Boat renters will face new insurance requirements in Florida

Boat renters and rental operators will face new insurance requirements in Florida from the start of 2023, and insurance businesses have leapt in with new products to plug the gap in the state and further afield.

Three words in Florida’s Boating Safety Act, “and the renter”, have reportedly caused insurance driven consternation for watercraft rental businesses.

Under new rules, boat liveries must demonstrate that they and renters of their vessels have valid insurance cover from January 1 to obtain annual permits. As per requirements, operators and their customers must have cover of at least $1 million per occurrence and $500,000 per person when the vessel is being rented.

Boating rental campaigners had alleged that insurers were not on board with the changes and that they could lead to soaring insurance costs and a capacity absence, ABC and others reported.

Concerns were strong enough that Florida’s Fish and Wildlife Conservation Commission (FWC) has pledged it will take an education rather than enforcement approach for six months, according to reports.

Nevertheless, rental operators still risk stranding themselves in a difficult position if they do not access insurance cover from the January deadline, an insurance professional has cautioned.

That have followed campaigners’ warnings, at least two insurance initiatives have jumped in to offer cover, vQuip and partner One80 Intermediaries among them.

The idea was, there was a huge hole in rental markets where the businesses themselves would hold these large commercial insurance policies and million-dollar limits and insure themselves.

The product was first envisioned with a $300,000 limit in mind, but Florida’s requirements led to an upwards revision.

The new rules are intended to boost safety and trim down rogue operators.

Florida saw 2,461 people injured in boating accidents in 2021, with rentals accounting for 18% of vessels involved in incidents, according to FWC figures.

Before this law, renters assumed a huge amount of liability through most rental contracts – and were historically excluded by commercial policies, leaving a gap in coverage.

Injury statistics show boat rental carries risk. A decision not to insure any activity is a decision to retain, or effectively self-insure.

by Nataly Kramer