Some key considerations when renting your boat or taking passengers out.
It is not my intention to needlessly scare new boat owners who wish to charter the boat to offset boat ownership costs. My goal is to simply point information that is not widely known to new boat owners. And remember, tens of thousands of boats are rented every year without incident.
Vessel owners assume a large amount of liability. It’s better to point out what they are not liable for.
Vessel operators (Captains) are liable for 3 areas.
Safe Navigation and Operation of Vessel
Passenger and Crew Safety and Duty to Warn
Passenger and Cargo Loading and Unloading
Liability Examples
Boat catches fire from engine or electrical (Owner)
Boat runs aground (Captain)
Boat takes on water (sinks) due to lack of maintenance (Owner)
Boat swamps due to too much weight (Captain)
Passenger drowns because life jacket worn incorrectly (Captain)
Passenger falls overboard because railing is loose (Owner)
Passenger fails overboard due to sea conditions (Captain)
However, there is a term called Standards of Reasonable Care that falls under the responsibility of the passenger. Meaning. If there was something obvious that would be considered dangerous or risky by a lay person where injury or death occurs, the captain nor owner would be liable.
Negligence is the determining factor for an incident to become a criminal matter; then reasonable doubt would apply to defend.
In a civil matter (being sued) burden of proof would only need to be plausible 51% / 49%
The above is why it’s very important that you have qualified and experienced individuals operating your boat.
Chartering Your Boat
Chartering you boat is when a passenger accepts transportation for a fee or value transaction; in simple terms “paying” for transport.
The term “paying” is not limited to the exchange of currency. Paying can include goods and services such as alcohol or provisions, paying for fuel, or providing something of value given to be transported on the boat. Only when there is no transaction of value exchanged between owner and passenger(s) would be a boat be consider operating for recreational purposes.
There are defiantly shades of gray when considering value exchange. Inviting friends or family who bring sandwiches on board or slips you 100 bucks for fuel as part of general contribution to go on a boat ride doesn’t fall under commercial transport. However, if you have passengers that have no prior personal relation on board and something of value was provided, your boat is considered a charter and a whole boatload of regulations come into play.
The scrutiny of “paying” passengers comes when there is an issue or event resulting in property damage, passenger injury or death. Scrutiny is also applied when Coast Guard or law enforcement stops a vessel on a routine safety check or in response to report regarding your vessel.
Side Note: Unlike a motor vehicle, there is no expectation of privacy with a boat on the water. The Coast Guard and local law enforcement may board your vessel at any time with or without probable cause. Once on board, there is no expectation of privacy and all searches (and what they may find) is legal.
When a boat is under a charter, the maximum number of passengers for a UPV (uninspected passenger vessel) is six (6). Even if the vessel has 5 staterooms, full galley, seven heads, salon, hot tub, etc. The boat’s gross tonnage must be over 100 GRT for the maximum number of passengers to be raised to twelve (12) passengers (max).
Question: How do small dolphin tour boats or dinner cruise boats (boats used for commercial purposes) able to carry more than 6 (or 12 passengers) legally?
Answer: Commercial vessels carry a COI (Certificate of Inspection) issued by the Coast Guard (every 5 years) that lists various capacities, locations and operational information on the certification, such as max number of passengers and number of required crew.
Side Note: 99.97% boats in the Tampa / St Pete area are designated recreational. Those vessels that are designated for commercial use typically have a COI and were either built under the rigorous specifications to pass a COI inspection or were a recreational or custom vessel enhanced or made ready after-the-fact. Obtaining a COI for a vessel that was built for recreational purposes is doable; however, the process and requirements to make-ready is an extremely costly endeavor to the vessel owner.
Properly Licensed Operator
Once a boat is designated as a chartered boat, the operation of the boat must be under the responsibility of a United States Coast Guard Operator with a minimum license grade of OUPV (Operator of an Uninspected Passenger Vessel; commonly known as a 6-pack license (hence the 6-passenger maximum limitation). To operate a commercial (or recreational) vessel the minimum license required is Master.
Liability Insurance
For a commercial vessel, liability insurance is required. For a recreational vessel, no such requirement is required. However, the average reader should know and understand the concept of insurance and the importance it plays.
Most new boat owners are unaware that typical boat insurance may not cover claims if the insurance company discovers that a claim occurred while the boat was being used for chartering purposes. This is something that you should verify with your insurance carrier before chartering your boat. When you use a boat brokering service such as BoatSetter, BoatSetter will include as an option general charter liability insurance as part of your brokering fees to list the boat for rental.
Question: I have looked at listing my boat on a boat rental app and I discovered I can rent to more that 6 passengers. Knowing the 6-passenger limitation, how can that be legal?
Answer: Bareboating!
Demise Charter Agreement also known as “Bareboating”
I have spoken a lot about and written a couple blogs on bareboating. The information contained in my blogs is not all-inclusive. If you decide to bareboat your vessel, vessel owners should clearly understand all the regulations and requirements to bareboating your vessel. Failing to do so, will cost you thousands of dollars, lost revenue, public shaming by the Coast Guard and other news affiliations, and worse.
General Safety Equipment
I have written an all encompssiong blog on the safety requirements for a small passenger vessel for recreational purposes.
To understand what is required to comply with Sate and Federal regulations, feel free to read that blog entry
For the purpose of this article, when chartering a boat, all the required safety equipment for recreational vessels is identical to the requirements of non-commercial chartered boat; with one exception.
Under a chartered vessel, the required PFDs (personal flotation devices, life jackets) are required to be Type I, as opposed to Type II. Most PFDs provided with a boat when purchased; and specifically, the simple orange “boxie” life jackets are Type II.
Side Note: The easiest way you can distinguish between Type I and Type II is that Type I PFDs are a bit bulkier than Type II and have reflective tape. Additionally, Type I PFDs are a bit pricier compared to Type II PFDs.
Side Note: When you bareboat, all the extra regulations that come into play when you charter a boat are no longer required. Why? The bareboat agreement essentially designates the vessel as being used for recreational purposes; and therefore, follows the regulations and requirements of a personal vessel being used for recreational purposes. It would be no different than you are loaning your boat to your neighbor, and he/she takes 12 of their friends for a fun day out on the water.
I am a huge proponent of new boat owners investigating and researching ways to make money with their boat. I am also a huge advocate for boat owners to know, understand, and follow all the regulations when chartering their vessels.
I am happy to provide anyone guidance, information, do’s, don’t and even have a battle-tested Demise Charter Agreement and Liability Waiver for those that would like to seriously consider chartering their boat.
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