1 July 2025

Private vs. commercial boat insurance

By Sean McNamara Branch Manager, Worcester
Illustration of sailboats docked at a modern marina with wooden piers and a building on the right.

What is the difference between a Private and a Commercial marine policy?

There are many reasons why we buy boats — to get from point A to point B, to live on, for the pleasure of boating, to race, or to use as a source of income.

But regardless of the reason, all boat insurance policies are the same, right? Wrong!

If you’re using your boat purely for enjoyment, then a Private & Pleasure policy is absolutely the right one for you. If you’re using your boat for commercial purposes, your insurer may be able to provide business cover under a commercial policy.

So, does that mean you can use the same policy for both leisure and commercial use?

Yes, in some cases — but consider boats used for sightseeing or fishing trips, afternoon tea tours, or any activity that requires a skipper and crew. In these scenarios, if you are employing people to perform work on your behalf (even if unpaid), you are legally required to have Employers’ Liability insurance. This cover is only available under a Commercial Marine Insurance Policy, as Private & Pleasure policies do not include Employers’ Liability.

You may also need Public Liability cover for other business-related activities. This could include operating a ticket booth, escorting passengers to and from the boat, or serving food and drink onboard.

Three identical sailboats with orange and white sails evoke the spirit of marine trade policy on a white background.

But my Private & Pleasure policy includes third-party liability. Isn’t that the same thing?

Not quite. Third-party liability covers negligence directly related to the operation of the boat — not the activities that occur before or after sailing. For example, if your safety equipment or evacuation procedure is inadequate and a passenger is injured, this would fall under a Public Liability policy, not a standard third-party cover. You’d need the more comprehensive protection that a commercial policy provides.

Illustration of a sailboat with an orange wave pattern on the sail and a sleek, modern design.

I rely on my boat to generate income. Is this insurable?

Absolutely. Commercial marine policies can include cover for loss of use or hire if your boat is out of action following an insured event.

Will a Commercial Marine Policy cost more?

Possibly, yes. The premium reflects the increased usage and risk associated with commercial activities. Additional covers such as Employers’ Liability, Public Liability, and Loss of Hire will also influence the cost.

Boat owners take a serious risk by using their vessels commercially while only holding a Private & Pleasure policy. If you’re unsure whether your current policy is right for you, please contact the marine team on 01905 930 760 — we’ll happily chat through your circumstances to ensure you have the most appropriate cover.

Call us today on
01905 930 760
Enquire here

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