Cost Sharing: Definitions And Issues Related To.

[sailormandave]

This is a continuation of discussions I've been involved with from "Just exactly who can and can't advertise their yachts here" and Why Would Anyone Pay For The Privilege Of Working On Somebody's Boat? forums. However, I think the issue of cost sharing: definitions and issues related to does not really fit either of those, so I've started a new topic on that subject here.

As I've stated in some of the above forums, when I have crew join me, I expect to cover all costs related to the boat myself: The boat itself, insurance, maintenance, etc, but I have everyone on board including myself contribute to costs directly associated with that cruise which go beyond just provisions but include things such as fuel for example. I do this by keeping a log of the costs and having everyone pay equally to these costs. The board administrators have clearly stated that this is asking more of crew than they wish to advertise in their forum and I respect that. This thread is not about what constitutes acceptable ads on this site. My question here comes from issues raised where people have said that captains involved in sharing costs more than provisions as I do constitutes boat-sharing, is an attempt to cloak commerical business and leads to increased liability for boat and crew as well as problems with insurance companies an the US coast guard. These are arguments I do not understand at all and would appreciate those knowledgeable sharing more information as to why this may be true.

I write this from my perspective and I can speak with absolute certainty about what I do but I know there are many boat owners/captains who frequent this board who are in a very similar situation.

I will start this discussion by breaking down some of these comments and include what I have learned about each. If you have other information, please comment - i'd really like to undestand this better.

1) Boat-Share: It's been said that asking crew to share more than provisions such as I do constitutes boat sharing. In my mind, since nobody but me pays for the cost of the boat, it's maintenance, insurance, etc and what I do is have everyone including myself contribute to the cost of cruise, this would constituted cost-sharing, not boat sharing.

2) Commercialism: One issue is that I believe different agencies and different countries may have different definitions of where cost-sharing ends and commercialism begins, but it seems to me in general, when a captain/boat owners bears all the costs of a boat and only asks crew to share in costs he/she is clearly spending money to go cruising and not trying to make finanical gain from it. I know even after crew contributions, I still part with thousands of dollar a year in my enjoyment of cruising. I dont' see why this would be considered a commercial enterprise.

3) Insurance: I actually spoke at length to someone who works in the insurance industry and had dealt a lot with setteling unusual claims. While he was unable to furnish a specific document, he commented that having friends/crew contribute to the operating costs, but not the boat itself would in no way constitute being commercial in the eyes of the insurance industry. Please explain to me what insurance issues are raised by having crew share costs which go beyond food.

4) Legal: I'm no lawer and would love to hear from one. My understanding of law is that one owes a different duty (or standard of care) to different people depending on the realtionship with them. At the low end there's trespassers to whom the only duty is to not harm. In the middle there are people who are invited to share an space or experience, but are not paying customers. The most duty and highest standard of care would be owend to paying customers. I think clearly, crew contributing to food only are not paying customers and are in the middle group. However it also seems to me that going beyond food and having crew or friends pay their proportion of fuel, mooring fees, etc still does not make them paying clients when the owner still is sharing the costs and paying for the boat. I don't see how exactly what costs are shared, as long as they are truly shared fundamentally changes the relationship or standard of care required. Again - someone who knows more about the legality of this please explain it to me.

5) Tax/IRS - I read an article which indicated that one can share all costs associated with a ventrue and it is not income as long as you are sharing actual costs proportional to the use. I would interpret this to mean one could even go beyond costs directly seen on a cruise as long as one is not attempting make a profit or have their share of the expense covered by crew. Anyone know differently? (I hope to ask my tax lawyer this soon and will report here if I learn anything new)

6) Coast guard and other agencies: First of all, it seems to me many different agencies will have different definitions of what constitutes cost-sharing and what constitues commercialism and it seems prudent that boat owners and crew should do their research prior to a cruise to see how any relevant agencies will view their status based on their practices. In a previous post someone said the us coast guard sees any consideration as defining a commercial enterprise. I noted that I found at least one place in coast guard literature where the coast guard defined consideration as: "Consideration means an economic benefit, inducement, right, or profit including pecuniary payment accruing to an individual, person, or entity but not including a voluntary sharing of the actual expenses of the voyage by monetary contribution or donation of fuel, food, beverage, or other supplies." (http://a257.g.akamaitech.net/7/257/2...cfr24.10-1.pdf) From this it seems clear to me that the coast guard is okay with cost-sharing that may even include sharing fuel, etc as long as one not tring to make a profit or have their own expenses covered. If anyone reading this is involved in the coast guard or has real knowledge of actions being taken by the coast guard other than this, - please share them.

