Risk Management

Good seamanship, systematic and aggressive maintenance, safety training and maintaining a culture of safety all contribute to prevention. Insurance and legal protections like incorporation spread the risk and help you recover from an unfortunate incident. Crew contracts can both reduce the likelihood of problems and provide protection in some cases.

Understanding risk

Fishing is a complex enterprise. Listen to a podcast (below) by former Alaska Sea Grant business specialist Glenn Haight on ways to think about five traditional risk management areas often seen in fishing operations: Production, markets, legal, financial, and human.

Safety

Operational safety is paramount in fishing operations. Vessels are complex, powerful machines operating in extremely challenging environments where the risk of damage, injury and death is significant. Safety awareness, safety culture and safety training are inherent responsibilities of every skipper. Under maritime law the captain bears full responsibility for any injury or damage sustained in service of or caused by the vessel.

Alaska fishermen are fortunate to have ready access to some of the world’s best marine safety training, including that offered by the Alaska Marine Safety Education Association. AMSEA provides USCG-accepted commercial fishing drill conductor training in ports throughout Alaska that is geared to Alaska’s fisheries and cold waters.

Other available resources include the maritime training program at the Alaska Vocational Technical Center (AVTEC) and the USCG's FishSafe site, which has a wealth of information including federal requirements, Notice to Mariners, forms, light lists, statistics, etc.

Insurance

Marine and vessel insurance includes several kinds of products, each of which provides a measure of protection from a different kind of risk.

• Hull and machinery coverage is intended to replace equipment lost or damaged.
• Protection and indemnity coverage pays the costs incurred by crewmembers, other people, or property hurt on board or damaged by the vessel or its operations including salvage.
• Other products can cover cargo, oil spill recovery, passengers and much more.

Lenders typically require insurance to protect the asset for both themselves and the borrower over the life of the loan, and increasingly Alaska harbors require proof of insurance before moorage is granted.

When comparing insurance options, remember that comparing premium rates is only a part of the insurance equation. Learn how large the firm or organization is, who the underwriter is, how claims are processed, etc. Talk with brokers, other vessel owners and lenders. There are several insurance pools in Alaska operated by fishermen and fishing associations. See the publication below about how to get the most value when buying fishing vessel insurance.

Glenn Haight, former Alaska Sea Grant business specialist, has also created a podcast (below) that discusses insurance terms, the Alaska Fishermen's Fund, keeping insurance costs down and ways to cover your crew.

While not an insurance program, Alaska's Commercial Fishermen's Fund provides for treatment of Alaska licensed fishermen injured while fishing in Alaska. Claims are reviewed in light of your other policies (particularly vessel P&I), but they may be able to reimburse you for your deductible payment. It is important to encourage your deckhands to get their crew licenses as soon as they start any boat work, so that any injuries in the preseason boat yard will be eligible for reimbursement.

Crew contracts

A signed crew contract is a legal document that minimizes risk for both the skipper and the crewmember by spelling out what duties are expected, how shares and expenses are divided and other details that could otherwise lead to conflict. A key component is disclosure of pre-existing medical conditions, which could be important to the skipper in defending against an injury claim.

A crew contract should include information on the crewmember that includes social security number, winter address and health insurance information. Alaska Sea Grant has created a draft crew contract (below) to get you started.

Alaska laws regarding crew wages

The Alaska Department of Labor has information on wage and labor laws as applied to skipper and crew.

Last will and testament

Now that you own business assets or have family obligations, another crucial legal document you should create is a will. Commercial fishing is a risky and physically demanding occupation, so protection of your family and loved ones is important. See the Creating a Will page on this website for details on incorporating fishing assets into a will.