Adriana V. Padovan, Ph.D. avpadovan@hazu.hr Adriatic Institute Croatian Academy of Sciences and Arts Marina Operator's Liability Insurance and its Impact on the Business Practices ROUND TABLE CURRENT LEGAL CHALLENGES OF SUSTAINABLE DEVELOPMENT OF THE ADRIATIC PORTS OF NAUTICAL TOURISM 22nd ESD CONFERENCE, 30th June 2017, SPLIT

This presentation is a result of the author’s research under the installation research project no. 3061: Developing a Modern Legal and Insurance Regime for Croatian Marinas - Enhancing Competitiveness, Safety, Security and Marine Environmental Standards www.delicromar.hazu.hr The project is financed by the Croatian Science Foundation

INTRODUCTION Marina operator’s liability insurance – insurance of liability of the marina operator (concessionary in the special purpose port) arising in relation to its business activities Insurance pays the amounts that the insured marina operator is obliged to pay to compensate for damage caused to its clients (boat owners/operators/chartering agencies…) or third parties in the course of performing its regular business activities Voluntary insurance (law, concession contract)? Business standard (exposure to potentially high risks, normal running of business and financial risk management) Governing acts under Croatian law – Obligations Act (lex generalis + lex specialis - arts. 921 etc.) / Maritime Code (lex specialis – arts. 684 etc.)

INSURANCE COVERAGE Subject matter of insurance – marina operator’s liability related to its business activities: Contractual liability – contracts of berth and contracts for services (vessel maintenance, servicing, repair, lifting and launching, supply…) – governed by the contract, GTCs, port rules TPL (personal injury, damage to property), pollution liabilities Focus: special cover for liabilities arising from the main business activities (separate cover for employer’s liability and general TPL insurance) Insured sum, deductibles, exclusions Insured risk – incurring legal liability for damage to persons and property Loss occurrence – an incident related to an act or omission of the marina operator causing damage to the vessels on berth, tourists in the marina or their property, or others Territorial limit Time limit Claim

RIGHT OF DIRECT ACTION? Obligations Act vs. Maritime Code Obligations Act, art. 965, right of direct action from the moment of the loss occurrence Insurer’s defences (Obligations Act, art. 945)? Insured’s defences Inusrer’s defences under the insurance contract (sum, deductibles, exclusions, but only those arising prior to loss occurrence)

COMMON EXCLUSIONS Wear and tear Latent defect Act or omission of the owner, crew or other persons using the vessel War, strikes, terrorism and similar risks Loss of artefacts and valuables Rodents Ice Extreme weather conditions Loss of items not listed in the list of inventary

„PROBLEMATIC” EXCLUSIONS Loss of income/profit/time Wreck removal Theft of the vessel Burden of proving the cause of damage: Negligence of the owner, crew, passengers on bord? Gross negligence of the marina operator? Weather conditions as force majeure

RISK ASSESSMENT insurance questionnaires, condition surveys Scope of MO’s services Locations and premises where the services are performed Are the services outsourced Condition of equipment, infrastructure, suprastructures Figherfighting systems, protocols, implementation, training, maintenance Access to the marina’s premisses, security systems… Formal documentation, certification? Soft law standards?

IMPACT OF INSURANCE ON BUSINESS PRACTICES Historically – origins and interconnection of the marina operators’ general terms and conditions and the standard marina operators’ liability insuranceterms and conditions State of the art today (tendencies in the selfregulation, judicial practice) Free competition amongst the insurers – market position changed Hull and liability insurance of the vessels on berth MO’s GTC’s approved by the insurers, technical and quality standards (safety, security, environmental standards) – how is it in reality (local vs. international markets; positive vs. negative aspects)?

CONCLUSIONS Diversity in MO’s GTC’s and in insurance terms Judicial practice Understanding of MO’s liability by the interested public, including insurers Unconsolidated professional terminology Safety, security, environmental and quality standards Legal certainty? Way forward?