Newport debates insurance, indemnity and classification for rental moorings

Newport City Solicitor Chris Bien told a packed workshop the city is enforcing a liability-insurance requirement for rental (commercial) moorings intended to keep the city from assuming financial risk if a serious injury or property loss occurs in the harbor.

"The what it requires is a liability policy for the renewal of the rental mooring and places limits of, dollars 1,000,000 per occurrence and 2,000,000 in the aggregate," Bien said, and he stressed that the ordinance also "requires the city to be an additional insured on that policy." The solicitor and Harbormaster Steve Land described the insurance mandate as a routine protection municipal governments require when public facilities are used for revenue-generating activities.

The requirement, adopted by ordinance last year and now being applied to rental moorings, has drawn sustained public comment from mooring holders and brokers who said they need clearer guidance on what exactly the city will accept and on how the policy will be administered. Several permit holders said they already have marine or business liability coverage at modest annual premiums; Harbormaster Land reported seeing quotes as low as $236 and told the commission he has helped people locate insurers.

"I specifically asked the insurance company for what the city was asking me to provide," said mooring holder Charlotte Johnson during public comment, saying she was offered a $239 annual quote for a policy that would name the city as an additional insured. Harbormaster Land said the city will review certificates of insurance (COIs) and reject coverage that contains exclusions or is secondary to other policies.

Some council members and speakers urged the city to give mooring holders time and concrete criteria before enforcing the Nov. 15 deadline mentioned in the ordinance. Land said the November date applies to permit applications from holders who have had no contact with the harbor office, and that staff have been postponing forfeiture actions for people actively working to provide proof of coverage. He suggested the administration could accept broker or manager policies that add the city as additional insured for this year as a stopgap.

Public commentators and several councilors pressed the city to distinguish commercial (rental) moorings from private/residential moorings and from seasonally managed rental arrangements. Harbormaster Land and the solicitor said private (br idal) mooring holders already must submit proof of hull and liability insurance tied to the registered vessel; the new requirement applies to rental moorings because the permit holder may not know who is using the mooring at any given time and the activity is treated as a commercial use.

Speakers also raised procedural concerns about subleasing and transfers. Several permit holders said they have used brokers or mooring-management companies for decades and that brokers already list the city as additional insured on their policies. Harbormaster Land said the city had originally required the COI to be issued in the permit holder's name; staff are now reviewing whether management-company policies or simple written agreements naming the city as an additional insured can be accepted in lieu of separate policies for each permit holder.

The workshop also touched on a proposed reclassification to create "yacht club" moorings distinct from commercial rentals. Harbormaster Land said the Coastal Resources Management Council (CRMC) uses the term and is reviewing the city's proposed, more detailed definition; under the draft language yacht-club moorings would be used "exclusively by yacht club members or members of other clubs through reciprocity agreements." Council members asked that any yacht-club designation be explicit in forbidding general public rental if that is the council's intent.

Several speakers warned the city about the legal meaning of indemnification clauses. Longtime mooring holder and business owner Pete Dent told the workshop, "never indemnify another party for anything," arguing that indemnification can expose a small permit holder to open-ended legal costs. Solicitor Bien and staff said the primary aim is to have the city be an additional insured on a liability policy so the city's insurer would defend and indemnify the city where coverage applies, but they acknowledged indemnity language in contracts is a separate concern that should be clearly defined.

Workshop participants frequently asked for clearer written criteria and for the city to provide insurance contacts or a Q&A so permit holders and brokers can obtain acceptable coverage before the city enforces forfeiture provisions. Harbormaster Land proposed accepting management-company coverage that lists the city as additional insured for the current renewal cycle while officials pursue longer-term clarifications and any ordinance edits.

Councilors and public commenters also urged the administration to proceed carefully on the related topics of permit transfer limits, the treatment of LLCs and the creation of yacht-club classifications. Harbormaster Land said transfers and the broader permit regime were taken up after CRMC guidance in 2019, and that staff will bring further workshops before final legislative action.

The workshop produced no formal votes; staff said they will return with more detailed guidance, possible language revisions, and options for short-term accommodations to the November deadline so active permit holders who are seeking insurance are not forfeited automatically.

Ending: City staff and the Waterfront Commission said they will follow up with more workshops and written guidance for mooring permit holders, brokers and insurance agents before any final enforcement steps are taken.