Boat repairs can sink your auto-repair shop

Since many boats have automotive-type engines in them, it would seem to make sense to have them repaired at a garage that services, well … automotive engines. Such was the case with the owner of an inboard-outboard boat who wasn’t happy with the engine work being done by his boat dealer and who chose instead to have his boat tuned up by his local auto-service station. After all, they had done great work on his cars, so why not?
Shortly after the boat tune-up was completed, he took his boat out and had no issues with how it was running. However, things started to go downhill fast and the boat slowed down while returning to the dock. Soon the area where the inboard-outboard driving mechanism was located sank into the water.
Turns out the seals around the mechanism had been damaged when some oil was spilled on them at the garage, so they didn’t keep the water out of the boat and it eventually sank. When the garage owner found out his coverage didn’t include repairs to boats, it was somewhat of a revelation. But he wasn’t the first, and won’t be the last.
It is not uncommon for garages to repair boat engines or to do fiberglass hull repairs, especially in the heavy-usage summer months where the season is short and the marina operations are at their peak. But should they? To answer this question, we need only to turn to the language that exists in most Garage Keepers Liability coverage, which states fairly clearly, “We will pay all sums the insured legally must pay as damages for ‘loss’ to a ‘customer’s auto’ … left in the insured’s care while the insured is attending, servicing, repairing, parking or storing it in your “garage operations.”
You will note that at no time does the word “boat” appear, nor ATV, snowmobile, small aircraft or futuristic jet-pack, for that matter. Since the words “customer’s auto” and “garage operations” appear in quotes within the policy, this means that these terms are defined within the policy itself and are not left to the reader’s interpretation. If you own a garage, it is important that you understand these two definitions the next time a customer wants to back his 39-foot Boston Whaler Conquest into your garage for needed repairs. “Customer’s auto” means a customer’s land motor vehicle, trailer or semitrailer. The term “garage operations” means the ownership, maintenance or use of locations for the purpose of selling, servicing, repairing, parking or storing “customer’s autos” and that portion of the roads or other accesses that adjoin these locations.
“Garage operations” also include all operations necessary or incidental to the performance of garage operations. Thus, the drafters of the insurance policy included the term “customer’s auto” within the definition of “garage operations” and we know that a boat does not meet this definition.
Although the language appears to be crystal clear, it is still not uncommon to drive anywhere in the United States, particularly near the ocean or where there are large bodies of water, and see more and more service stations, body shops, used car lots and even franchise dealerships with one or more boats on the premises. In many cases these owners assume their garage insurance will cover boat repair. Don’t assume anything, and particularly don’t assume anything as important as what your garage insurance covers and what it doesn’t because the end result could go way beyond just a leaky boat or even the theft of a boat from your garage. I happened upon a story about a garage that normally deals in repairing trucks with diesel motors that agreed to tune up the engine on a boat. The boat was huge and couldn’t be moved into the garage as it was too tall, so it was left outside the garage. Unfortunately, the boat was stolen from the garage location. A claim was put into the owner’s insurer. After paying the insured, the insurance company made a subrogation claim against the garage. Upon forwarding the subrogation claim to its insurer, the garage was informed that it had no coverage for the loss of the boat.
But stolen boats can be replaced. What about if there’s a worse-case scenario? I also recently came upon a sad situation that occurred in Wisconsin. It seems a boat with several people onboard was running at full throttle across one of the largest lakes in the United States. The boat was being used for the first time since having its fiberglass hull repaired at an auto-body shop that regularly did work on damaged fiberglass car bodies, and since the boat had a fiberglass hull, well it just seemed to make sense. The people in the boat were having a great time when the boat’s hull began to vibrate. Suddenly, it shattered like broken glass. No one survived the accident.
Claims were presented to the owner of the automobile body shop which had done the fiberglass-hull repairs. The body shop was told there was no coverage for the boat accident. The garage form has a specific exclusion pertaining to boats.
These are isolated cases and may seem extreme. But as a garage owner, are you willing to take that chance?
Or let me put it to you in simpler terms; if something is sitting in your garage and needs repair – and it will float if you stick it in the water – don’t fix it. At least without speaking with your agent first. •


Robert Mucci, of Wolpert Insurance Agency Inc., has more than 25 years experience in the insurance industry specializing in commercial-risk strategies. He can be reached at 508-459-4760 and robert@wolpert.com.

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