7) Cost-share defined: I've seen a great attempt in these forums to come up with a fixed crew contribution which defines cost-sharing. This figure seems to be $20/day. It seems to me that cost-sharing can not be defined this way. By defnintion it is a sharing of costs. To know weather the crew contribution exceeds this, one must know the costs which they are asked to share. It seems to me the costs seen on a cruise and what contributions it takes to share such costs will vary greatly depending on factors such as the crusing area, boat, lifestyle, and number of people sharing the costs. (I'd like to note, that I think what this board chooses for their submissions or what people may feel is a miximum ethical amount to share are seperate issues that do not fundamentlly change what cost-sharing is.)

[Mahrik]

Just a quick question.. if you were planning on driving cross country, and friends wanted to come, would everyone help pay for fuel/hotels, or would just the car owner be responsible?

[Lighthouse]

I'll start the ball rolling here.

Firstly, never call these "cost-sharing" strangers CREW! The term "crew" implies that the owner/skipper of the vessel has contracted these "people" to serve as employees aboard the vessel. Whatever the owner agrees to remunarate these "employees" is by agreement between the two parties. Crew does not "pay for the experience". Further, it is expected that the owner of a vessel is liable to cover travel expenses for "crew" to get to the boarding point and to cover expenses for crew to return to their homes.

I only state the above as reference to what could happen if a bad dissagreement happened on board - unlikely but possible. In terms of the law, an owner of a vessel is liable for a crewmember's air ticket home - all the way to his home town. Should someone be injured aboard (God forbid) the vessel's insurance must cover the whole medical expense (or the owner out of his pocket - and this could run to hundreds of thousands of Dollars). This vessel's insurance must extend to cover employees aboard the vessel as well as public liability. No "waiver" that crew sign will hold in any court - no-one can get anyone to sign away their rights.

So, for someone advertising for (inexperienced) strangers to join them aboard a vessel for a "cost sharing cruise" should never advertise for CREW - advertise for a "cheap sailing holiday" or similar. There are really serious implications in using the term CREW (I have mentioned only one of many).

The "cheap sailing holiday" however, immediately implies "charter".

I don't have the answers.

That is my input on the term "Crew".

[minefield]

It seems like it depends on where you are from, As to what you charge, It was only a couple of weeks ago that down at the yacht club one member was telling us a story about a fast-net race starting from England he applyed for a crew member on . He was told that his share was 400 pounds. When he contacted the skipper to see if there was some mistake, the English skipper was taken back as he said that everyone pays over here.

My opinion ; If you buy a boat or a car "you buy what you can afford to run". I know when I cruised the Pacific Islands the crew and I had shared food costs only !! Because, if they did not come I was going anyway, It was my boat, I knew what the trip would cost and the last thing I would do was have to take on a crew and squeese money out of them to pay my costs.

Over her in N.Z. we race every week and we have a problem with the marina costs going up and up..... I would be laughed at if I said to my race crew; How about putting for the marina costs or putting in for the insurance.

My thought's

Graham

[Nausikaa]

Graham,

I think the race you were refering to is the Fastnet Race. It is something of a British equivilent to the Sydney - Hobart.

I am not a racing man but I believe the practise in this case to be that the vessel and crew enter a race as a team and therefore share the costs. I am not defending the method of collective payment, just pointing out how I believe it works.

Aye,

Stephen

yacht NAUSIKAA

[Harbor_Pilot]

Originally Posted by Mahrik

Just a quick question.. if you were planning on driving cross country, and friends wanted to come, would everyone help pay for fuel/hotels, or would just the car owner be responsible?

Mahrik,

I understand where you are going with the thought provoking question, but the circumstances are quite differant than sailormandave's concerns. In the cross country automobile trip you will not encounter the Coast Guard, Customs, Maritime Law, and a whole lot of other things.

I have not yet found an easy, well defined, answer to, yet; although I have been searching studioulsy.

