Liability Insurance for your Yacht - Why is it important?
By Keith Lovatt of MS Amlin, writing on behalf of Bruce Stevenson for Yachting Life Magazine
Bruce Stevenson, Scotland’s largest independent insurance broker specialises in niche areas of private and commercial insurance and for some time has been offering its expertise and knowledge to clients wishing to insure their boats and yachts both in the UK and abroad.
Whether it’s a small motorboat, racing yacht or super yacht, we want you to experience maximum enjoyment from your craft. We are working closely with MS Amlin one of the Lloyd’s Insurance markets leading marine syndicates, recognised as yacht specialists.
We asked their Senior Underwriter for Speciality Yacht; Keith Lovett to provide some insights. Keith a keen yachtsman has been working in the yacht insurance market for over thirty years. A multiple boat owner over that period, he sold his last boat a Match 35 ‘Firestarter’ to new owners in Port Edgar to join the growing fleet of cruiser racers there.
Keith points out that whilst we predictably, think of damage to our own boats when considering insurance, it is often the liabilities to others which generate the larger claims. Liabilities rest with any yacht following negligence. Those third parties could be other boats, the marina where you are moored, and any number of individuals including those on board.
Whilst in coastal waters there is no statutory requirement to hold what is termed ‘third party liability insurance’, the vast majority of marinas, port and harbour authorities however require that such insurance is in place, often by local bylaw.
If you imagine the scenario where a port and starboard incident takes place whilst racing , likely breaking rule 10 and 14. You lose the protest that follows or at arbitration you choose to retire. Whilst under the Racing Rules of Sailing are not legally binding, the majority of case law is seen to uphold protest committees decisions and the protest itself is an agreement by all parties racing to resolve their disputes. Whatever the outcome the losing the protest would undoubtedly put the other boat (or more likely their Insurers) in a much stronger position if they choose to pursue you.
If we assume the damage to your own boat is minimal, but the other boat (third party) has suffered badly, perhaps someone on the other boat has sustained a serious injury, what happens then.
The normal course of action would be for the third party yacht to make a claim against their own insurance policy. Their insurers will hopefully deal with the loss, but will not pay any excess or other deductions dictated by their policy. The Insurers would then certainly look to pursue you, via your own insurers under what are termed subrogation rights. In pursuing the claim those Insurers would look to recover uninsured losses such as the excess at the same time. So what about the injured person, they may have had to take time off work, may have medical bills to pay and have other losses.
The third party yachts insurance may well not extend to cover such costs and if so limits may be minimal. A separate claim could therefore be made against you. The costs can be eye watering, if you imagine if several people suffered injuries the numbers just escalate.
The need for liability insurance at least should therefore not be taken lightly, a good broker advising you along the way and a specialist yacht insurer on your side should not be compromised.
Each and every one of our clients has a different set of insurance requirements. We recognise that these needs are often complex, so we take the time to get to know your specific circumstances and how best we can help you protect your assets.
Should you have any queries or require further information about boat insurance please contact our Private Clients Development Executive, Alexandra Richards on 07464 545648 or [email protected]
Yachting Life Magazine: http://www.yachtinglife.co.uk/