Today’s recreational boater is as likely to leave the dock with a paid towing insurance policy on hand as they would a VHF radio. The commercial towing industry for recreational boating is big business today and many boaters, in an attempt to defray significant expenses should they need assistance, are looking to companies like Towboat US and Sea Tow to come to the rescue if they need it. But do you really know what is covered, what is not and what your responsibilities will be in these “rescues”? Many of these policies have different levels of coverage and deductibles, just as your auto or home owners insurance might. It is to your benefit to ask questions before you buy these policies, read them carefully and have all of your questions answered long before you might need the service. Not all policies are the same and in the end they can be a savior or they can cost you or your insurance company a substantial sum.
Let’s take a look at a hypothetical situation. You have enjoyed a wonderful day on the water with the family and decide to anchor out overnight and head home in the morning. A great meal and a glass of wine at sunset on the deck is the perfect end to a perfect day. You climb into the bunk and plan for a peaceful nights sleep as the boat gently rocks you into slumberland. Some time in the middle of the night you are bounced out of your berth by waves being generated by a thunderstorm which was not forecast or expected. You bound out on deck to lightning crashing and the rain being driven horizontally. Once your eyes begin to fully function you realize you are no longer in the same spot where you dropped your anchor and the shoreline is fast approaching. Just as you fumble around and find the ignition keys the boat suddenly comes to a stop. Ah, the anchor has reset and you are saved. As quickly as the storm came up, it is gone and as you look around all seems well. You will definitely have a story to tell your friends when you return to work on Monday. You climb back into your berth and sleep soundly the rest of the night.
The next morning you wake to bright blue skies and calm waters but the boat has a strange list to the port side. You climb out on deck and find you are aground from the anchor dragging in the storm and in checking the tide tables find the tide is actually going out and soon you will be stuck even more than you currently are. No worries, you have towing insurance and the towboat number is on your cell phone speed dial. The towboat operator picks up on the second ring and you are feeling very lucky. You explain to him that you are aground and the tide is falling so you need to get the boat to deeper water as soon as possible. He asks if the boat or crew are in any danger and you quickly reply that the only injury is to your pride. He explains that he is about 25 minutes from your location and will be there as soon as possible. Some hour and 15 minutes later the towboat shows up and the tide has been falling steady all of this time. The towboat Captain assesses the situation and makes the determination that this is indeed a “hard grounding” as opposed to a “soft grounding”. Now did you know there was different coverage under you policy for hard, instead of soft groundings? He asks you to sign a consent form to agree that he is now dealing with a hard grounding. You grumble about how long it took for him to get there but you relent and sign the form. The towboat Captain puts a line on your boat and makes an attempt to pull you into deeper water without damaging your boat or running gear. After a first attempt it appears that the tide has fallen too far and simply pulling you off is not going to happen. The towboat Captain scratches his chin for a few minutes, reassesses the situation and determines this is no longer a hard grounding but has now progressed into a salvage operation and the agreement you just signed needs to be amended accordingly. Did you know that the cost for this operation just went from maybe $1,000.00 to maybe $10,000.00 or much more since salvage is based on a percentage of the value of the boat? Of course the Captain will want to see your valid insurance information and will advise you not to worry because your boat insurance will certainly cover the cost. But did you know your boat policy had a $4,000.00 deductible that you may or may not have to pay out of pocket? Next the Captain puts a large water pump on your boat and stuffs plugs into your exhaust and water discharge lines above the waterline even though you are high and dry and none of these are in danger of taking on water. But he does this “just in case”. Did you know that you may have paid a premium price for the act of placing the pump on your boat, even if it is never used and this strengthens the case for salvage? By this time the tide has reversed and is now coming in to the point where a bit of maneuvering by the towboat with lines strategically placed, gets you back in deeper water and once again floating free. Story over? Not exactly yet.
