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Higher insurance rate delayed for harbor service providers

OCEANSIDE — Several service providers in the Oceanside Harbor could breathe a sigh of relief just before the New Year after the implementation of a higher insurance rate requirement to operate in the harbor was delayed.

Service providers who work in the Oceanside Harbor, which includes hull cleaners, boat mechanics, painters, carpenters and boat detailers, are currently required to carry public liability insurance and property damage insurance in an amount of at least $1 million per occurrence and $2 million aggregate.

Had it been implemented, the change would have required service providers in the harbor to carry insurance in an amount of at least $2 million per occurrence and $4 million aggregate.

The change was implemented several months ago for all city vendors and contractors, according to Harbor Division Manager Ted Schiafone.

In an email, Schiafone said he requested to delay implementation of the $2 million/occurrence, $4 million/aggregate rate for 2019 until more information could be gathered. The city of Oceanside agreed with that request, which means the old rates are staying the same for now.

Several service providers attended City Council’s Dec. 19, 2018, meeting to voice their concerns about the increased insurance rate requirements.

Last year’s harbor service provider permits were slated to expire on Dec. 31 and would have needed to be renewed with the new insurance rates prior to Jan. 1.

“I just think that having that much insurance for a small business is outrageous and ludicrous and ridiculous,” said Jerry McArdle, an Oceanside Harbor service provider who owns De La Sol Canvas, at the meeting. “There’s no way that’s ever gonna happen.”

McArdle told council members the change would increase his yearly rate from $400 to $2,200. He said he could see such a requirement for a bigger company with 20 or more employees, but the new rates would be a “bit of a jump” for a small business like his.

“I’d like to keep my business going but when I’m paying that much for insurance, it’s kinda gonna shut the thing down,” McArdle told council members.

Jim Oberg, a representative of Douglas K. Smith Insurance Services, Inc., told council members on Dec. 19 that none of his company’s clients on the West, East or Gulf coasts have to pay as much as the new insurance rates would cost.

The current $1 million for occurrence, $2 million aggregate rate is the “industry standard nationwide,” said Steven Halford, owner of Bristol Yacht Services, at the council meeting.

“That is generally true, however, the marine industry has been looking at increased insurance requirements in order to protect themselves,” Schiafone said in an email. “As an example, the typical liability insurance requirement to keep your boat at a Harbor used to be $300,000. The industry standard is now $500,000.”

The following morning after the meeting, Councilman Christopher Rodriguez sent an email asking if something could be done to help the small business service providers, according to Schiafone.

The city manager, attorney and risk management determine insurance rates for all city property.

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