Captain and Crew Contracts

Each year, innumerable pleasure boats move up and down the East Coast, following the seasons and the particular needs of their owners. In many cases these trips are made with someone other than the owner at the helm.  Usually everything is fine, but occasionally accidents happen. As an owner here are just a few things that should cross your mind before having someone deliver your boat:
  1. Does existing insurance cover the planned activity?

  2. Who is responsible for medical payments if someone gets hurt?

  3. Who pays in the event of major property loss?

If you are a licensed Captain, and you anticipate making a delivery, have you thought about:
  1. Are you covered by the owner's insurance policy?

  2. Could you be responsible for maintenance and cure of a Jones Act Seaman?

  3. Will you be reimbursed for any out-of-pocket expenses or will expenses be paid up front?

These are common issues in coastal deliveries.

Historically, it was common for licensed Captains to operate on a handshake - many still do. This is fine so long as, well, things are fine. But in a worse case scenario - if a crew member was seriously injured or died - a handshake would leave too many questions unanswered. For instance, even without a showing of negligence, an injured crewmember has the right to maintenance and cure under the Jones Act (see Marine Employment), entitling him or her to lost wages, medical expenses and lodging until reaching maximum recovery. Who is responsible for maintenance and cure in a handshake deal? It primarily depends on who hired the crew - the boat's owner or the ship's master (presumably the hired Captain). On a handshake deal, this may literally become a million dollar question - one that probably would not be covered by insurance, and might lead to financial ruin and bankruptcy. Wise practice, therefore, is to address these questions in writing and in advance.

There are myriad other issues that should be discussed and agreed upon in advance any time that a delivery is planned. Here are just a few of the issues that an appropriate contract will address: liability insurance (whose responsibility is the appropriate insurance?); seaworthiness (what are the respective obligations if an unseaworthy condition is discovered?); expenses (cash advanced; reimbursement, credit card?); crew's wages (the law requires that crews be paid off as soon as the voyage ends); rate of pay (is a "day" 8 hours or twenty-four hours?); and decision-making authority (who has final say about route and weather). If the owner is to be aboard, additional provisions should be in place if the Captain is to have responsibility for training or teaching as well as the normal responsibilities of being the ship's master.

Captains seeking to conduct deliveries and owners seeking Captains face significant exposure to liability - often without knowledge of the real risks that are faced. These risks can be mitigated, however, with a small amount of advanced planning. It is OK to seal the deal with a handshake, but make sure that the fine print is taken care of as well.