Yacht Chartering Insurance – Insurance is an important consideration when chartering a yacht. It should be discussed with an insurance agent who specializes in yacht insurance. The important documents are – the Yacht’s Insurance Policy, and The Charter’s Personal Insurance Policies. This area may seem confusing and an area for concern but it is handled very professionally every day throughout the world without difficulties and at an expense that is reasonable.
1) Liability ‐ Just because a charterer is on someone else’s boat does NOT mean that Charterer’s assets are properly covered. In the event that a charterer’s act or failure to act causes bodily injury or property damage to a third party, that charterer could be liable for a large sum of money. While most charter clients will have personal umbrellas, those liability umbrellas may NOT protect them from third party claims originating out of negligent acts of yachting activity. Also, just because a charter takes place under a MYBA or AYCA contract does NOT mean that section 16 of the contract has been complied with by the owner, which means the charter client may NOT enjoy the liability protection of the yacht owner’s policy. Furthermore: and this point is VERY IMPORTANT – if a client purchases charterer liability there can be NO watertoy indemnification in the charter contract, otherwise the charterer liability is voided. Also, if the client signs a hold harmless agreement on board the yacht, that hold harmless agreement voids the charterer liability.
2) Trip interruption/cancellation is very affordable and is easy to claim on; and the company pays quickly. It covers interruption and cancellation for nearly every reason, and includes cover for the covered person in the event the person must leave a trip to return home to take care of a sick family member. It covers trip interruption, trip delay, trip cancellation, lost luggage, delayed luggage, per diem expenses for delays in excess of 5 hours, expenses of staying overnight after a delay, medical expenses, medical transportation, medical evacuation, etc… can rate trips up to $100,000 per person. It’s very quick and we always suggest it. Trip interruption/cancellation needs to be purchased within 15 days of initial trip deposit to enjoy the maximum benefit of the plan.
3) Hurricane. Hurricane protection is for the yacht. Some yacht owners pay for it, some don’t and some have exclusions. The most common exclusion is that no windstorm coverage is available for yachts south of Cumberland Island, GA or Moorehead, SC during the period 1 July – 31 October. If there is no hurricane cover in place this means that there is no hurricane coverage for the yacht if the yacht is in “the box” during that period. If she is outside the box – north of the specific longitudes, then any windstorm damaged is covered. Trip interruption/cancellation covers travelers for weather delays/cancellations.
4) PWC – the $64,000 question. Charterer liability does NOT automatically cover charterers for the operation of PWC, and yacht policies do not automatically cover charterers for the operation of PWC – from a liability standpoint, meaning that if a charterer’s negligent use of the PWC leads to bodily injury or property damage of a third party then it is entirely his responsibility with no insurance available to answer the suit. Many charter brokers wrongly assume that a yacht’s policy automatically covers their use – and that charterer liability automatically pays PWC liability claims. This may not be the case. For this reason, a marine insurance agent needs to be brought into the loop.