Page 24: of Maritime Reporter Magazine (October 2013)

24 Maritime Reporter & Engineering News ? OCTOBER 2013 321INSURANCEProtect vs. Hidden Exposures that Can Sink a Business Ship Repairers and Marine Equipment Installers Operating on both land and water, ship repairers and marine equipment install-ers tackle a variety of tasks from general maintenance and repair, to upgrading electrical systems, to in-stalling state-of-the-art navigational systems. Along with these tasks comes a wide array of maritime risk expo-sures, both large and small, for which the business owner needs to be ad-equately protected.The tasks of an electrician or welder are challenging enough on their own, but try to do this work on a vessel at sea or in a shipyard, and the technician will Þ nd that the hazard level rises dra- matically ? from making sure that all facets of the systems work together as they should, to the increased Þ re risk hot welding presents to the safety of the vessel. As a result, only professional installers with a maritime background should be considered for such work. Vessel owners and shipyards should be sure to contract only with ship repairers and installers who have comprehensive insurance that will not only protect that business, but also provide coverage for the vessel or shipyard if the installer is found responsible for any damage. The exposure for vessels in their care, cus-tody, and control, along with any other potential third-party property damage must be addressed. While most ship repairers and install-ers recognize these exposures, good coverage is not always easy to Þ nd for high-hazard businesses like these. Some insurers shy away from under- writing these businesses due to the high-risk nature of their work. Others may be willing to insure these maritime service companies, but may not have the marine expertise ? or the appetite ? to understand and provide coverage for some of the ?hidden? exposures of the business. By understanding how underwriters assess risk, and by imple-menting proper risk control measures, marine businesses will have more op-tions when it comes to choosing an in-surer that has the expertise to uncover the hidden exposures threatening their business. The Underwriting Process An insurer with extensive ocean ma-rine experience will closely examine risk exposures facing the business and place particular emphasis on Þ ve key criteria: Work Performed Some companies may choose not to insure repair businesses that undertake welding jobs because the ?hot? work carries too much Þ re risk, or the tech- nical repairs and installation of critical systems on a vessel may be too great. When assessing the work performed, underwriters will examine a number of factors, including how they approach these complex tasks, how they docu-ment their work, and what safety pro-grams they employ. LocationOn shore, marine repairers and in-stallers may have to be concerned not only with the vessel on which they are operating, but also with any surround-ing property that could present liability exposures. In water, underwriters will look at the parts of the vessel where the work is being performed ? whether it is a control room, high atop the vessel, or underwater beneath the vessel ? and assess the risk there along with the po-tential risk of damaging any adjacent vessels or property. ExperienceExperience should always be a criti-cal factor in hiring someone for any job, and the same holds true when it comes to insuring marine repair businesses. Underwriters will consider whether the technicians are skilled and knowledge-able and what level of experience they have on similar projects. While proper training is key for a good ship repair- er, often the time spent on the job can build his or her level of expertise and reduce his likelihood of an accident. Considerable experience in more haz-ardous marine repair work like welding or heavy engine or system repair may By Charlie Pugliese, Travelers Ocean Marine, Hull & Liabilities Practice Leader MR #10 (18-25).indd 24MR #10 (18-25).indd 2410/2/2013 3:52:56 PM10/2/2013 3:52:56 PM