Liability: Transporting parties for a fee

[dcg9381]

Interested in comments on the following activity:

I live a few blocks from an inland lake. One of the commercial operations in the area hosts wedding parties. I've been approached by a private party (having a wedding) that wants me to transport bride and groom from the local wedding location to an on-the-water hotel. Transportation distance is about 4 miles.

Doing this for a fee, probably means that I'm operating a charter boat and I believe there are USCG requirements for doing so.

Doing so also has insurance consequences. I've talked to several insurers in the past about allowing the boat out for rent a few times a year through persons that I trust financially. I was basically told that "rental" insurance raises my insurance rates literally by a factor of 10 and that there is no discount for "part time" rentals. Either it's a private boat or it's treated like a full time rental operation. No in-between.

Quite a few people on the lake do fishing charters, none of them have USCG licenses that I'm aware of. Every private party I've talked to advertising boat rentals - they're doing it on top of personal insurance...

Any comments? You'd think I could run individuals across the lake for a fee, but sure looks like it's impossible to do it "by the book".

 

[Solittle]

Re: Liability: Transporting parties for a fee

The USCG has no authority in intrastate waters so that is no problem. Your state does so you will need to check there.

You need to check with your insurance company. I don't think the requirements are the same for renting out your boat and transporting a wedding party.

 

[Drowned Rat]

Re: Liability: Transporting parties for a fee

Solittle is exactly right, however just because it is an "inland" lake does not mean it's safe from federal jurisdiction. For example, an inland lake that boarders two or more states falls under federal rules and regulations. Inland lakes that can be navigated to or from via river also fall under federal jurisdiction.

If it turns out your lake is regulated by the state only, AND they don't require licensure, you would still have a liability issue carrying passengers for hire. If you don't incorporate your "business" then everything you own is at risk should something go wrong and you get sued. So, insurance is a must or you're taking a big chance.

 

[tashasdaddy]

Re: Liability: Transporting parties for a fee

knowing where you are would really help. what lake.

 

[scoutabout]

Re: Liability: Transporting parties for a fee

Once money starts changing hands it's a commercial venture -- and that opens up a whole world of regulations and exposure. My parents rent their cottage occasionally to people they know and specifically exclude every water toy but the canoe. It's an older structure and suddenly the fireplace had to be specially re-certified, the deck railings changed out from the wrought iron my grandfather had made to modern code-rated stuff at the right height. Even then the insurance spiked on the building considerably for the seasons they rented. Couldn't even choose a specific period within a given season. It was either a rental all year or it wasn't.

For comparison, in the aviation world it really gets anal. Not only can't you pay for it directly, you can't even chip in for gas at the pump so your buddy can take you up in his puddle jumper if he's not commercially rated. The regulations go out of their way to say specifically that nothing of value can be provided to a pilot unless they have that ticket.

I've done exactly one charter tour in the boat. Some years ago I was loafing around the pier where a sightseeing steamer operates watching it head out on another 3 Hour Tour of the lake. Five minutes after it leaves this car races up to the dock and this guy jumps out looking all frantic. He had missed the boat obviously.

He sees me seeing him and comes over and says kind of sheepishly that he missed a chance to get his mother out on the lake before she had to go back overseas and could he pay me to take them around for just a while? He seemed genuine and his mother getting out of the car with her cane didn't alarm me too much so I agreed. Can't remember but I think I refused the money he offered and we loaded her in and puttered up the lake a bit and back. Only about 30 minutes or so. They seemed really gratefully for it but heck, I'll look for any excuse to get out. I wonder though if I managed to crash into something what the ramifications might have been...no pun intended..

You definitely don't want to get sucked into liability issues. I think the prevailing strategy is to sue everyone and let God sort it out. That's not the time to have your insurance co say "Sorry -- you're on your own."

 

[DJ]

Re: Liability: Transporting parties for a fee

Set up a LLC. (Limited Liability Co.). It's cheap and easy. The amount of revenue will probably be minimal so, tax wise, it probably won't hurt you.

The LLC will "shield" you from frivilous lawsuits with an insurance policy-also cheap.

Your only issue may be-zoning. It depends on your locale.

 

[jollymon]

Re: Liability: Transporting parties for a fee

Why not just offer to do it for free.

If it is a one time deal, it is probably not worth the hassle of getting all of the paper work to do it by the book. Personnally I look for any reason to take a ride.

 

[dcg9381]

Re: Liability: Transporting parties for a fee

Texas. One of the Colorado River lakes - not multi-state boundary.


If it was for a friend, I'd do it for free no problem.
Doing it without a fee, I'm still open to liability just like carrying any other passenger on the boat, probably not as much as doing it for a fee.

An LLC might be a good idea if I'm doing this multiple times.. I think I'd have to sell the boat to the LLC an incur tax cost (again)?

With the cost of fuel these days, I'm not interested in making the run for free + drop off and pick up the boat. They're also asking for 11pm departure which isn't when I'm normally out on the lake - I've been on the lake 10 years and operate at night, so it's not a problem, but it'll travel times and speeds are greatly reduced.


I have friends that fly, and do chip in for fuel.. Well, I mean other non-aircraft expenses, when going up.