Read this, especially the last two paragraphs:

http://www.marlegal.com/

On the left side is a link to “Maritime Law” <-- Click that.

Than Click on Introduction, it says:

Introduction to the Law of Admiralty

The law of admiralty is a complex area of law which, as will be discussed below, goes back to antiquity. It is a classic discipline and, it is said, the only true body of international law, a lingua franca through which people of different nations can come together to deal with the promise, profits and perils of voyages at sea. It also includes, however, some recent developments borne out of the economic and environmental challenges of the late twentieth century. In addition to traditional commercial topics, admiralty can be said to include the laws which regulate the ever increasing recreational boating activities such as cruising, fishing and racing. Once an elitist sport and lifestyle, yachting has become so widespread as to require government regulation in all its forms. This article is not meant to provide a comprehensive description of maritime law or specific legal advise on any given topic. Rather, it is a general overview of the subject which attempts to address both traditional commercial areas, such as carriage of goods, general average and maritime liens, as well as topics of interest to the yachtsman and recreational boater. We will have reached our goal if this brief discussion can trigger a spark of interest and introduce the reader to this intriguing and fascinating discipline.

I found most of the other links on that page “Maritime Law” rather informative.

For a better idea of the complexity of legal issues at sea, as compared to land, scroll through these web links.

http://www.admiraltylawguide.com/codes.html

http://www.admiraltylawguide.com/sitemap.html

http://www.admiraltylawguide.com/

http://www.admiraltylawguide.com/interconv.html#VA

http://www.marinelawdirectory.com/

[sailormandave]

I actully liked Mahrik's analogy. I think he summed up my page long question fairly well with a one sentence example. Why would having friends (Notice I didn't use the C-word) share the cost of fuel lead to such different legal, insurance other issues and make you be considered a comercial business on a boat, but not a car. Please note, i've been talking about situations where the owner asks no compensation for the use of the boat (or car in Mahrik's analogy).

I think Aqua Man's answer (Thanks for that contribution Aqua Man) that Maratime Law is different than an individual country's law is an obvious difference. However, I still see nothing in the laws he so nicely provided which indicate that once people joining a recreational cruise contribute more than the price food, the cruise becomes a commercial venture. Many people here have been very vocal in saying that once people contribute more than food or more than US$20/day a cruise becomes commercial venture and if frought with all the issues of a business. This idea still hasn't been explained and I encourage those who feel so strongly about this to please explain as it can have a huge affect on many captains and the people who join them.

Lighthouse - thanks so much for your comments on the legal definition of Crew. It never occured to me a term used to casually could have such results, but I can see that it could. Your comments also make me think that definition of terms could be very much related to this issue as people who might think they are talking about the same thing - might not be based in different word uses in different areas or different situations.

For my initial Questions in this thread, I'll change "crew" to: People who join a boat owner on a recreational cruise who help in the operation of the vessel, but are not paid crew; people who if contribute to the cost of the cruise do so at no greater rate than the boat owner and in no way contribute toward the cost of the vessel.

I also thought your term "sailing holiday" was an interesting one. When my cruises were first described this way it first rubbed me the wrong way because as you said it brings up thoughts of chartering and commercialism. However after thinking about it, it made me think that really - it is a holiday or vacation. The purpose is recreation or fun - There's no delivery, nobody is paid or paying, so it really is a bunch of people on holiday. I guess a cruise which is for recreational purposes (not a delivery for example) that does not hire crew and for which nobody is being paid really is a "sailing holiday" Would you agree with that?

[Lighthouse]

I also thought your term "sailing holiday" was an interesting one. When my cruises were first described this way it first rubbed me the wrong way because as you said it brings up thoughts of chartering and commercialism. However after thinking about it, it made me think that really - it is a holiday or vacation. The purpose is recreation or fun - There's no delivery, nobody is paid or paying, so it really is a bunch of people on holiday. I guess a cruise which is for recreational purposes (not a delivery for example) that does not hire crew and for which nobody is being paid really is a "sailing holiday" Would you agree with that?

Yes, that is exactly what this is. Now, what the implications are for hosting guests on a "vacation" I do not know. The fact that this "vacation" is aboard a sea-going vessel owned by you I am sure has some issues in regard to documentation of this vessel as well as documentation for the master.

I'm afraid that there are more questions than answers.

