, and taking pictures of existing damage. A professional surveyor might be useful and helpful as the vessel value or complexity increases. 

It is also, very useful to have an off-hire survey when the charter is complete to document the condition the vessel is returned.  Having an on-hire and off-hire survey can simply show the difference in the condition that occurred for the duration of the charter.  With this, any disputes should be easily remedied as there will be an abundance of proof to justify or disprove any arguments in changes in condition.

The survey becomes most important when considering deductibles.  When there are six separate “dings” on the surface of a barge, was that six separate occurrences, therefore six different deductibles? Or was it a single occurrence and just a single deductible?  Having a clear plan when the vessel is hired is a great way to ease the issues when the claim comes.

Whether it is required or optional, it is always in the best interest of the Insured to have a clear document of the condition of the vessel at time of hire, so when the vessel is returned in the same condition, everyone is happy.

Mark Greenway
Director of London Market and Special Placement