When Is a Licensed Captain Required?

The company I work for owns a 95-foot motoryacht that we use for entertaining clients and customers. I have been operating the boat myself during these events, but our insurance agent recently told us that the boat must be operated by a licensed captain. I had always understood that a license is required only if we are operating the yacht as a charter boat. What is the rule regarding the need for a licensed captain aboard a boat?
Coast Guard regulations do not require a licensed captain to be in command of a boat that is used solely for recreational purposes. This is true regardless of the size of the boat — but, like most areas of legal analysis, there are exceptions and ambiguities with this rule.

First, most ports and harbors around the world require all vessels larger than 300 gross tons to have a licensed harbor pilot aboard while the vessel is under way within the port or harbor. Gross tonnage is a complicated measurement, but a 200-foot yacht will probably measure greater than 300 gross tons. Many of the world’s mega-yachts will therefore need a pilot when they enter or transition through a harbor, regardless of whether any paying passengers are aboard.

Most of us are not cruising around on 200-foot boats, so we can look at the more common issues relating to the onboard requirements for recreational vessels.

Generally speaking, a licensed master is required for any boat that is carrying any passengers for hire. This is true even for a “six-pack” charter, where the vessel itself is exempt from Coast Guard inspection and certification requirements because it is carrying six or fewer passengers. The captain, however, must be licensed whenever a vessel is carrying at least one passenger for hire.

When considering the licensed operation of a yacht, we must therefore look for the definition of a “passenger for hire.” Federal law (Title 46 U.S. Code, sec. 2101) defines a passenger for hire as “a passenger for whom consideration is contributed as a condition of carriage on the vessel, whether directly or indirectly flowing to the owner, charterer, operator, agent or any other person having an interest in the vessel.”

The statute further defines “consideration” as “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.”

The definitions in the federal statutes provide some guidance, but they are not exactly the picture of clarity. For example, the voyages described by the reader may in fact require the boat to be operated by a licensed captain, since the company that owns the vessel will expect some sort of indirect economic benefit to flow from the entertainment of their clients and customers aboard the boat. On the other hand, the statute provides that the “consideration” must be a condition of carriage. This may allow the described voyages to proceed without a licensed captain, since the benefits that were expected to flow from these events would probably not have been a “condition” of carriage.

From a practical standpoint, the reader will need to listen to the company’s insurance agent on this question, regardless of whether a captain would technically be required under the law. Marine insurance policies generally allow the underwriters to evaluate the skill and experience of any proposed operator of the boat, as a condition for insuring the boat. The reader described a 95-foot yacht that frequently carries a large number of guests, and in a case like that one, the insurance company would almost surely require a licensed captain.

Many of our readers are interested in the legal issues relating to charter boat operation, and I have addressed some of these questions in prior installments of this column. You may find answers to some of the more general questions in the online archives of The Log. However, I will remind our readers that charter boat operation is subject to a wide range of local, state and federal regulation, and that an experienced maritime attorney should be consulted for advice on a particular issue.

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