Even owners of a recreational watercraft must be concerned about liability resulting from a pollution incident involving their boat. Suppose your boats sinks and the oil and fuel leak out, thus polluting the waters. Are you aware of your potential liability from this oil spill?
As owner of the boat, you will be responsible for the clean-up. What is the extent of your liability?
The Oil Pollution Act of 1990 (OPA 90) sets the maximum limit of liability “for any other vessel” at “the greater of $1,000 per gross ton or $854,400”.
Does your insurance policy provide coverage pollution liability coverage and, if so, up to what limit?
You need to read your own policy but the general answer is yes, you do have coverage. The wording can probably be found under the “Liability Section” and is entitled something like “Accidental Fuel Spill” or “Fuel Spill Coverage”. Note that for coverage to apply, you must immediately notify the Coast Guard or other proper authority, take necessary action to prevent further spillage, and completely cooperate in the clean-up.
The limit that applies to pollution coverage is usually your liability limit as shown of the declaration page. Some companies may have a sublimit for the accidental fuel spill coverage.
For example, if you purchased bodily injury and property damage liability coverage with a $500,000 limit, you would have $500,000 for pollution liability. However, the pollution liability is NOT additional coverage but is rather included in the total $500,000 limit. So, if your fuel spill occurred due to your running into another boat and injuring 3 people, the total liability coverage for pollution, bodily injury to the 3 people, and damage to the other boat would be $500,000.
You may therefore have a deficit in coverage between the $500,000 and the maximum liability of $854,400. Check to see if your watercraft insurer allows you to purchase $1,000,000 liability coverage.