A Primer on Cruise Liability

The ups and downs of taking meetings and incentives to the high seas

The idea of having a meeting aboard ship is so appealing. Attendees can enjoy some sun, yet they’re sure to be around for the meat of the event. Still, there are a number of issues to deal with before leaving port.

Cruises are becoming more popular for awards programs, but planners must keep tax implications in mind.
    Laws restrict your options with a cruise-ship program: With a pure incentive, where no meetings are held, the trip is totally deductible for the sponsor, but the fair market value of the trip is taxable for the award winner.

If the ship will also serve as a meeting venue, the tax laws are more restrictive. To qualify for deductibility, the ship must be of U.S. registry, and it only can call on U.S. ports, possessions and territories. The tax deduction is limited to $2,500 per person. If individuals, not the host organization, are claiming the deduction, they must get a letter from the sponsor stating they attended work-related sessions.
    One fun use of the cruise is as a luxury transportation medium to an onshore meeting venue. In other words, it’s OK to sail to Bermuda, have the meeting on land, and sail home again. Attendees who pay all the costs themselves are allowed a tax deduction limited to twice the executive federal per diem per person for each day on the ship.

Most cruise ships have massive disclaimers denying responsibility for various accidents and illness. Many limitations are spelled out in the ticket contract for example, several cruise lines require passengers to sue in Dade County, Fla., only.
    Generally, though, the courts have enforced disclaimers insulating tour operators or meeting sponsors from negligence committed by the cruise line, so the meeting host should include such wording in the registration material. To make sure the disclaimer is enforceable, state that the meeting sponsor does not control, own or otherwise operate the ship.  Also identify the cruise line as an independent contractor.

Planners should be diligent when selecting the ship, doing a background check into its history on sanitation and safety issues.
    The vessel’s record can be checked via the U.S. Coast Guard (cgmix.uscg.mil/psix/psix2), which conducts safety inspections and sanitation reviews. This public information also should be available through the cruise line.
    The ship should have fulfilled U.S. Coast Guard requirements to meet the International Convention for Safety of Life at Sea. These regulations deal with everything from fire protection to watercraft stability. Note, too, the country of the ship’s registry,  and whether it has passed inspection laws there.
    See what provisions are made for onboard medical care. Since the U.S. Coast Guard does not provide any requirements, it is up to the planner to be sure attendees’ medical needs will be met. Will you be at sea long enough to need a doctor onboard?
    Safety is another concern. Check what type of terminal security requirements are in place. Federal regulations now require terminal operators to provide for passenger security, but this might not be the case at ports of call.
    Meet with the director of security about evacuation and other emergency procedures, and be sure to ask about documentation attendees need to bring. Most cruise lines now issue photo-ID cards for passengers to use when disembarking at ports of call and reboarding at the end of the day. A computer check can then show who is on or off the ship.