How to Rent your Boat
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Introduction
Disclaimer: This article is for informational purposes only and does not constitute legal or regulatory advice. Boating laws vary by location—consult the U.S. Coast Guard, local authorities, or a maritime attorney for compliance. We assume no liability for actions taken based on this information.
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Renting out a boat can be a great way to offset ownership costs or even turn a solid profit, but it’s not a one-size-fits-all business. Some owners choose to rent their boat just enough to cover expenses like dock fees, maintenance, and insurance, while others build full-fledged rental operations for steady income. The path you take depends on factors like location, boat type, demand, and how hands-on you want to be. While boat rentals can be lucrative, they also come with legal requirements, insurance considerations, and operational challenges that new owners often overlook. Whether you're looking to make boating more affordable for yourself or build a profitable side business, there are key things to know before getting started. Read on to see if renting out a boat right for you.
Understanding Charter Regulations
It’s essential to understand the different types of charters and their regulations, to determine what may be right for you.
6-pack charter
This allows you to carry up to six passengers (excluding crew) under a Captain's OUPV (Operator of Uninspected Passenger Vessel) license. These boats do NOT require Coast Guard inspection, making them easier to operate, but limiting passenger capacity.
Note: The owner of the boat CAN be the captain. For information on becoming a captain, reach out through the Contact Us page.
Small Passenger Vessel (SPV) charter
In a bareboat charter, the charterer takes full responsibility for the vessel, acting as the de facto owner during the rental period. Unlike a 6-pack charter, where the captain operates under their own license, a bareboat charter cannot come with a captain or crew provided by the owner—the charterer must independently hire them, or operate the boat themselves if qualified. This shifts liability away from the boat owner.
Legally, a bareboat charter can carry up to 12 passengers, not including the captain, crew, or the charterer themselves. This means a charterer can bring 12 guests onboard, in addition to any hired crew. However, the vessel must not be operated as a passenger-for-hire service; the charterer must have full control, covering expenses like fuel. These charters allow for more flexibility and passenger count, while still complying with Coast Guard regulations.
Note: the owner of the boat CANNOT be the captain, or be onboard during the charter
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Inspected Vessel charter
An Inspected Vessel Charter is for boats carrying more than six passengers and must be U.S. Coast Guard-inspected for safety compliance. These boats must have fire suppression systems, emergency equipment, life rafts, and regular safety drills to meet Coast Guard standards. The U.S. Coast Guard issues a COI (Certificate of Inspection), which outlines the maximum passenger capacity, crew requirements, and operational guidelines.
Choosing the right boat
Choosing the right boat is dependent first on knowing what type of charter you wish to operate. Read above if you aren't sure.
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For the purpose of the article, I will focus on 6 pack charters and Small Passenger Vessel (SPV) charters (bareboat charters). The main components to keep in mind are the capacity of the boat, the layout, the type of propulsion, the type of water you will be operating on, and the number of engines. If you want to operate only 6 pack charters due to simplicity and lower costs, you only need to seat 6 passengers. If you operate bareboat charters, you will likely need to seat more people, so you'll want something bigger with more outdoor seating space.
Below are the styles of boats that are popular for charters and why.
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Bowriders - This style maximizes seating by sacrificing a cabin, allowing for more passengers on a smaller boat. The compromise is they cannot handle as choppy of water, and you lose out on the cabin.
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Pontoons or Deck Boats - This style also maximizes outdoor seating and are traditionally more simple to operate, however these need to be operated in calm waters.
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Center Consoles - These are great for fishing and coastal cruising, and they handle rougher waters well. However, you traditionally won't get as many seats with this design unless you are going for a larger model.
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Cuddy Cabin - These are a great balance of handling for rougher or more unpredictable waters, seating, and luxury. However, you may need to get a larger boat to fit the same capacity of a bowrider.
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There are 3 traditional types of propulsion. Inboards, sterndrives, or outboards.
Inboards are in my opinion the best for charters if guests may be swimming, as the propellers are hidden to avoid any risk of injury due to kicking a propeller as they are more recessed under the boat. The propellers do not move with the wheel.
