Owning a yacht may be a symbol of luxury, freedom and adventure, but it also comes with significant responsibilities and risks. Insurance is key. It is not only a regulatory requirement in many jurisdictions but is essential for safeguarding your investment and giving you peace of mind, so you can enjoy your time on the water.
Purchasing a yacht is a significant financial investment, so potential risks will need to be assessed, monitored and managed. Insurance is something you never want to have to use, but having the correct cover in place will provide security and comfort that your investment is well protected.
The sea is unpredictable, and even the best prepared and most experienced yacht owners can face unexpected challenges. There is not just the damage to your own boat and equipment from storms, collisions, mechanical failures, fire, theft or piracy to consider; you will also need comprehensive protection for crew and guests, and cover for third-party liability for potential damage or injury to other vessels or people, or the costs associated with accidental pollution or the removal of wreckage.
Working with an extensive range of wholesale brokers and insurers in the London insurance market and in the international market allows Sovereign Insurance Services Ltd (SIS) to negotiate and obtain the best cover at the best premium for our clients.
Types of cover we recommend that clients should have in place:
- Hull & Machinery (H&M): protects against physical damage to your yacht, whether caused by collisions, storms or other perils.
- Protection and Indemnity (P&I): offers cover for your liabilities to third parties, and can include environmental damage/pollution cover, as well as wreck removal.
- Crew insurance: this is important to protect your crew in case of accidents and/or illness. This will allow your crew to seek medical attention without delay and get back to work as soon as possible.
It is also important to recognise the other benefits that an effective insurance policy can offer. In the event of a claim, you will receive support from qualified professionals, such as marine engineers and surveyors, in assessing and quantifying damage. They will liaise with the insurer to provide independent guidance on repair and restoration, and to ensure that appropriate compensation can be paid out.
Choosing the right policy
When selecting your policy, it is crucial to work with a specialised and reputable marine insurance broker, who will assist you during the process of risk presentation to the market.
A comprehensive evaluation of your yacht will enable you to make informed decisions about your insurance coverage and will streamline the process. This should include a yacht inspection, safety equipment evaluation, identification of potential risks and a valuation assessment.
SIS can also provide guidance on the following:
- Valuation method: whether based on agreed value or market value, it is essential to reflect the correct amount.
- Deductibles: it is essential to understand the amount that an insurer will expect the policyholder to pay ‘out of pocket’ before the insurance policy starts paying for covered expenses.
- Expertise in maritime regulations and risks.
- Exclusions: it is essential to understand any exclusions or conditions set on your policy, as these will affect your claim process directly.
- Reputation of insurer: it is essential, when claiming against or renewing your policy, to know that your cover is provided by a reputable insurer.
SIS can assist you with all your worldwide yacht insurance requirements, whether is a pleasure craft or used for chartering. Please do not hesitate to contact Abril Ambrosoni. Alternatively, you can visit our offices at 2-4 Ocean Village Promenade, Gibraltar.
