Before summer approaches, boat owners and operators should turn their minds to whether they have adequate insurance in place. Many owners and operators believe that any potential claims brought against them for a boating accident will be covered by their homeowners insurance. However, this is not always the case and water enthusiasts should be aware of exactly when their insurance company will step in and indemnify them.
The case of Snair v. Halifax Insurance Nationale-Nederlanden North America Corp., N.S.J. No. 424 is a close call example of a Defendant who was almost not indemnified because of an exception contained in his insurance policy. In Snair, a tragic boating accident occurred when a Boston Whaler being operated by the Defendant collided with an anchored sailing vessel. The Defendant had taken his parents’ boat out for a late-night drive with his girlfriend, the Plaintiff, after a night of drinking. It was dark and the sail boat was not displaying any anchor lights. The Defendant was found to be negligent in operating the boat and for not keeping a proper lookout. As a result of the crash, the Plaintiff suffered head injuries, rendering her a quadriplegic and incapacitated her for life.
A preliminary issue was whether the Defendant, the insured, could be indemnified on his insurance policy with the Halifax Insurance Nationale-Nederlanden North America Corp. The Defendant called on his insurer to indemnify him under his tenants’ insurance policy. The insurer claimed, just before trial was to commence, that the Defendant was not entitled to coverage on the basis that the policy excluded cases of bodily injury suffered by persons who resided in the insured’s household. The insurer claimed the Plaintiff and the Defendant were living together at the time of the accident; therefore, there was no coverage.
The Defendant and the Plaintiff in the action had been living together in the past, but it was found that at the material time, when the boating accident occurred, the two were not living together. The Plaintiff was found to have moved out just a few months before the accident occurred. If the court found that they had been living together, the policy would not have indemnified the Defendant for the claim brought by the Plaintiff. However, the court stated that the indemnity issue was moot, because the insurer would have been estopped from relying on the exclusion clause since they had been defending the action up to the point of trial.
The following are considerations for boat owners and operators before venturing out this summer:
- Ensure your homeowners and/or tenants insurance covers you for claims arising out of the ownership, use or operation of the watercraft;
- Some policies limit coverage to certain types of watercrafts – make sure your particular boat is covered by your policy and there are no restrictions;
- If you are an operator and not the owner of the watercraft, ensure your homeowners or tenants insurance covers any potential claims against you;
- If you lend your boat to another, make sure your insurance policy or the operator’s will cover any potential claim against you; and
- Be aware of any exclusion clauses contained in your insurance policy – these might limit the type of watercraft covered or, as in the case of Snair, it may disentitled you to coverage against claims brought by certain individuals.
Most importantly: always drive safe, with a proper boating license and don’t drink and drive!