[JeanneP]

The automobile analogy is not workable for many reasons. When you drive cross-country with friends sharing the costs, you already have the license to allow you to do this, and usually your friends will also have driver's licenses so they could help with the driving. I've never known anyone asking for more than a share of the fuel costs and maybe tolls along the way, and of course, everybody pays for their own meals and lodging. On the other hand, if you are headed to the beach for the day and take some friends with you, their contributing towards fuel would be a nice gesture but there is no increase in costs because they came with you, is there? Not unless you are going there only because your friends need someone with a car to take them. Then, even though you will probably not be caught, you're running a "gypsy cab" and taking passengers for hire.

Now for a yacht. If you are a licensed captain you can take out passengers for hire. They pay you, you run the boat and supervise their activities. If you are not a licensed captain, you cannot charge to take people out on your boat. As has been mentioned, the USCG has loosened its regulations so that shared expenses are no longer considered financial consideration, but there remains the legal - and ethical - definitions of shared expenses.

I don't believe that any of the contributors so far are lawyers familiar with maritime law, and thus this discussion is to a great degree an exercise in speculation with regard to what is considered a financial consideration.

From our own experience, I do not consider anything other than actual costs directly incurred by crew to be legitimate "shared expenses," and with rare exceptions, that is food and water (if one has to pay for water).

The one time we took on a fellow as crew for a passage we asked for no financial contribution at all, considering the work he did (standing watch and doing ALL the dishes) a fair compensation for the very small increase in food and water costs (we had to pay a small fortune for water in this situation). We we did not "need" an extra person on board, we really took the fellow with us because he was a nice young fellow who was looking for passage across the Pacific and we thought (rightly) that he would make our life easier with the extra hand aboard.

If you are cruising alone and decide to run the engine, that's a boat cost, not a cost directly attributable to additional people on board. Day cruises going nowhere in particular and staying in the same general area - if you're inviting strangers on board, you're not asking for "crew" to help with a passage, are you? No matter how you split hairs, they are not crew, they're passengers. Perhaps you are not making a "profit", in the cold business accounting sense, but you are asking for money from people to take your boat out for a sail. How nice that you would like to share your experiences with others, but don't kid yourself that this is a crew situation. So pay for an advertisement so you can take out strangers who will help you pay for your sailing trips.

And then we get to this board. The Free Crewfinder boards were started because many passagemakers would like an additional crew member or two to help with long passages, and isome company along the way, particularly in the case of singlehanders.

Some boats must have an additional crew member on board to meet insurance requirements for blue-water passages. What expenses would they feel comfortable asking for considering that without that crew member they couldn't make the passage?

The crewfinder boards are a nice service, but are not intended to be used by commercial enterprises, and I think that self-righteous attempts to split hairs over what constitutes taking on passengers for hire is unseemly when, as I see it, the only reason for the argument is to avoid paying for advertising for these guests. Well, perhaps also forestalling the chance that a paying "crew" might realize that there is more to this than they first thought.

[sailormandave]

JeanneP: Thanks for your detailed thoughts. While I understand your position, I'm not sure I quite understand your argument and conclusion. Instead of talking in theory, let me give a real life example from a recent cruise or "Sailing Holiday" which I think involves many of the thoughtful points you have raised.

Although I've been out of college for many years, I've stayed freinds with many of the people I met in college. In recent years a few of them have taken up sailing and we began to talk about doing a sailing vacation together. My recent purchase of a cruising boat which I keep in the BVIs offered a much cheaper solution than chartering. I offered free use of the boat if everyone (myself included) agreed to split the costs of the cruise such as provisions, fuel, mooring fees, etc. Everyone agreed this was very fair and this past December we had a great week-long sailing holiday. As it was a holiday, we lived it up and spent a lot of money on good food, wine, beer, and usually picked up a mooring for $30/night. We kept a log and split all these things equally among us and ended up spending about $275 each for the week-long trip. The issue I actually ran into is my friends thought it was unfair that I was providing a new boat for everyone to use and still contributing as much as them for shared expenses, especially since this was so much cheaper than a charter we had originally considered.

In my mind this is very analgous to going on a road trip with these same friends where one of us might have provided a sport utility vehicle and we split the costs of fuel, food, camping fees, etc, but nobody compensated the owner for the use of the vehicle. I'll agree that in a different country or outside of a countrie's territorial boundary different laws may apply but fundamentally I feel it's the same situation.

