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

Section two of the bill requires owners of public vessels seeking a certificate of inspection under the Navigation Law to submit proof of liability insurance.

Section three of the bill requires owners of public vessels to display proof of insurance, as well as provide such proof to any person who has suffered personal injury or property damage as a result of the operation of such public vessel.

Section four of the bill sets forth the penalty for operating a public vessel without liability insurance, which is a fine of $5,000 to $10,000, and/or imprisonment for not more than ninety days.

Section five provides an additional penalty for operating without liability insurance, which is revocation of the inspection certificate for one year.

Sections six and seven require inspectors to ascertain whether the vessel under inspection has the insurance required under the act and to note the particulars of the insurance on the certificate of inspection.

Section eight and nine amend the insurance law in relation to marine protection and indemnity insurance.

Section ten makes New York State law controlling with respect to the rights and obligations arising under insurance policies required under the act.

Section eleven amends the insurance law in relation to what can be regarded as "Basic kinds of insurance."

Section twelve specifically authorizes excess line brokers to place marine and indemnity insurance.

Section thirteen is the effective date (sixty days after enactment).

Justification

The recent investigation of a Panamanian global money-laundering and tax evasion scheme revealed that it was linked to a fake $2 million liability insurance policy held by the owners of the Ethan Allen tour boat. The tragic capsizing of the Ethan Allen on Lake George, on October 2, 2005, resulted in the deaths of 20 individuals. The Ethan Allen owner discovered soon after the accident that the insurance policy he bought was backed up by non-existent assets.

This bill addresses the current gap in law as there is currently no requirement that public vessels carrying passengers carry liability insurance. It also requires the insurance be purchased from an insurance carrier authorized to do business in New York state or thorough a licensed excess line broker regulated by the Department of Financial to eliminate fraud. This bill is necessary to enhance the safety and security of the public who utilize public vessels such as tour boats and who expect such vessels to be insured just as any other form of commercial transportation.

Legislative history

New bill.

Fiscal implications

None.

Effective date

Sixty days after enactment.