Fog Dog wrote:
Thanks for the input. It is providing quite a bit of food for thought.
I understand that this is not necessarily a black and white question. I
have had the unfortunate experience of a total vessel loss once before
and know first hand how hard any insurance company will look to avoid
paying a claim, hence the question. Fortuntately for me that time it
was a material failure and was documented by an investigator. Still
this was an unfortunate experience and not one I wish to relive!

So the problem rests with the company reimbursing my fuel expense. What
about the case where I and a few fellow employees go out for the day
and they contribute fuel money? Is that a boat for hire situation?
Another case is someone we do business with and I go out for an
afternoon for lunch... I expense the lunch and the fuel cost. This is
not intended as a charter... I still set the agenda and go where and
when I specify, not the guest. How can this be construed as a charter?
Another question revolves around me, as a manager, taking my team out
for a day... expense the fuel and I am not covered. If I pay for the
fuel... and we discuss business (hard not to) am I now covered or not.

I'm certainly not an any sort of attorney nor am I an expert in the
subtleties of maritime law, but I'll share my personal and general
understanding.

Until a few years ago, it was actually illegal for a group of friends
out doing some casual fishing to "kick in" and help the boat owner
refuel at the end of the day. That didn't prevent it from being a
common practice, however, and the regulations were eventually relaxed
to permit non-paying passengers to voluntariily contribute toward fuel
costs, ice, bait, or other expenses (beer!) associated with a fishing
trip. If the friends aboard for the fishing trip or other general
boating adventure happen to be your fellow employees, that shouldn't
make any difference. People you work with are routinely going to be
among your "friends".

I think you're fine when you invite a client or prospective client out
for an afternoon on the boat- but a dedicated nitpicking.
trouble-making, ambulance chasing attorney might see it otherwise. Is
there any expectation, stated or implied, that the client will favor
your company with an order or with an increased volume of business in
exchange for the boat ride? If so, then you may be stepping onto a
slippery slope. The fact that you "expense" the lunch and the fuel is
pretty iffy, and could be used to establish a business purpose for the
use of the boat.

As far as inviting your sales crew out on the boat; I have done much
the same in years past but it has always been a strictly social event.
If you use a boat ride as a "spiff" for a certain level of performance
rather than just extending a general invitation to your entire staff
you might be flirting with trouble. Once again, I think you're hanging
out a mile by expensing fuel or any other costs back to your company.
After all, if there is no business purpose for the use of the boat why
in the world would your company be willing to remiburse you for the
expense? In fact, your company accountant needs to establish that there
*is* a business use for the boat in order to pay our expense voucher.
That could be ugly- the plaintiff or the insurance company calling your
own accountant to the stand to establish that you most certainly
considered the boat trip to be business related, as you had turned in a
claim for a business related expense.

I'd ask the CEO for a raise, (based solely on being a wonderful
employee and not in any way related to the ownership of a boat), and
ditch the expense vouchers for fuel. Your wages are just as deductible
as the expenses as far as the company is concerned, and it gets you a
little farther from the hook in case something goes wrong.