If I understand your arguement correctly you are saying my friends were actually paying passangers and that I should have had a captain's license. You are arguing that since I told my insurance company my boat was for pleasure use, not commerical, my insurance was likely invalidated on this trip. Are you arguing that I had the same liability exposure and same expectations of standard of care as sailing school operating in the same area who is taking paying clients out? If this is the case, I would image the majority of pleasure boaters in the United States anyways are in serious trouble.

There's another point to your arguement I'd appreciate if you could explain to me in more detail: It seems you put a large emphasis on what one otherwise would have done. You make the argument that if a boat owner did not have crew or other people onboard, they would have done the cruise anyways and would have seen all the costs but the additional persons food anyways. That may be true in your case. In my case, what we otherwise would have done is spend much more money on a charter. While what an owner of a cruising boat might theoretically otherwise have done may have a huge influence on what you think is ethically right for someone joining you to contribute, I have a difficult time believing insurance companies, the coast guard, the court systems etc. really care what you might otherwise have done. It seems to me they care weather your trip is commercial or pleasure and again, I don't understand the idea that if my friends and I would have shared the price of food this would have been considered a pleasure trip, but by sharing fuel costs is suddenly becomes a commercial trip.

This brings me to my last point and one that really gets to the core of my confusion. One thing I hear you saying and others is that once people on board contribute more than food, they are passengers or customers and that to argue about the difference between someone contributing to fuel for example and passenger who simply pays for a boat is "splitting hairs". Let's look again at real life examples instead of talking in theory: Years ago, I took a bareboat course from a sailing school in the BVIs - the same place I took my friends sailing this winter. That trip was also a week-long experience which cost about $1,300/person which included basic food (booze extra), instruction, boat use, etc. The company did not graciously provide the boat, but charged a set fee which paid for an instructor's salary covered the cost of the boat, advertising, etc and produced a profit for them. It seems to me that when one compares these two trips, one is not "splitting hairs", one is looking at two extemely different situations. In one case, a business is asking a fixed price which is clearly comparabe to other businesses in the trade who are operating to make a profit. The captain is being paid and making a profit. It seems to me if anyone is trying to split hairs it is those who argue that a cruise is private if food costs are shared, but once fuel is shared, it becomes a commercial enterprise. It seems to me, if your are sharing the costs, you are cost sharing, not operating for a profit.

JeanneP - If you could explain your points in the context of the actual trips I've described above, perhaps they'll get through this thick head of mine better. Thanks again for your comments.

[Swagman]

Re the quote above about cost sharing on one Fastnet Race entry.

It's tosh to suggest all race crew in the UK chip in sums like £400 ($800) for such participation. Most crew will chip in towards food / grog costs - but thats it.

But there are what can only be described as 'race charter' yachts who activity seek paying crew - not just for Fastnet Race but also Cowes Week and other events like ARC - and it sounds like this Kiwi chum met up with one of those. I'd respectfully suggest most such 'race charter' yachts are insured for paying crew.........and usually pay to advertise such spots in regular sailing magazines.

But I'm also wondering where this post (like the others on same subjects) is likely to lead us (apart from to sleep that is)?

It's clear many many skippers do charge crew. Some a little, some a lot. Views either way on this site won't change that.

It's clear some semi professional charter boats try and imply they are simply seeking cost sharing crew - when in truth they are doing it to make money. This site can at least help change that thruogh this medium.

And it's clear the management does not only dislike 'hiding' such semi professionals, but additionally can't take the risk of being seen to promote such - for obvious legal reasons.

So with respect to all sides - why can't we let this subject just go..............

Cheers

JOHN

[Lighthouse]

Although I've been out of college for many years, I've stayed freinds with many of the people I met in college. In recent years a few of them have taken up sailing and we began to talk about doing a sailing vacation together. My recent purchase of a cruising boat which I keep in the BVIs offered a much cheaper solution than chartering. I offered free use of the boat if everyone (myself included) agreed to split the costs of the cruise such as provisions, fuel, mooring fees, etc. Everyone agreed this was very fair and this past December we had a great week-long sailing holiday. As it was a holiday, we lived it up and spent a lot of money on good food, wine, beer, and usually picked up a mooring for $30/night. We kept a log and split all these things equally among us and ended up spending about $275 each for the week-long trip. The issue I actually ran into is my friends thought it was unfair that I was providing a new boat for everyone to use and still contributing as much as them for shared expenses, especially since this was so much cheaper than a charter we had originally considered.

