If you own a boat that you often use for social gatherings, you're probably already aware that your watercraft coverage includes liability coverage for on-board accidents. However, the liability rates for watercraft (particularly those frequently used for parties) can be steep. How can you reduce your insurance premiums while still making sure you're adequately covered in the event of an accident or other claim? Read on to learn more about watercraft insurance, as well as what you should do to maximize your coverage for a low cost.

Implement a responsible drinking policy

One of the best and easiest ways to keep insurance rates down is to avoid having claims. Although certainly not all accidents are avoidable, by implementing a responsible drinking policy for guests, you can ensure that the odds that one of your guests will become injured (or cause injury to another) is much lower than if your guests tend to freely imbibe. All watercraft operators should avoid drinking at all while aboard -- a citation or arrest for operating a watercraft while intoxicated will cause your boat insurance rates to spike, and may even result in the cancellation of your policy.

Ensure that your guests' actions are covered

All states have mandatory minimum coverage limits for boats and other watercraft (such as jet skis). This coverage ensures that someone who is injured as a result of a collision with your vehicle is adequately compensated for any damage. However, this minimum coverage may not be enough if you frequently entertain on your boat -- the more your watercraft is out on the water, the more opportunity for an accident to take place.

When reviewing your policy, ensure that it provides coverage for any negligent actions committed by your guests. You might also look into raising the total payout limits of your policy, or purchasing an umbrella policy to supplement your watercraft insurance, to avoid being personally sued in the event of a crash or other accident.

Limit the number of operators

If you or a spouse are the only ones who plan to operate the watercraft, check to see if you can find coverage that will exclude any additional operators. If your insurance company knows that the only two possible operators are known entities with clean driving records, your insurance rates will be lowered accordingly. (Be careful in choosing this option if there is any chance at all that you or your spouse could need another operator to step in during an emergency.)