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Outboards are the more modern choice on many models, as they are easier to work on, and there are less components in the water to wear and need maintenance. If you plan to have guests in the water they can be in the way.
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Sterndrives are very common, especially with Cuddy Cabin or Bowriders. With this style, the propeller is typically under the swim platform, and the propellers move with the steering wheel. The problem is the propellers can be a hazard to swimmers to kick as they get on and off the boat, unless your swim platform can adequately cover them. They are prone to more maintenance as there are more moving parts in the water to be serviced.
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It is best to get a boat with two engines if you can, so if you have an issue with one engine, you can use the other to navigate back to your harbor for maintenance. These also typically handle better and have more power. ​
Legal & Insurance requirements
Insurance can be very complicated and difficult to source for charter operations. You cannot use your typical boaters insurance and think you're good to go. Depending on where you are operating, you would typically need at least 1M of liability coverage, and would want to at least have with proper limits:
Physical Damage
Liability Coverage
Medical Payments
Personal Effects
Uninsured Boater
Limited Pollution
Towing
Reach out through Contact Us for more specifics. or to get connected with an insurance carrier/broker. You can expect to pay around 10% of your boats value in insurance premiums per year. Another more simple option is to leverage the Boatsetter platform, and for a percent fee of your booking, Boatsetter will provide insurance on your charter, however be sure to read the terms, as last I checked they do not cover guests swimming.
From a legal standpoint, you will need to have a Charter Agreement outlining the specific terms that your charterer is agreeing to. There are existing templates that can be used as a starting point, but the best practice would be to work with a maritime lawyer who can help create a charter agreement for you, incorporating the terms of your insurance policy. You also need a waiver, signed by all passengers on your vessel. Same as above, these may be specific to your insurance carrier, and it's best to consult a maritime lawyer to ensure you are covering your risk and liabilities, including types of business entities to possess the boat and limit your liability. Reach out through Contact Us for additional help or information specific to your needs, or to be connected with a reputable marine lawyer.
Governing bodies and permits
Operating a charter boat business requires compliance with multiple governing bodies and permits at the federal, state, and local levels.
The U.S. Coast Guard (USCG) is the primary federal authority, regulating vessel safety, captain licensing (such as the OUPV or Master Captain’s License), and passenger capacity limits. Depending on your state, the Department of Natural Resources (DNR) oversees boat registration, state boating laws, and environmental compliance. Additionally, the harbor or marina where you operate may require a commercial permit or docking agreement, ensuring you have proper liability coverage and adhere to local operational guidelines. On the business side, most municipalities require a business license to legally operate and collect taxes. Depending on your location, you may also need a charter permit or passenger transport license to comply with local maritime laws. Ensuring you meet all regulatory requirements is crucial to avoiding fines and maintaining a smooth charter operation. Reach out for more information through our Contact Us page.
Safety
Boating safety is a top priority for any charter operation, and compliance with U.S. Coast Guard (USCG) regulations is essential to ensure passenger and crew safety. Every charter vessel must have properly fitting U.S. Coast Guard-approved life jackets (PFDs) for all passengers, with additional throwable flotation devices if required. Fire safety is also critical, requiring Coast Guard-approved fire extinguishers on board, especially near fuel sources. An air horn or whistle must be available for sound signaling, along with visual distress signals like flares or an orange flag in case of emergencies. A fully stocked first aid kit is mandatory to handle minor injuries, and vessels should have a marine VHF radio to communicate with emergency services if needed. Regular Coast Guard Auxiliary safety checks can help ensure compliance with federal regulations and confirm that essential equipment, including navigation lights, bilge pumps, and emergency shut-off switches, are functioning properly. Maintaining up-to-date safety training for crew members, including emergency drills, is also a best practice for charter operators. Prioritizing safety not only protects passengers but also helps ensure the long-term success and reputation of your charter business.
Conclusion
Hopefully this article has helped clear up some of the major components and need to know information of operating a charter boat business. If you have additional questions or want to learn more, reach out at Contact Us.