Legal Requirements for Carrying Passengers for Hire: What Do North Carolina Vessel Operators Need to Know?

Coastal North Carolina’s thriving tourism industry creates abundant opportunities for commercial passenger vessel operations. Charter fishing boats departing from Wrightsville Beach, sunset cruises along the Cape Fear River, and sightseeing tours through the Intracoastal Waterway all share one common requirement: strict compliance with federal and state regulations governing vessels that carry passengers for hire. Whether you operate a six-pack charter or a larger inspected vessel, understanding these legal requirements protects both your business and your passengers.

What Does “Carrying Passengers for Hire” Mean Under Maritime Law?

The term “passengers for hire” encompasses any situation where a vessel carries individuals who have paid for the privilege of being aboard. This definition extends beyond obvious commercial operations like dinner cruises and ferry services. Charter fishing operations, even those that provide the experience rather than guarantee a catch, fall within this category. Similarly, vessels offering sunset tours, dolphin watching excursions, or historical harbor tours all qualify as passenger-carrying operations.

The U.S. Coast Guard draws an important distinction between vessels carrying six or fewer passengers and those carrying seven or more. This threshold determines which regulatory framework applies to your operation. Vessels certified to carry six or fewer passengers operate under less stringent requirements than larger inspected vessels, but both categories face substantial federal oversight and potential liability.

Payment need not be direct to trigger passenger-for-hire status. Courts have found that vessels carrying individuals as part of a package deal, promotional event, or other indirect compensation arrangement may still be considered passenger vessels. This broad interpretation means that vessel owners must carefully evaluate their operations to determine whether they fall under Coast Guard jurisdiction.

What Coast Guard Requirements Apply to Six-Passenger Charter Operations?

Operators of uninspected passenger vessels carrying six or fewer passengers must hold a valid Coast Guard captain’s license appropriate to the vessel’s tonnage and operating area. The most common credential for these operations is the Operator of Uninspected Passenger Vessels (OUPV) license, often called a “six-pack license.” This credential requires completion of approved training courses, passing written examinations, meeting sea time requirements, and passing a physical examination including drug testing.

The vessel itself must carry specific safety equipment mandated by Coast Guard regulations. Required items include life jackets for every person aboard, throwable flotation devices, fire extinguishers, visual distress signals, sound-producing devices, and navigation lights appropriate to the vessel’s operation. The Coast Guard may board any vessel at any time to inspect for compliance with these requirements, and deficiencies can result in citations, fines, or vessel detention.

Documentation requirements also apply to six-passenger operations. Vessel owners must maintain proper registration or Coast Guard documentation, and operators must carry proof of required credentials while underway. Insurance coverage, while not federally mandated for smaller operations, provides essential protection against the substantial liability exposure inherent in carrying passengers.

How Do Requirements Change for Vessels Carrying Seven or More Passengers?

Vessels certified to carry seven or more passengers enter the realm of inspected passenger vessels, triggering significantly more comprehensive regulatory oversight. These vessels must obtain and maintain a Coast Guard Certificate of Inspection (COI), which specifies the maximum number of passengers permitted, the geographic area of operation, and the specific equipment and safety requirements applicable to the vessel.

The COI inspection process examines every aspect of vessel construction, equipment, and operation. Coast Guard marine inspectors verify hull integrity, machinery condition, electrical systems, firefighting equipment, lifesaving appliances, and navigation equipment. Annual reinspections ensure continued compliance, and the vessel must be available for periodic drydock examinations to inspect underwater components.

Crew licensing requirements become more stringent for inspected vessels. The captain must hold a Master’s license appropriate to the vessel’s tonnage and route, and additional crew members may require specific credentials depending on the vessel’s size and passenger capacity. Crew training in passenger safety, emergency procedures, and vessel-specific operations becomes mandatory, with documented drills required at regular intervals.

Operational restrictions specified in the COI must be strictly observed. These may limit the vessel to specific geographic areas, restrict operation to daylight hours, require particular weather conditions, or mandate specific safety equipment for certain routes. Violations of COI conditions can result in civil penalties, criminal prosecution, and revocation of the vessel’s operating authority.

What Liability Issues Do Passenger Vessel Operators Face?

Passenger vessel operators face substantial potential liability when injuries occur aboard their vessels. Maritime law provides injured passengers with legal remedies that may be more favorable than those available in typical personal injury cases. Vessel owners owe passengers a duty to provide a seaworthy vessel, properly trained crew, and reasonable care in vessel operation.

The concept of seaworthiness extends beyond the physical condition of the vessel itself. Courts have found vessels unseaworthy due to incompetent crew, improper procedures, inadequate safety equipment, or failure to warn passengers of known hazards. A finding of unseaworthiness can expose vessel owners to liability even when they personally exercised reasonable care.

Limitation of Liability proceedings under the Limitation Act allow vessel owners to limit their financial exposure in certain circumstances, but this protection is not automatic. Owners must file limitation proceedings in federal court promptly after an incident and must demonstrate that they had no knowledge of the condition that caused the injury. These proceedings involve complex admiralty law principles and strict procedural requirements.

Contractual liability waivers signed by passengers provide some protection but are not absolute defenses. Courts scrutinize these waivers carefully and may refuse to enforce them if the language is ambiguous, the waiver was not conspicuous, or the vessel owner’s conduct constituted gross negligence or willful misconduct. Relying solely on liability waivers without maintaining proper insurance coverage and safety protocols creates substantial financial risk.

Why Work with Rountree Losee for Your Passenger Vessel Legal Needs?

For more than 125 years, Rountree Losee, LLP has provided counsel to maritime stakeholders throughout coastal North Carolina. Our attorneys represent vessel owners, charter operators, and other maritime interests in regulatory compliance matters, licensing issues, Coast Guard proceedings, and maritime injury litigation. We handle a wide variety of admiralty matters, from initial business formation and vessel documentation to complex litigation involving passenger injuries and Coast Guard enforcement actions.

Located in Wilmington, we understand the practical realities of operating passenger vessels in North Carolina’s coastal waters. Our approach emphasizes building long-term relationships with clients, providing timely counsel that recognizes both legal requirements and the economic demands of seasonal tourism operations. We work efficiently to resolve regulatory issues while protecting your business and your ability to continue serving the public.

Whether you are starting a new charter operation, expanding to a larger inspected vessel, facing a Coast Guard enforcement action, or defending against a passenger injury claim, Rountree Losee, LLP provides the experienced maritime counsel your operation needs. Contact us today to discuss how we can help you navigate the complex regulatory environment governing passenger vessels in North Carolina’s waters.