A Guide to Insuring Your Yacht in the UK Insurance Market

When it comes to the world of yachting, there are many exciting adventures to be had. Like all things in life, it pays to plan ahead and do your due diligence, including speaking to an insurance adviser and considering your yacht insurance options so you can set sail without a care in the world.

Some of you reading this will have been around boats your entire life, for others it will be a more recent passion. I’ll willingly hold my hands up and confess to falling into the former category; I have been in love with boats and all things nautical since the age of 10 and am lucky enough to have a career which has allowed me to indulge my passions on a daily basis.

I am a specialist yacht insurance adviser for Partners&, and I guide my clients through the process of boat ownership and insurance, be that a five-meter sailing boat or a £10m super yacht. I know the feeling of excitement when planning a new purchase and, sadly I know the pitfalls from what can be a ruinously expensive passion, but that’s never stopped me and nor should it stop you. I’d like to share with you some advice regarding boat ownership.

Should I speak to an insurance adviser before I buy a boat?

Absolutely. My clients see me as their expert in the marine marketplace and by working together from the beginning I can save you time and money on your boat journey. Speaking to me when you have an idea of what you are looking for will allow us to talk through things like:

• How significant a vessel you are looking for? Because the larger the vessel the harder it is to berth it and the more expensive it will be to find moorings.
• Your qualifications to sail a yacht or motorboat – we can explain what is needed and send you details of courses.
• How you intend to use your craft.
• Where you intend to keep it. Secure marina berthing will help optimise premiums.
• Do you ever intend passaging and cruising further afield, such as Europe? You may need to extend your insurance for this and the adequacy of qualifications, experience and minimum crewing becomes a feature.
• Will you ever use it for commercial reasons – this will require amended insurance cover, see below.
• If you’ll have crew on board, your liabilities as owner to them in sickness or injury become an important consideration.

As you can see, there’s a lot to consider. We also have an entire eco system of recommended marine-related businesses we work with, from training courses to refit, repair, equipment, surveyors and so on, which could save you many hours in front of the laptop.

Do you have questions about insuring your yacht? Contact our partner Partners&

Is there a minimum value of boat or yacht that you will insure?

Absolutely not. Our passion is boats and we all started with something small, so whether you are coming to us with your very first maritime purchase or having a new super yacht built, we would be happy to act as your insurance adviser.

Do I need any kind of qualifications to own, helm or operate a sail or motorboat in the UK?

You may be surprised to discover that no, you do not need any qualifications to sail or helm a boat in the UK, however, it is hugely encouraged that owners gain the relevant Royal Yachting Association (RYA) qualifications for the boat they own. I can guide you towards these courses. We also recommend the International Crew Competency (ICC) course for families who will be sailing together regularly.

It is worth bearing in mind though that if you want to charter a boat for a week in France, you will need to show your ICC or RYA certificate and in certain countries you may be required to go through a practical skills test before they issue you with a ticket to allow you to sail.

What if I want to use my boat to earn money, via chartering, will I need a different insurance policy?

Yes – you will need to amend your cover and there are two types of chartering. The first and most popular choice is a ‘skipper chartering’. As the name suggests, this is when you allow guests to hire your boat but with a professional skipper in full charge the entire time.

The second kind is called a ‘bare-boat chartering’. Again, as the name suggests, this is renting out the entire boat, and all the inherent risks that come with it. Your guests would need to prove competency – for example, do they know how to sail a boat, and do they have evidence (a certificate) to prove it?

What happens if one of my friends has an accident on board my boat, am I covered? Are they? What if they sue me?

You are only liable if legally obligated because of your negligence and you failed as the owner of the boat to operate it safely and maintain it in a seaworthy state, therefore inadvertently allowing the accident the opportunity to happen. Other than that, if a guest of yours has a simple ‘no fault’ accident then no, you are not liable.

Having said that, to make sure all your friends and family are covered I’d recommend you take out ‘personal accident cover’ so everyone on board is protected and liability is not necessary; a small price to pay for your peace of mind when welcoming friends onboard.

If you have professional crew on board then it becomes a whole different issue. You will need emergency crew accident and crew medical expenses – this is purely for the crew and is purchased by the crew’s employer, be that an agency or you, the boat owner.

What if my boat is in Spain or anywhere else in the world, can I insure it from the UK?

Absolutely, yes. We insure boats all over the world.

