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November December 2019 Marina World

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DISASTER MANAGEMENT Watching the storm, as waves top the breakwater at Coffs Harbour International Marina in NSW, Australia. Photo: Frank Redward Build well, recover quickly, save money by Robert Wilkes Virtually all marinas face natural threats. Storms and tsunamis threaten coastal marinas while tornados, river debris and flowing ice are dangers to inland marinas. Sea level rise is a real concern and no marina is immune from the risk of fire. At Coffs Harbour International Marina in New South Wales, Australia, low atmospheric pressure and an extreme high tide created huge waves that topped the breakwater and damaged the docks. This article is not about storm preparation. It’s about what you can do to improve your facility’s survivability. With forethought, prudence and planning, you can reduce your insurance costs and return your marina to operational status faster and at less cost. “I’m not worried. I have insurance.” There is a long-standing attitude that insurance will put things right, therefore capital invested on survivability is wasted. Owners taking this stance have one question, “What is the greatest number of berths I can build for the cheapest price?” As we shall see, this is not only shortsighted, it could risk the business. Structures on land have strict building codes to ensure survivability and safety, especially in areas prone to natural disasters. In many areas, marina construction is not covered by building codes. Notable exceptions are Australia and the UK. Australia appears to be the world leader in recognising the importance of well-built marinas. Elsewhere it’s often an owner’s decision. A developer may be tempted to build a marina just durable enough to establish the business; especially if he has a short-term mindset or does not believe the market will bear higher moorage rates for a better-built marina. Insurance Recreational marinas are a tiny slice of the massive insurance business. Many agencies lack understanding of the marina industry. Turnover among agency staff diminishes the chances that the assessor or adjustor is familiar with the issues involved in assessing a marina’s resilience or its ability to recover from a storm. One insurance agency that does know the industry is International Specialty Risks (ISR) of Lynnfield, MA. “Half of all marinas are underinsured,” says T. Clarke Smith, vice president at ISR. Smith is unusual. He has 39 years of experience in marina insurance. “There are a lot of good reasons to build a better, more resilient marina,” he adds. “For one, we do an assessment to determine the strength of the marina before writing the policy. We offer lower premiums and deductibles for a well-built marina. We can assume a betterbuilt marina will be out of service for less time, if at all, and will be fully operational more rapidly - reducing the exposure for loss of business.” Smith’s policies also include an ‘ordnance of law’ clause that indemnifies the owner for the higher cost of rebuilding due to regulatory changes, such as ADA compliance and regulations yet unknown. While Smith’s company may not be the norm in the US, Australian marine insurers often take into account the durability of the marina’s infrastructure. Underbuilding your marina and depending on insurance has many drawbacks: • Your insurance company will likely raise your rates after a loss. They could even refuse to insure you again. • Your employees may lose wages and key employees may go elsewhere. • Tenants may move to other locations. • Tenants whose boats have been lost or damaged could sue claiming the marina was unsafe. • You may find you have insufficient funds to rebuild. If a storm has damaged several marinas in your area, you may find a long delay in getting your marina rebuilt. Cost may rise as demand for contractors increases. Rebuilding requires approvals. Regulatory agencies may open new questions about your facility and create hurdles that are time consuming and expensive to overcome. Such delays can be a threat to the life of the business. Some marinas, most often municipal marinas, will need to seek funds from an emergency management agency such as the Federal Emergency Management Agency (FEMA) in the US. Expect a lengthy approval process even if building like for like, but - November/December 2019 43

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