IMHO - Herein lies the problem! Friends. (and/or family/etc.)

A very different set of rules will apply when you advertise for strangers to participate in this "holiday" activity. As I have stated before, you will get away with this until there is a serious accident or serious disagreement with one of the participants (I will not elaborate here how this could backfire on you).

Am I right in assuming that your boat is currently under charter contract and that you have the use of it for a couple of weeks a year? (Please correct me if I'm wrong). If so, does the company's insurance cover extend to these private activities (i.e. Advertised "Sailing Holidays" during your own use period)?

Interesting?

[sailormandave]

Thanks for the point on "Friends". I guess I've assumed that coast-shared pleasure boating vs. commercial boating would be defined by weather your are going beyond sharing costs and trying to make a profit, not weather friends who join you are friends from college, a local sailing club or the internet. I suppose one could argue that posting a note online or at a sailing club poster board are forms of advertising which I guess is a trait of commercialism, but wouldn't this be similar to people posting notes about sharing a ride & gas, etc?

This is something I need to look into - Thanks for the heads up on this point.

[Lighthouse]

Am I right in assuming that your boat is currently under charter contract and that you have the use of it for a couple of weeks a year? (Please correct me if I'm wrong). If so, does the company's insurance cover extend to these private activities (i.e. Advertised "Sailing Holidays" during your own use period)?

[JeanneP]

Originally Posted by sailormandave

In my mind this is very analgous to going on a road trip with these same friends where one of us might have provided a sport utility vehicle and we split the costs of fuel, food, camping fees, etc, but nobody compensated the owner for the use of the vehicle. I'll agree that in a different country or outside of a countrie's territorial boundary different laws may apply but fundamentally I feel it's the same situation.

I tried to make the distinction between friends and strangers. When you advertise for strangers to join you on your boat, you are not choosing one of two options - that of chartering a boat with friends, or sailing with friends on your boat. You are advertising for strangers to sail on your boat in return for payment of money that you state is "sharing expenses." I assume you wouldn't use the crewfinder forum to advertise for your friends to join you sailing on your boat?

I did not get into the insurance aspects of what you tell your insurance company, because if the boat is in charter, the insurance covers paying charter guests; most responsible charter companies ask for statements of competence from the charterers or, if absent competence assurances, require that a licensed captain be hired by the charterers.

It seems you put a large emphasis on what one otherwise would have done. You make the argument that if a boat owner did not have crew or other people onboard, they would have done the cruise anyways and would have seen all the costs but the additional persons food anyways. That may be true in your case. In my case, what we otherwise would have done is spend much more money on a charter. While what an owner of a cruising boat might theoretically otherwise have done may have a huge influence on what you think is ethically right for someone joining you to contribute, I have a difficult time believing insurance companies, the coast guard, the court systems etc. really care what you might otherwise have done. It seems to me they care weather your trip is commercial or pleasure and again, I don't understand the idea that if my friends and I would have shared the price of food this would have been considered a pleasure trip, but by sharing fuel costs is suddenly becomes a commercial trip.

Again, what you do with your friends is not the issue. The issue is advertising for strangers to join you as "crew". You now own your boat, so there is no option: "spend much more money on a charter". You are taking your boat out, correct? Not paying someone else for the use of their boat (a commercial transaction). Therefore, the question is, would you sail your boat alone? With only friends aboard? If neither, how is asking strangers to pay to sail with you on your boat not a commercial activity?

Years ago, I took a bareboat course from a sailing school in the BVIs - the same place I took my friends sailing this winter. That trip was also a week-long experience which cost about $1,300/person which included basic food (booze extra), instruction, boat use, etc. The company did not graciously provide the boat, but charged a set fee which paid for an instructor's salary covered the cost of the boat, advertising, etc and produced a profit for them. It seems to me that when one compares these two trips, one is not "splitting hairs", one is looking at two extemely different situations. In one case, a business is asking a fixed price which is clearly comparabe to other businesses in the trade who are operating to make a profit. The captain is being paid and making a profit. It seems to me if anyone is trying to split hairs it is those who argue that a cruise is private if food costs are shared, but once fuel is shared, it becomes a commercial enterprise. It seems to me, if your are sharing the costs, you are cost sharing, not operating for a profit.

