Purchasing insurance policies and coverage for your superyacht, such as hull and protection and indemnity insurance, isn't just a necessary expense, it is one that should be given considerable attention. One common misconception is that the insurance policy is a simple, all-encompassing document that can be purchased and forgotten until it's needed. On the contrary, insuring your yacht is a multi-faceted consideration, and the insurance policy is a contract that begins an active, ongoing relationship with your insurance provider.
Particularly since 2008, many insurance policies have been purchased based on price alone, oftentimes at the advice of someone who does not have expertise in the specialised world of superyacht insurance.
Nancy Poppe, North American yacht practice leader for Willis Marine, cautions owners against working with an insurance broker who is not a specialist in the field. 'It takes different knowledge, experience and contacts to properly service an oceangoing superyacht, and a general personal or business insurance broker is not best positioned to do so,' she says.
'The policy is in essence a multimillion-dollar contract and should be treated as such,' says Danielle Massé, director of Global Business Development for the Pantaenius Group. While aligning yourself with an expert in the field is recommended, Massé advises that owners be diligent themselves. 'Some advisors may have preferences or be influenced in other ways, such as through a longstanding relationship or the promise of a certain level of commission. The best bet is to talk with other owners and make sure you have someone you trust read the contract.'
The policy is in essence a multimillion-dollar contract and should be treated as such'
If your boat sinks in very deep water and you have a 'Named Perils' policy, you must prove which of the named perils caused the boat to sink'
Exercising 'due diligence' will help in alleviating claims exclusions and avoid that grey area that may end with a claim being decided by a court'
Generally, underwriters do not want the length of the towed vessel to exceed 20 percent of the towing vessel. When quoting a yacht insurance policy, underwriters will read the information you provide on the towed tender and make a decision to offer either full coverage or coverage with restrictions, which could include limitations such as a 50 per cent deductible while under tow, no nighttime towing, mandatory professional tow bridle, proper lighting, additional battery power or even be outfitted with GPS tracking systems.
'If you have your heart set on a larger tender,' says Lloyd, 'be proactive to help reduce your chance of a claim.' Your captain should have experience towing a tender, the boat should be equipped with the best towing hardware and incoming water should have an easy means of exiting through self-bailing cockpit drains, for example.
'Education is what you get when you read the fine print; experience is what you get when you don't,' as folk singer Peter Seeger famously said. Being properly informed about your policie's, caveats and coverage can eliminate a lot of headaches.
'My advice is to keep your insurance broker up to date on everything the yacht is planning on doing,' says international yacht broker Jim Webster of Webster Associates. Maintaining the open and active relationship with your underwriter and exercising 'due diligence' will help in alleviating claims exclusions and avoid that grey area that may end with a claim being decided by a court.
This article originally appeared in the March 2014 issue of ShowBoats International magazine.