Requires the owners of public vessels intending to operate on the navigable waters of the state to obtain marine protection and indemnity insurance

Title of bill

An act to amend the navigation law and the insurance law, in relation to requiring certain policies of insurance for public vessels which carry passengers

Purpose

Requires public vessels operating in New York State to carry marine protection and indemnity insurance.

Summary of provisions

Section one - amends section 50 of the navigation law, as amended by chapter 672 of the laws of 1962 to state no certificate of inspection or temporary permit shall be issued unless the owner of a public vessel produces proof of insurance to the inspector.

Section two - amends subsection (a) of section 2105 of the insurance law, as amended by chapter 626 of the laws of 2006 to permit excess line brokers to provide marine liability insurance.

Section three - amends subsection (b) of section 3103 of the insurance law to maintain New York state jurisdiction over vessels on the navigable waters of the state (as long as the coast guard does not exercise active control over such waters).

Section four - adds two new sections 51 and 52 of the navigation law.

Section 51 - requires owners of public vessels certified to carry passengers which operate on the navigable waters of the state, except vessels which navigate on waters which the United States exercises active control, seeking a certificate of inspection under the navigation law to submit proof of liability insurance as defined in the Insurance Law, with a minimum coverage of one million dollars per occurrence (owners are free to obtain more if they so desire). It also makes the failure to do so a misdemeanor.

Section 52 - allows for owners of public vessels to be self-insured upon the approval of the commissioner

Section five - contains the effective date.

Existing law

The Navigation Law regulates the operation of public vessels in the state; the Insurance Law regulates the manner in which marine protection and indemnity insurance is offered. However, there is no statutory requirement that public vessels carry such insurance.

Justification

The tragic capsizing of the Ethan Allen, on October 2, 2005, which resulted in the deaths of 20 individuals, also brought to light that there is no requirement that public vessels carry liability insurance. This bill is necessary to enhance the safety and security of the public who utilize commercial watercraft for recreational and business purposes, and who expect such vessels to be insured just as any other form of commercial transportation.

Legislative history

2006: S.6828-B Passed Senate/A.10935 Schimminger, Insurance Committee 2007-08: S.4165-A 3rd Reading 2008: S.8659 Passed Senate/A.11644-A Schimminger, Codes Committee

Fiscal implications

Negligible.

Local fiscal implications

None.