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Panama Canal Question

Discussion in 'Yacht Captains' started by Freebird, Oct 25, 2021.

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  1. Freebird

    Freebird Member

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    I’ve been contacted by a US resident/owner to move a Broward motor yacht from FL to Mexico via the canal, and oddly enough, he has zero insurance on the boat. I’m accustomed to those who self-insure, but not to this point.

    I’m not even sure I want to move the boat without it, but is liability insurance required to pass through the canal?

    I have no experience with the canal but assume it may. Then again, none of the US canals or locks require it, so it may not be an issue. I just know I don’t want to be on the hook personally if something goes goofy.
  2. olderboater

    olderboater Senior Member

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    Well, who do you think will be the one held in jail until the damage you create is paid for?

    There is no specific requirement for insurance. You are responsible for any damage to the locks and either a deposit is made or a bond through a line of credit. Typically pleasure boats just make a deposit and it's promptly returned.

    First time, I wouldn't pass through without using a local agent. Several great ones available.

    Now as to taking the job, hasn't the owner already told you all you need to know about them and their level of responsibility? You really want to be the front man to it? The one on site to be held responsible while they attempt to reach the owner? Such an owner is also they type to do other things half-way such as repairs and maintenance and even including paying you. Well, you already know what you're getting into if you do it.
    captjohn22, T.T. and Freebird like this.
  3. Freebird

    Freebird Member

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    Yeah, I was just hoping to find another reason for him to at least purchase liability insurance as I’m not setting foot onboard until he does.

    He’s an older gentleman with decades of boating experience, but I was basically shocked when I asked about a life raft with a current certification. According to him, we didn’t need one because there was a Boston Whaler tender, and it’s unsinkable. I’m like, no disrespect, but IT sinking is not what I’m worried about! LOL He and one other guy will be along for the trip.

    I’d like to think ANY Captain would point out the need for such things, but he’s obviously not thinking this thing through. Sometimes too much good experience causes complacency to the point of dismissing all the bad things that can happen on a trip like that.

    At least a sat phone was on his must have list as to say goodbye to all the loved ones if things go sideways. I honestly wouldn’t even sign on for this one if not for the canal transit. Hopefully he had a full survey when he purchased the boat some 6-8 months ago as I want to see that too. It’s a ‘77 model boat which obviously wasn’t cared for that well and has been sitting. Been there, done that, but not in foreign waters.

    I think I’m talking my way out of this one, but we’ll see. No insurance, no life raft, no up to date EPIRB, no survey, no go. I’ve already had my life flash before my eyes once this year, and that was more than enough.
  4. olderboater

    olderboater Senior Member

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    Old junky boat in bad shape and know it all old man owning it.
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  5. Pascal

    Pascal Senior Member

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    And I bet the fire system hasn’t been inspected in years. That usually goes along the expired rafts.

    Run Forrest run!
    WeBeBoatin likes this.
  6. Freebird

    Freebird Member

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    Talked to his buddy who has spent about six weeks on the boat. He too is an experienced boater and says the boat is in nice shape. We all know nice is a four letter word that can be synonymous with another four letter word, but apparently the new owner has dropped some major bucks into it.

    I’ll give him a call in a bit (he’s on the west coast) and see where we stand with insurance and plans for a raft. He mentioned having an umbrella policy, but I don’t think that extends to boats. We’ll see.
  7. olderboater

    olderboater Senior Member

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    Umbrella only extends to things covered by other policies and typically requires them being mentioned. For instance ours would cover any items not fully covered by our Marine Insurance.
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  8. leeky

    leeky Senior Member

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    I'm not an insurance expert, and, according to GEICO, neither are you. According to GEICO, what I've highlighted above is NOT true. Here's what GEICO says about umbrella insurance:

    "Umbrella insurance provides coverage beyond the limits of your other insurance policies, or for claims that may not be covered by liability policies. Umbrella insurance generally provides liability coverage for:


      • Injuries
      • Damage to property
      • Certain lawsuits
      • Personal liability situations"
    Be careful of the advice you give. The "know it all old man" (your words) may have everything covered insurance-wise.
  9. Freebird

