How to Master ACORD 36 Hull and Liability Sections in Your Agency

The ACORD 36 hull and liability sections control two outcomes: what the carrier pays when a vessel is damaged, and what the carrier pays when the insured causes harm to others. Getting these sections wrong costs real money. An incorrect hull valuation basis (agreed value vs. ACV) can mean a $60,000 to $100,000 difference on a total loss claim for a mid-size vessel. Inadequate P&I limits leave the insured personally exposed for injuries on their vessel.

This checklist breaks down every field in the acord 36 hull and liability sections with specific completion guidance, common errors, and the underwriting impact of each choice.

Key Takeaways

• Hull coverage and liability coverage are separate sections on the ACORD 36 with different limits, deductibles, and rating factors; errors in one section do not automatically carry to the other
• Agreed value hull coverage pays the stated amount at total loss with no depreciation; ACV depreciates the vessel at claim time, and the gap averages 30 to 50% on vessels older than 10 years (BoatUS 2024 claims analysis)
• P&I (Protection and Indemnity) is the marine liability section; standard limits range from $300,000 to $1,000,000, and most marinas require a $300,000 minimum
• Deductible selection on hull coverage directly affects premium: moving from $500 to $2,500 deductible saves 15 to 25% on hull premium at most carriers
• Every field in the hull and liability sections appears on the declaration page and drives claim settlements; a discrepancy between the application and the declarations creates coverage disputes
• Completing both sections accurately on the first submission prevents 60% of underwriter return requests, per BrokerageAudit 2026 marine submission analysis

Hull Coverage Section Checklist

Work through these fields in sequence. Each builds on the prior field's data.

Hull Valuation Basis

Agreed value pays the amount stated on the policy at total loss, with no depreciation argument. The insured and carrier agree on the vessel's value at inception, document it with a survey or NADA guide, and lock that number.

Actual cash value (ACV) pays the depreciated market value at the time of loss. Carriers determine ACV using post-loss surveys, comparable vessel sales, and NADA marine guides. The settlement can be significantly lower than the insured value on older vessels.

Checklist item: Select agreed value for any vessel over $50,000. The premium increase (10 to 15%) is far less than the potential settlement reduction under ACV. BoatUS 2024 claims data shows ACV settlements on vessels over 10 years old average 35% below the prior agreed value equivalent.

Hull Value Amount

Enter the full current market or replacement value. For agreed value policies, this number becomes the claim settlement for a total loss. Do not inflate to get more coverage; over-insurance creates a moral hazard issue that underwriters flag during review.

Checklist item: Attach supporting documentation matched to vessel value tier:

Hull Deductible

Standard hull deductibles range from $250 to $10,000. The deductible is the amount the insured pays on each hull claim before the carrier's coverage responds.

Checklist item: Match the deductible to the insured's financial situation and vessel value. A $2,500 deductible on a $150,000 vessel saves 15 to 25% on hull premium compared to a $500 deductible. For high-net-worth clients with multiple vessels, $5,000 to $10,000 deductibles reduce premium while keeping the insured's out-of-pocket at a manageable level relative to their assets.

Document the deductible conversation with the insured. E&O claims frequently arise from insureds who did not understand their deductible and expected full hull coverage after a partial loss.

Salvage and Sue and Labor Provisions

Most marine hull forms include "sue and labor" coverage, which reimburses the insured for reasonable efforts to prevent or minimize further damage after a loss. This is separate from the hull limit.

Checklist item: Confirm the carrier's form includes sue and labor provisions. A vessel that grounds and is pulled off by a salvor at a cost of $15,000 needs this coverage to avoid a dispute over whether salvage expenses apply against the hull limit or are covered separately. If the form does not include sue and labor, request it as an endorsement.

Named Perils vs. All-Risk Hull

All-risk hull coverage covers every cause of loss except specific named exclusions (wear and tear, gradual deterioration, intentional acts). Named perils coverage covers only the specific causes listed in the policy (fire, theft, collision, windstorm, sinking).

Checklist item: Request all-risk hull coverage for any vessel in active use. Named perils policies exclude common losses like submersion due to mechanical failure, accidental damage at the dock, and damage from loading or unloading. The premium difference between named perils and all-risk is typically 15 to 20%. For vessels over $50,000, all-risk is the appropriate recommendation.