Soon after getting back to the dock and lowering you blood pressure you get a call from your insurance company so you can explain this salvage operation to them. They explain to you that the towboat Captains reports states that your boat was taking on water upon his arrival and he has an agreement signed by you to salvage your sinking, grounded vessel, and by the way with your deductible you will have to cover the $4,000.00 difference and they will be happy to pay the rest but you will also need to haul your vessel for a sum of about $400.00 and pay a surveyor about $300.00 to survey for any damages and be sure the boat is seaworthy before they will continue coverage. This is preposterous and could never happen you say. Well, don’t be so sure, although most tow operators are honest, hard working professionals, unfortunately this kind of scenario happens all too often.
So how can you be sure you have the coverage you thought you had and how do you keep from getting yourself into a situation like this? First and foremost read and understand the policy and the differences in coverage based on all situations. Even the time of day can affect coverage. Most tow companies charge more for a night tow, and night starts at dusk. Ask questions, ask questions and ask questions, before you buy the policy. Have ANYTHING you don’t understand clarified and get it in writing; even an email carries some weight. Know the difference between a tow and salvage. Salvage is usually defined as voluntary and successful rescue of a vessel, its cargo or crew from perils at sea. That leaves things open to a pretty broad interpretation. Be very cautious in signing forms or agreements in the heat of the moment. But also understand that even with no forms or agreement a towboat operator may make a claim for salvage. A salvor only needs to demonstrate that his efforts were voluntary, the vessel was in peril and he was successful in his efforts. Look for policies that will cover these major expenses without a deductible. Unless salvage is specifically addressed in your towing policy it may not be covered but may be paid from your boats damage or loss policy so set reasonable deductibles for these policies. Ask before a line is attached to your boat if the incident is going to be a tow or salvage. If possible find out what the towboat charges are going to be. If time and circumstances permit, call your insurance company and ask for assistance and clarification. If you are not in peril and don’t feel right about the situation, call it off and contact another towing company. You may be covered for the expense of another tow company under your standard insurance policy. Commercial towing companies provide an important service to the recreational boater and every day a tow company somewhere saves the day and brings us home safely. It is the boat owner’s responsibility to fully understand what is covered and to assure that the services provided are the services requested and to take whatever steps are required to eliminate any misunderstandings.
THIS AUTHORS TOWING DEFINITIONS
Discussions of the differences between soft groundings, hard groundings or salvage come up any time commercial towing is mentioned. These are some of this author's definitions as I understand them, but may or may not be the same definitions various towing companies have. Here are the issues presented in the article.
SOFT GROUNDINGS-----To me this would be a simple situation where the tow boat would arrive on scene, pass a line to the boat in need of assistance and either pull them off and send them on their way, or tow them to a facility for repair. This could be the boater’s marina. This type of assistance would entail a single boat utilizing a single tow line and a short time period to accomplish the task.
HARD GROUNDING-----In this situation you would be looking at a vessel grounded on a rock area or coral, and possibly taking on water as a result of the grounding. It may also require multiple tow boats with multiple lines, or additional services such as divers, pumps, or an extended time period to assist the vessel. This scenario, in my opinion, would be considered a hard grounding.
SALVAGE-----If we look at the “legal” definition of salvage, the main indicator is whether or not the crew or vessel is in peril. And that does not always mean immediate peril. The responder must be doing so voluntarily, and he must succeed in the operation. That leaves the entire definition of salvage open to a pretty broad interpretation. It could be argued that any towing scenario could be a salvage operation. Most towing companies would probably not file a salvage claim under simple towing circumstances since any challenge would involve arbitration, or a court decision, or be too costly and time consuming including the possibility of failure. If the vessel were in danger of sinking, washing up on the shore or rocks, pounding on a reef, or presenting itself as a hazard to navigation and of concern to others, then most certainly it would be considered a salvage operation. If the vessel, or crew, or even the assisting vessel is placed in “peril”, then again, there should be no question as to whether or not it is a salvage operation.
An actual decision handed down from a U.S. District Court stated , “to constitute a maritime peril, it is not necessary that the danger be actual or imminent, it is sufficient if, at the time assistance was rendered, the vessel was stranded so that it was subject to the potential danger of damage or destruction”. In most cases, this interpretation is on the shoulders of the responder, the tower. It gives us something to ponder the next time we make that call for assistance. The time to consider and check your insurance policy and towing contract would be long before you cast off your dock lines.