People often ask me, “What’s the difference between a Tug boat and a Push boat? What exposures should I be looking for? What coverage forms are designed to address the exposures?”
- A Tugboat is a powered vessel that either pulls (tows) another vessel, pushes another vessel or guides another vessel while tied to the vessel’s side (“on the hip” as it’s known).
- A Push boat typically only pushes another vessel, as its hull design doesn’t lend itself to pulling another vessel (particularly in rough waters). Whether it’s a Tugboat or a Push Boat, however, the coverage needs are often identical.
If your client’s Tug/Push boat is charged with the duty of moving other vessels for a fee, your client assumes Care, Custody and Control of the other parties’ boat. Accordingly, any damage to the boat while being moved for a fee typically falls to the owner of the Tug/Push boat. To address this exposure, your client should consider Towing Liability Insurance.
The standard American Institute Tug Form provides this coverage up to the Tug/Push boat’s Hull limit. A potential down-side on relying on the Tug Form for Towing Liability comes when the Tug/Push boat in question has a low Hull limit (such as a $50,000 tug boat moving an $800,000 barge; the Tug Form will only cover damages up to $50,000). For this reason, if the Tug Form limit is less than the Property & Indemnity (P&I) limit, consideration should be given to remove the Towing Liability from the Tug Form (physical damage) and add it to the P&I (liability) form which often times provides higher limits (typically $1,000,000 or more). This way, when the $50,000 Tugboat inflicts $350,000 worth of covered damage to the $800,000 barge, the $1,000,000 P&I limit responds.
The American Institute Tug Form also includes Collision Liability coverage (for when the Tug/Push boat and/or its Tow come into contact with another vessel and cause it to be damaged). Returning to our hypothetical $50,000 Tug and $800,000 barge, let’s say the barge breaks free and careens into a Marina damaging many boats. The basic Tug Form will again only provide up to $50,000 of coverage for damage to boats struck by the Barge. For this reason, if the P&I limit exceeds the Tug’s Hull limit, one should consider deleting the Collision Liability from the Tug Form and write it instead under the P&I form.
Another common exposure is Crew exposure to cover Bodily Injury to the Tug/Push boat’s employees in the event they are injured while in the employ of the vessel. Where the Tug/Push boat is used determines how these people should be covered. If the Tug/Push boat ever navigates in Navigable Waters (such as, but not limited to, Lake Champlain, the Great Lakes, Atlantic/Pacific oceans, but not land-locked lakes), injured crew can bring suit against the vessel in the event of their injury (or their families can bring suit in the event of the crew member’s death). This means a potential lawsuit for your client. Having the P&I endorsed to cover a specified number of crew (a crew warranty) can extend the P&I for Bodily Injury claims to crew members.
For a more in-depth analysis of your clients’ Tug/Push boat coverage options, give your Acadia Ocean Marine underwriters a call.
Acadia Insurance is pleased to share this material with its customers. Please note, however, that nothing in this document should be construed as legal advice or the provision of professional consulting services. This material is for general informational purposes only, and while reasonable care has been utilized in compiling this information, no warranty or representation is made as to accuracy or completeness. Hypothetical facts and coverage descriptions are not intended to imply that coverage will always exist. Coverage determinations will vary depending on the specific facts and the terms and conditions of the policies.