Liability (P&I) Section Checklist

Protection and Indemnity (P&I) is the marine equivalent of commercial general liability. It covers the insured's legal liability for bodily injury to third parties and property damage to other vessels or docks arising from vessel ownership and operation.

P&I Limit Selection

Standard limits available: $300,000, $500,000, or $1,000,000 combined single limit. Some carriers offer $2,000,000 and $5,000,000 for yacht and large-vessel accounts.

Checklist item: Recommend $500,000 minimum for vessels under 30 feet carrying up to four passengers. Recommend $1,000,000 for vessels over 30 feet or vessels that regularly carry more than four passengers. The premium difference between $300,000 and $1,000,000 P&I is typically $100 to $300 annually. Given that a serious boating injury can exceed $1,000,000 in medical and legal costs, the limit increase is almost always worth the additional premium.

Medical Payments

Medical payments cover medical expenses for passengers injured on the vessel, regardless of fault. The coverage responds immediately without requiring a liability determination.

Checklist item: Select $10,000 minimum for personal pleasure vessels. Select $25,000 for vessels used for entertaining (regularly six or more guests). Medical payments are among the most frequently used marine coverages; a passenger who slips on a wet deck generates an immediate medical expense claim. The additional premium for $25,000 versus $5,000 is typically $30 to $75 annually.

Uninsured Boater

Covers the insured if struck by an uninsured or underinsured vessel operator. The coverage functions like uninsured motorist on auto policies: it pays the insured's bodily injury damages when the at-fault party has no insurance or insufficient limits.

Checklist item: Match uninsured boater limits to the P&I limit selected. The cost is minimal ($25 to $75 annually). Boater liability coverage rates in the U.S. are substantially lower than auto insurance rates, meaning a higher percentage of vessel operators are uninsured. On inland lakes and smaller waterways, encountering an uninsured operator is common.

Excess Liability Coordination

For high-value vessel owners, standard P&I at $1,000,000 may not provide adequate protection. A serious boating accident involving multiple injured parties, a passenger death, or significant dock damage can generate claims exceeding $2,000,000.

Checklist item: For clients with vessels over $200,000 or net worth above $1,000,000, discuss an excess liability umbrella that sits over the marine P&I. Most personal umbrella carriers schedule watercraft P&I as underlying coverage. Coordinate the P&I limit with the umbrella's required underlying limit to avoid a gap. The typical minimum underlying P&I required by umbrella carriers is $300,000; confirm with the umbrella carrier before reducing P&I below this threshold.

Wreck Removal

Covers the cost to remove a sunken or stranded vessel. Many states require vessel owners to remove wrecks from navigable waterways within 30 to 90 days. Wreck removal costs range from $10,000 for a small powerboat to $500,000 or more for a large yacht, depending on depth, location, and environmental remediation requirements.

Checklist item: Verify the policy includes wreck removal coverage with a limit at least equal to 50% of the hull value. Some carriers include wreck removal within the hull limit (reducing available hull coverage for the physical damage claim). Others provide wreck removal as a separate sub-limit. Confirm the structure with the carrier before binding and document it in the file.

Pollution Liability

Fuel and oil released from a damaged or sunken vessel create pollution liability exposure. The Federal Water Pollution Control Act holds vessel owners responsible for cleanup costs. A 40-foot vessel with 100 gallons of diesel fuel can generate $50,000 to $200,000 in pollution cleanup costs if it sinks in sensitive waters.

Checklist item: Confirm whether the carrier's P&I form includes pollution liability or excludes it. Many standard marine policies exclude pollution. If excluded, discuss a separate marine pollution liability endorsement or policy. This is particularly important for vessels with large fuel capacity (over 50 gallons) or those that operate in environmentally sensitive areas.

How Hull and Liability Sections Interact in a Total Loss Claim

When a vessel is a total loss, both the hull and liability sections may respond simultaneously. Understanding how they interact prevents coverage disputes.

In a total loss from a collision with another vessel where the insured is at fault, the hull section pays for the total loss of the insured's vessel. The P&I section pays for damage to the other vessel and for any bodily injury claims from passengers or the other vessel's occupants.

If the total loss involves a sinking that causes pollution, the hull section covers the vessel, the wreck removal provision covers the removal cost, and the pollution section (if included) covers cleanup. An insured without separate pollution coverage faces out-of-pocket cleanup costs that can exceed the hull value.

