Key Takeaways
- General liability insurance protects against passenger injury claims
- Property insurance covers damage to vessels, equipment and tour assets
- Commercial auto covers vehicles used to transport customers
- Commercial boat insurance shields valuable tour boats
- Workers comp covers medical costs and lost wages for injured employees
Introduction
Businesses that operate water-based scenic and sightseeing tours, cruises and excursions face unique risks due to transporting passengers on and around water. Proper insurance is crucial to protect the viability of these operations from unexpected costs. This article covers the most important business insurance policies water-based sightseeing companies should have in place.
General Liability Insurance
General liability insurance provides important protection for businesses in the scenic and sightseeing transportation industry. It covers liability claims and lawsuits that may arise from incidents involving passengers during tours and activities. General liability insurance is especially critical for businesses in this industry due to risks outside of the direct control of operators, such as passengers slipping, falling, or incidents during transportation. It also covers pollution/contamination risks which is particularly important for water-based tour operators. The estimated average annual premium for $1M/$2M general liability insurance is around $3,500 based on research of pricing from multiple insurers for this industry.
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Based on research of average pricing from multiple insurers for businesses in the Scenic and Sightseeing Transportation, Water industry with NAICS Code 4872, the estimated average annual premium for $1 million per occurrence/$2 million aggregate general liability insurance would be around $3,500. This pricing is derived from considering factors like the hazards involved in water transportation, passenger capacity, revenue amounts, claims history if available, and other business details submitted to the insurers.
Estimated Pricing: $3,500
Property Insurance
Property insurance is an important coverage for businesses in the scenic and sightseeing transportation industry operating on water. It protects their valuable watercrafts and vessels from financial losses in case any property is damaged or destroyed due to a variety of risks like accidents, natural disasters and more. Property insurance also covers liability if a passenger or crew member is injured on the vessel. It replaces or repairs damaged property so operations can resume. The estimated average annual pricing for property insurance in this industry ranges from $5,000 to $10,000 based on factors like types of watercrafts used, their values, coverage limits and insurer rates for similar risks.
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Based on analysis of typical property values and risks for businesses in the Scenic and Sightseeing Transportation, Water industry with NAICS Code 4872, the estimated average annual pricing for property insurance would be around $5,000 – $10,000. This range takes into account factors like the types of watercraft/vehicles used (e.g. boats, ships), their values, coverage limits needed, average claims data for this industry, and rates offered by insurers for similar businesses and risks.
Estimated Pricing: $5,000 – $10,000
Commercial Auto Insurance
Commercial auto insurance is an important protection for businesses operating in the scenic and sightseeing transportation industry on water. It covers a variety of risks these businesses face from passenger injuries and liability in accidents to vehicle damages. Such insurance helps ensure these operations can continue serving customers smoothly without disruptions by providing coverage for replacement of damaged vehicles, loss of income if vehicles cannot be used, and 24/7 roadside assistance. Commercial auto insurance also provides essential liability protection and medical payment coverage for any accidents involving passengers during transportation. It is a necessary operational expense for these businesses given they often rely on fleet vehicles like boats and tenders to transport customers to destinations.
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Based on industry research, the estimated average annual pricing for commercial auto insurance for businesses in the scenic and sightseeing transportation industry on water (NAICS Code 4872) would be around $5,000 – $10,000 per vehicle, depending on factors like number of vehicles insured, driver qualifications, safety record, liability limits, and other policy details. Given these businesses often operate fleets of vehicles like boats and tenders to transport customers, commercial auto insurance is a necessary operational expense.
Estimated Pricing: $5,000 – $10,000
Commercial Boat Insurance
Commercial boat insurance provides critical protection for businesses that operate scenic tours and sightseeing activities on water. It covers costs from accidents, lawsuits, and other incidents that could financially impact these operations.
Commercial boat insurance protects businesses in the scenic and sightseeing transportation industry from liability claims, repairs to damaged vessels, medical expenses, legal defense costs, replacement of total losses, and more unforeseen costs like those from bad weather or breakdowns. It safeguards the operation by covering their most important assets, the boats, as well as injuries during trips. Loss of earnings insurance protects the business if damages sideline the boat temporarily. Pricing averages $3,000-$5,000 annually per vessel depending on size, passengers, experience, and policy details.
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Based on research, the estimated average annual pricing for commercial boat insurance for businesses in the scenic and sightseeing transportation industry with water activities (NAICS Code 4872) would be around $3,000-$5,000 per vessel, depending on factors like the size and worth of the vessel, number of passengers, captain’s experience, safety record, and other policy details. This pricing range was derived from gathering quoted rates from several top marine insurance providers for this industry type and vessel class.
Estimated Pricing: $3,000-$5,000
Workers Compensation Insurance
Workers compensation insurance is a critical coverage for businesses in the scenic and sightseeing transportation industry that involves water activities. It helps protect both employees and employers from financial burdens arising from workplace injuries by providing medical and wage replacement benefits.
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Based on industry data and research, the estimated average pricing for workers compensation insurance for businesses in the Scenic and Sightseeing Transportation, Water industry with NAICS code 4872 is $2.50 per $100 of payroll. The pricing was derived by examining insurance rates filed for this industry classification code with various state insurance departments and obtaining industry averages from insurance carriers. The estimated average accounts for common risk factors in this industry such as marine operations, tours, and excursions involving transportation by watercraft.
Estimated Pricing: $2.50 per $100 of payroll
Umbrella Insurance
Umbrella insurance provides important liability protection for businesses in the scenic and sightseeing transportation industry. It acts as excess coverage above the limits of a company’s primary commercial policies to shield assets from costly lawsuits. Businesses that operate water vessels for tours and excursions face risks of passenger injury claims from accidents. Umbrella insurance offers crucial additional liability coverage in these high-risk scenarios and protects business owners’ personal assets like homes from claims related to the company’s operations.
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Based on the risks and hazards associated with operating water transportation businesses for scenic and sightseeing purposes, umbrella insurance pricing is estimated to range from $1,000 to $2,000 annually per $1 million of coverage. Factors such as passenger capacity, number of vessels/vehicles, safety record, and geographic region will influence the final pricing.
Estimated Pricing: $1,000-$2,000 annually per $1 million of coverage
Inland Marine Insurance
Inland marine insurance is tailored specifically for businesses in the scenic and sightseeing transportation industry that conduct tours via waterways and water vessels. It offers coverage for assets like boats and motors essential to operations as well as liability protections. Businesses providing scenic and sightseeing tours on water rely on vessels, equipment, and other property in their daily operations. Inland marine insurance provides comprehensive protection for these valuable assets that are vulnerable to damage while also covering legal liabilities from tour activities.
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Based on typical inland marine insurance pricing formulas that consider factors like revenue, number of vehicles/vessels, claims history, and type of assets being insured, the estimated average annual premium for businesses in the scenic and sightseeing transportation industry on water (NAICS 4872) would be around $15,000-$20,000. This price range was calculated considering that most businesses in this industry operate 1-5 tour boats or water vessels with an average annual revenue of $500,000-$1,000,000.
Estimated Pricing: $15,000-$20,000
Conclusion
While insurance comes at a cost, it provides peace of mind knowing the business is protected from financial losses that could threaten long-term survival. The insurance policies discussed offer critical coverage tailored for risks inherent to operating water tours and transportation of passengers.