    Freebird Member

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    Not trying to argue as I simply don’t know, but your/GEICO’s bit reads to me as covering things a liability policy may not. No liability policy equals no umbrella coverage as I read that.
  10. olderboater

    olderboater Senior Member

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    I will stick to my answer. While umbrella policies may cover some things not insured, such as libel or slander or false arrest, in most areas of liability it is an "excess" policy and covers excess over other policies. I said "typically" and typically if you have no marine liability insurance then it will not cover marine claims unless it has a specific rider saying it does. Geico further states
    1. Umbrella insurance may provide coverage when your homeowners, auto, and boat insurance policies limits are exhausted.
    2. Umbrella insurance provides coverage for claims that may be excluded by other liability policies including claims like false arrest, libel, slander, and liability coverage on rental units you own.
    It's the first of those two points that marine insurance fits under. From another site about what umbrella policies do not cover. "Boats are another common area of exclusions. Some companies cover certain sizes or types of watercraft only, while others don’t cover them at all unless you have an existing boat insurance policy."

    From Farmer's, "Umbrella insurance provides additional liability coverage — over and above the limits on your auto and other personal liability policies." Their standard policy only covers your primary residence, two motorized vehicles, small sailboats and motorboats under 50 hp and everything else is optional.

    From Forbes, "Umbrella insurance provides “excess liability insurance” (meaning additional coverage) beyond the liability insurance already in your auto, homeowners and/or watercraft insurance policies. It’s for expensive situations where medical bills or repairs exceed your “base” auto, home or boat policies." and also from Forbes, "Umbrella insurance kicks in when your “base” liability limits have been reached." Then they add areas that umbrella generally covers in addition and those areas are:

    -Libel, defamation or slander. For example, if you post something defamatory about someone else to a website, you could be sued.
    -False arrest, imprisonment or detention
    -Malicious prosecution
    -Wrongful eviction or entry
    -Invasion of privacy

    I've had an umbrella policy for 20 years and it's very specific including mention of it's exclusions. I've had many discussions of umbrella policies with insurance experts, both risk management professionals and brokers, and they've always made it clear that the umbrella was limited.

    Umbrella does differ from strict "excess" policies as they often have "follow form" clauses and umbrella policies typically do not so if a basic policy excludes something, an umbrella may still cover it. When an umbrella covers starting with dollar one as I've mentioned above or as a special rider then it's referred to as "drop down." Like most forms of insurance the policies may widely vary, but my advice to the OP remains the same, that just because someone claims they have an umbrella policy does not mean they're covered for marine insurance. Clearly I haven't seen the man's policy but I do have a thorough understanding of how umbrella policies generally work and until I did see it, I wouldn't even consider running his boat.

    Umbrella policies are actually quite inexpensive for the limits they generally have and the only reason they can be is that all normal claims are covered by other policies. What you've quoted from Geico is a very general web statement but not reflective of this situation. Similarly, the quotes I've posted are general and not like clauses pulled from actual policies. Even umbrella policies though have exclusions like all other policies.
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  11. Freebird

    Freebird Member

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    Wasn’t able to talk to the owner this evening as he was in a sports bar in Seattle watching the game, and we couldn’t hear each other. Not exactly a sign of being feeble. I bet he has some really good stories! I know he boated in Alaska and grew up in Sitka. Guy has been around.

    I’m not too wild about heading straight offshore and would like to have a little coastal time in US waters to shake her down. I just realized I failed to mention a detour to Jamaica and a one week layover there, so at least we can make shorter hops for that leg of the trip. I think he wants to run to Grand Cayman and continue on to the coast and down to the canal.

    I’ll talk to him tomorrow and see if I can nail things down, one way or the other. He wants to be in Jamaica on 11/08. The plan is to run 8-9 knots and fish the entire trip. He’s also a very accomplished angler.
  12. olderboater

    olderboater Senior Member

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    Grand Cayman is only about a 540 nm trip from Key West and then 300 nm or so from there to Jamaica. We crossed from Jamaica to Isla Bastimentos which is about 650 nm. The only caution is that once you leave Key West on that swing, you're completely on your own.
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  13. olderboater

    olderboater Senior Member

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    Freebird. What is the flag state of the boat?
  14. Freebird

    Freebird Member

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    I’m pretty sure it’s brand new. :D

    Owner is a resident of WA, but I don’t know if the boat is documented or where. I thought about the Keys route, but I don’t think the plan includes running that many days non-stop. I haven’t even looked to see what the longest leg of the trip would be, but he’s definitely planning to come into ports as much as possible.
  15. Pascal

    Pascal Senior Member

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    What is the history? Recently purchased ? Sitting for a while? What maintenance has been done? How many crew?