First, you need not make a profit for the operation to be a commercial venture. Secondly, why are you comparing a qualified instructor in a sailing school operation to your operation of your boat? You paid for a sailing course complete with instructor, room and board provided by the company. The boat and instructor are there operating solely because you (or another student) hired them, and the boat would stay in port if there were nobody hiring them. If the only reason you are taking your boat out sailing is because you have advertised for, and found, strangers to come along and share the cost on your boat, I fail to see how that is not a commercial activity.

The discussion of the difference between taking passengers for hire, or actually seeking crew is relevant to those using this board's free crewfinder. And that is perhaps where the hairsplitting comes in. When somebody argues that $25, $30, $40 per day is cost sharing, those of us who own and operate our boats for our personal pleasure are keenly aware of what it costs to operate the boat, and how much somebody coming along adds to those costs. And I don't think it's even as high as $20 per day, even in French Polynesia or the BVIs. But nevertheless, looking for payment in order to take one's boat out, and using a Free Crewfinder to advertise for this purpose is the issue.

[sailormandave]

JeanneP: Thanks again for an in-depth response. Let me ask a simple question to see if I accurately understand what you believe being commerce - at least in regard to sailing.

In the case I described of my January trip where I provided the boat and all my friends including me contributed equally to operating costs such as food, fuel, etc, you seemed to agree with me that this would not be considered commercial. I'm glad we could at least agree on that! Please correct me if I'm wrong on that.

Given that, please give me your reaction to this:

On another trip, I had long-time friends join me, but we still had room available and wanting to expand our sailing community, I put a post online and ended up having one person join whom I did not previoiusly know (I'll call John). Again I provided the boat and everyone onboard including me contributed equally to food, fuel, etc. If I undertsand your view on commerce correctly, you would say I was engaged in commerce with John, but not the other people on the boat.

[DancingBear]

I read this string and everyone has good ideas; i.e. questions that would have to be asked and answered prior to an insurance carrier providing a defense and coverage for an action brought against the boat owner for property damage or injury due to negligence. The decision would be made on the preponderance of evidence collected specifically related to the event in question. There isn't any one item that I've seen posted here that would cause a coverage problem by itself. The sum of the facts is what counts. These coverage decisions are typically made by a Judge through a Declaratory Action proceeding; maybe a Federal Judge applying Admiralty law, but not necessarily. The insurance companies will be looking to the court for relief from providing coverage, but the good news is, when there are grievess injuries and property damage, the Judges will normally find for the insured. What's more, judges will often put off rendering their opinion on coverage until the underlying tort action is adjudicated. This means the insurance company(taking the least risky route) is on the hook to provide a defense through verdict, a very expensive and risky proposition which they won't proceed with; instead they will opt to settle the matter, pleasing most parties, including the Judge.

As for getting cited by the Coast Guard, if someone is badly hurt and the boat owner mentions during the immediate investigation that he or she accepted 10 cents (it won't matter whether he says it was for, i.e. victuals, diesel, moorings, etc.), that boat owner is probably going to get cited. He or she might be able to get it sorted out downstream with the assistance of counsel which will be expensive, stressful and time consuming.

If there is an occurrence involving serious injury, death or significant property damage, all defenses (and comforts) afforded by the careful descriptions of intents placed on this site and this string in particular, won't mean much. Taking money from people to ride your boat with you increases risk of substantial financial loss, even if the insurance company comes around in the end (and they won't help with a Coast Guard problem no matter what). Additionally, don't be surprised if your "crew" says in their deposition that they considered their sailing trip with you a "vacation." The next thing they will say is what they paid you. You can argue all day it was only for their personal maintenance and that it didn't help the boat, that you couldn't have made a cent, etc.; you will probably get hooked as a commercial venture which will cost you far more than $20-$40 per diem your crew kicks to you. In my opinion, it's just too much risk. I sail out of Jacksonville, Florida; it's always a free ride. Jerry

[Lighthouse]

@DancingBear

Great post! That puts this all in a "nutshell".

Welcome aboard - enjoy your stay.