When both hull and P&I claims arise from a single incident, the deductible applies only to the hull section. P&I claims do not typically carry a deductible. Clarify this structure with the insured at the time of policy issuance.

Cross-Referencing Hull and Liability with the Declaration Page

After the carrier issues the policy, the declaration page should mirror every field from the ACORD 36 hull and liability sections. Review these items within 48 hours of receiving the declarations:

• Hull value and valuation basis (agreed value or ACV) match the application
• Deductible amount matches the requested deductible
• P&I limit matches the limit requested on the form
• Medical payments per-person limit is correct
• Navigation limits from the application appear on the declarations
• Named insured matches the applicant name exactly
• Lay-up period, if applicable, is accurately reflected

Discrepancies between the application and the declarations create claim disputes. Carriers who discover a discrepancy at claim time may seek to apply the policy terms as written rather than as intended. Errors caught before a claim occurs are corrected by endorsement with no coverage impact.

Certificate of Insurance Implications

The hull and liability limits selected on the ACORD 36 appear on every certificate of insurance issued for the vessel. Marinas, lenders, and yacht clubs require specific minimums that must be met by the underlying policy.

Common marina requirements: hull coverage equal to vessel value, P&I minimum of $300,000, and the marina listed as additional insured and loss payee on the hull section.

Checklist item: Collect certificate holder requirements before completing the ACORD 36 hull and liability sections. If the marina requires $500,000 P&I and you select $300,000, you will need a mid-term endorsement that costs the insured additional premium and adds processing time. Building the certificate requirements into the initial application prevents this scenario.

Lenders who finance vessel purchases typically require hull coverage equal to the loan balance, with the lender listed as loss payee. Confirm the lender's requirements as part of the initial client intake.

Common Errors in Hull and Liability Sections

FAQ

What is the difference between agreed value and ACV on the ACORD 36 hull section?

Agreed value pays the hull amount stated on the policy at total loss with no depreciation. ACV pays the depreciated market value at the time of loss, which averages 30 to 50% below the original agreed value equivalent on vessels older than 10 years (BoatUS 2024 data). Agreed value premiums run 10 to 15% higher. For vessels over $50,000, agreed value is the appropriate recommendation.

What P&I limits should I recommend on the ACORD 36 liability section?

Recommend $500,000 minimum for vessels under 30 feet carrying up to four passengers. Recommend $1,000,000 for vessels over 30 feet or those regularly carrying more than four passengers. The premium difference between $300,000 and $1,000,000 is typically $100 to $300 annually. A serious boating injury can exceed $1,000,000 in medical and legal costs, making the higher limit worth the additional premium.

How do wreck removal provisions work on marine hull policies?

Wreck removal covers the cost to remove a sunken or damaged vessel from navigable waters. Costs range from $10,000 for a small boat to $500,000 or more for a large yacht. Some carriers include wreck removal within the hull limit (reducing available hull coverage). Others provide it as a separate sub-limit. Verify the structure with the carrier and confirm the limit is at least 50% of the hull value.

How do the hull and liability sections interact in a total loss claim?

In a collision total loss where the insured is at fault, the hull section pays for the insured's vessel and the P&I section pays for damage to the other vessel and any bodily injury claims. A sinking with pollution involves the hull section for vessel loss, the wreck removal provision for vessel removal, and the pollution provision (if included) for cleanup. The hull deductible applies to the hull claim only; P&I claims typically have no deductible.

What should I check on the declaration page after the ACORD 36 is processed?

Within 48 hours of receiving the policy declarations, verify that hull value, valuation basis, deductible, P&I limit, medical payments limit, navigation limits, named insured, and lay-up period (if applicable) all match the ACORD 36 exactly. Discrepancies caught before a claim are corrected by endorsement with no coverage impact. Discrepancies discovered at claim time create disputes that are harder to resolve in the insured's favor.

What excess liability options should I discuss with marine clients?

For clients with vessels over $200,000 or net worth above $1,000,000, discuss an umbrella or excess liability policy that sits over the marine P&I. Most personal umbrella carriers schedule watercraft P&I as underlying coverage. Coordinate the P&I limit with the umbrella's required underlying minimum (typically $300,000) to avoid a gap between the marine P&I and the umbrella attachment point.

Complete ACORD 36 hull and liability sections accurately with BrokerageAudit's ACORD Form Library

Written by Javier Sanz, Founder of BrokerageAudit. Last updated April 2026.