    This is not an easy run and everything has to be up to date. Fire system, life rafts, EPIRB, maintenance, spares, etc.

    I m so glad I dont Have to do deliveries...
  16. DOCKMASTER

    DOCKMASTER Senior Member

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    I believe you are not interpreting this correctly. Olderboater is correct, the umbrella only covers if it is listed in an existing policy. I just went through this with my insurance. In a very simplistic example, you cannot cover one car with a policy then get an umbrella and assume you can have 10 cars and they are all covered under your umbrella. An umbrella provides additional or supplemental liability of your base coverage but you have to primary coverage in place first.
  17. olderboater

    olderboater Senior Member

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    Well, knowing it's flag state is important. As to running those long legs, you can shorten the route to Cancun by doing 340 nm legs to Cancun and then Cancun to Cayman. You can shorten the trip out of Jamaica by going to Honduras about 360 nm or so. Regardless, Grand Cayman and Jamaica add a lot of miles. Now they're both still worth it if you have time. You can go to Jamaica by first cruising the Eastern Caribbean and coming from there, cutting through between Cuba and Haiti, not a path I'd recommend today.
  18. Freebird

    Freebird Member

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    Nobody “has to” do deliveries. I do it because I enjoy it, and I’m looking at doing this one cheap as it’s not a typical delivery. I’m about out of new water to see, and this will provide that along with some good fishing that I also enjoy. A paid vacation as it were, and the canal is a UGE plus.

    The boat won’t leave the dock without all the necessary equipment which I’ve made pretty clear on this thread. The guy has deep pockets, the engines (1271’s) have been gone through, two gensets (one new), new bottom paint, fuel tanks serviced, the list goes on. Don’t forget that unsinkable Whaler and another tender onboard.

    Having lots of spares for pretty much everything goes without saying, and there is no raft, expired or otherwise, on the boat. That will definitely NOT be the case if I take this on, and I don’t see moving this thing without insurance unless someone in a professional position tells me how I can insulate/protect myself from any number of issues that could arise.

    There will be a total of three of us on the boat, and I hope one of those guys speaks Spanish.
  19. Freebird

    Freebird Member

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    Not sure what role the flag state plays in this, but I too question getting anywhere near Haiti right now. Not sure piracy would be a big concern, but I **** sure don’t want to end up on their shore. I’d rather take my chances with Cuba if it came to that. The owner has visited Cuba, and they let him leave. That has to count for something.
  20. Capt J

    Capt J Senior Member

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    I'm going down to the Panama Canal on Monday to bring another yacht back to Florida. I use Enrique Plumer as an agent, and he is good. My Panamanian customers use him. You're going to need very long and large lines for the canal.....something like 100' and 1", I think he can provide them. You will need large fenders. You're also going to need a total of 4 people to do the canal (plus the pilot). It's going to take a few days for the canal to come measure your yacht and everything else before they'll schedule it through. I usually go to Shelter Bay marina in Colon or North of Colon. It's on the North side of the canal entrance.

    WHY ON EARTH cut your rates???? There's no reason to.

    Why not just stop in Cuba? There's a pier on the NW side where you can fuel and etc. Yachts registered elsewhere come and go from Cuba no problem. Then from there to Grand Cayman is an easy run.

    If the 2nd person coming is a friend of the owner, I'd want a proper mate also. On a trip like this, there is tons of work to do between keeping the outside clean and the engine room in order and maintained......I'd bring all of the oil and filters to do at least 1 oil change. And, enough filters for a few oil changes. Plus all of the safety gear mentioned.......A boston whaler is great, unless it too is sunk because it's strapped to the big boat that also sank.