How should I contract Yacht Insurance
21 October 2015
Yacht insurance is meant to help you overcome the hard financial times as well as those situations in which your patrimony, invested in the vessel, is endangered. Insurers naturally cover the consequences of accident, fire, storm or theft.
Various contracts exist to organize how your boat is insured, through the terms that describe the main principles of guarantee and the specific conditions of the boat and its owner.
Although Allied Yachting is not a licensed boat insurance broker, we have developed through the years in our YACHT MANAGEMENT program, many contacts and partnerships with the leading international marine insurance companies and we can refer you to the most appropriate insurer for your boat, while comparing and helping you negotiate the best rates available.
Our partners will offer you contracts tailored to boating, to your yacht, its navigation area and its use (private or charter) at the most competitive rates. In addition, they will be always available and at your disposal to manage any eventual claims.
In every case, remember to also insure your tenders and watertoys (i.e. jet-skis, scooters, sea-bobs, diving and snorkelling equipment, water-ski equipment etc…), this is of relevant importance, especially when you’re running a charter yacht.
Pleasure craft insurance guarantees
THIRD PARTY LIABILITY
Although not mandatory at sea, the third party liability guarantee is the first reason why it is prudent to insure.
The insurer thus refers to cases in which the boat has caused damage to a third party, hence the common term of ‘third party insurance’.
The wrong manoeuvres, the navigational error, are examples of events generating this damage.
The damage might material (collision, scratch, bump), corporal (to a crew member after an unfortunate tack for example) or intangible (loss of rental income for a boat you would have damaged and immobilized as a result of the incident).
The third party liability (TPL) is always accompanied by a defence and remedies guarantee, true sentinel of civil liability; this guarantee is the legal assistance in case you need a lawyer to defend your case at court.
DAMAGE TO THE BOAT
This is the guarantee that is put into effect more often and also the one that is most expensive for insurers.
Most insurers will list the events that cause damage, fire, explosion, impact against a fixed or floating artefact…
The principle is to cover damage to the yacht as a result of an accident, ie following the occurrence of an unforeseeable event, unavoidable and exterior to the boat.
Insurers will not cover ‘minor damages’ that the owner can take in charge, which is why this type of contract includes, mostly, a reduced deductible franchise after a claim-free period.
Just as towing, destruction, bailout, removal and salvage.
You may have to settle recovery costs, bailout, rescue, towing or assistance to the boat.
The guarantee of these costs must always be included in the contract and those expenses covered without deductible, they are part of the loss and can sometimes be important.
Some rescuers believe they can, under any legal assistance costs, ask for astronomical sums to the owner of the boat and especially his insurer, during an intervention at sea. Their involvement is regulated; one must be very careful in case of intervention at sea, never agree to be towed without having previously negotiated the conditions.
INDIVIDUAL MARINE GUARANTEE
This guarantee is a personal insurance on passengers. It is in no way mandatory and rarely implemented in yachting, where accidents are rarely generators injuries.
LEGAL ASSISTANCE PROTECTION
As a shipowner, you can face conflicts with other boat owners, repairers, port authorities or the supplier of equipment. This protection allows you to bring in this guarantee.
ASSISTANCE TO PERSONS
This is an additional guarantee of repatriation for the crew. It can in no way substitute the guarantees of the main contract or waive the rules of maritime rescue at sea.
Guarantees for professional crews
MEDICAL EXPENSES COVERAGE FOR PROFESSIONAL CREWS
Crews embarked on foreign vessels have no access to the social security benefits of French sailors. That is why our partners can propose offer tailored coverage to specific international crews and their situation on board and according to the changing Maritime Labour Convention (MLC) regulations.
PAYMENT OF SALARY COMPENSATION
The payment of daily allowances can partially compensate for lost wages that a work stoppage represents to your crew.
CONTRACT OF PROTECTION AND INDEMNITY / P & I
The protection and indemnity contract comes from the Merchant Navy. It includes extensive coverage of the liability of the shipowner. It is not necessarily provided by an insurance company but can also be covered by a P & I Club. Its coverage extends to passengers, the crew or the vessel’s TPL. Please note that the guarantee is subject to the involvement of liability of the shipowner. The P & I is mainly applicable for vessels for commercial and rental use (charter).
Cost of boat insurance
Depending on the type of policy contracted and the area of navigation, yacht insurance will generally cost you from 0.7% up to 0.8% (if you decide to include P & I) yearly, of the boat’s value.
The insurance company may ask a certified marine surveyor to appraise the boat to determine its value.