We were in a somewhat similar situation with a 41 ft sailboat. It had been with an agency and the we pulled it out and handled it ourselves, somewhat. My comments are Colorado specific. We also owned a walk in gift shop in western Colorado which we had set up as a LLC. So we sort of added the sailboat rental to that LLC even though the boat was located in Florida.
The first thing I did with insurance was to go to a local broker and explain what I was looking for in the way of protection. This was after talking to my tax attorney and CPA. The boat added a bit of a problem in that it was financed and the mortgage holder was not willing to switch ownership over to my Colorado LLC. So we had to do some sort of formal lease arrangement between us, my wife and I, and the LLC. I personally kept making the boat's monthly payment after the LLC paid me the lease fee. LOL We were sort of like the OP in that we already had the boat, couldn't sell it and needed to do something with it. To have bought a boat for this convoluted setup would have never been worth it. Florida not having an income tax was helpful as well as my wife and I owning property in Florida, even though our state of residence was Colorado, where we worked. Took out a Florida business license for the boat rental portion.
I found several problems with vendors with our LLC the first few years, due it not have a credit history. On several of the financial transactions, I had to personally cosign the bank loans to say buy store inventory, because the bank had no recourse against the LLC if it went belly up. After four or five years that problem disappeared once we had a good track record.
I am sure setting down with my tax attorney and CPA, spending probably a $1,000, to get their opinions, before setting up the boat rental, saved me ten fold that amount in the long run. Just the paperwork that had to be sent to the state in Colorado, for a LLC, was a major pain in the tush, monthly, quarterly, yearly, separate tax filings, etc.