Marine ‘risk’ is a global proposition that we break down into different ‘cruising areas’. Each area costs a different amount to be insured in. For example, it will be cheaper to insure your boat purely to pootle up and down the inland waterways of the UK than a global cover that could see you sailing into areas that might involve significant risk from hurricanes, storms, ice, and extended claims support needs and so on.

Each cruising ‘area’ comes with different costs to insure, with the highest being, Hong Kong and The Caribbean, because of the high risk of named windstorms, hurricanes and typhoons, as well as The Red Sea and all of its peninsulas due to the risk of terrorism or pirates. If you had to go through this area, you would have to pay a large premium, insurance could be hard to find and you’d want full maritime security and protection as you passed these troubled waters. Not for the beginner sailor.

If my boat were moored in Spain and was badly damaged, am I expected to fly out there to deal with the insurance claim?

Let’s suppose your luxury yacht catches fire, ordinarily insurers will appoint a local loss adjustor to attend the site of the fire along with local fire investigators, marine accident investigators and port authorities. I would be in attendance, and I’d normally expect the client to attend, or to send a representative.

We recently heard a tragic story of five boats being destroyed in a marina in Croatia. One boat caught fire, and with no procedures in place to move boats in the case of fire, the other four were left in place, caught fire and were destroyed. Make sure your marina has a plan for emergency boat moving in such a case.

For boats over £20m insurers will expect to see a written plan of exactly how the boat will be managed when you are away, including daily visits from a third party (called a gardiennage service) to check there are enough fenders are out, adequate mooring lines, no ingress of water and auto bilges operating, no visible damage, break ins, or fire risk.

Do I have to tell my insurance adviser if I am moving my boat from its regular marina?

Yes. As always with insurance, your premium is based on the information we give to the insurer at the time of taking out the policy so, if you decide to remove your boat from its ‘approved’ marina, with full security, then understandably the premium could increase if the new location is exposed or does not benefit from the same protections, so we’ll need to let your insurer know.

Insurers are very keen on owners keeping their boats safe, to the extent that some many well offer to waive the excess on any claims, which can run into many thousands of pounds, if you keep your boat in one of their ‘approved’ marinas.

Is there anything I can do to reduce my boat insurance premium?

I would recommend that you undertake a full survey of your boat every five years, out of the water, if possible, to check the condition of the hull and all of the skin fittings (sea cocks and valves). Anything that comes into contact with sea water will perish over time, so it is important to keep a close eye on things.

For sailing boats, we would recommend an inspection of standing rigging and an entire replacement every decade.

Your insurer will want to see evidence of regular maintenance as well – although there is no equivalent to the car’s MOT in the marine world, and the care and upkeep of your boat is entirely voluntary, all policies carry an implied condition of seaworthiness and to maintain the vessel with due diligence, and it will adversely affect your insurance premium if you cannot show regular maintenance of your boat.

What are the main things I should be looking for on a good boat insurance policy?

Obviously, not all of these things will be relevant to all boats but generally you need to see these things in a policy:

• A policy written in plain English
• An agreed value policy
• No deductions for wear and tear
• Hull and machinery loss and damage (inc fixtures & fittings)
• Personal effects
• Personal accident
• Medical expenses
• Tenders
• Water sport toys
• Third party liabilities
• Extended cruising areas
• Charter
• Enhanced machinery breakdown (only on vessels under five years old)
• Loss of charter hire
• Emergency crew accident and crew medical expenses
• Legal Expenses

What are the main types of insurance claims on boats?

Sadly, as you’ll see the first two are human error-based and avoidable, making sailing qualifications really important when buying and sailing a boat:

• Grounding
• Collision
• Fire
• Escape of water (for example, bathrooms in cabins leaking)
• Sinking
• Theft
• Theft of outboard motors

What are the main reasons for boat insurance claims being rejected?

Misrepresentation and value. Recently a legal precedent was set when a boat owner who had his boat over insured, had his claim rejected on the grounds that the boat was being sold publicly for considerably less than the amount he put down on the insurance policy. Always take care to disclose openly answers to any questions asked, and to provide any information that an insurer could reasonably expect to be given when deciding what terms can offered. Don’t mess with insurers, always put the exact figure your boat is worth, not what you wish it was worth. Have your boat valued regularly and make adjustments to your policy accordingly. Luckily boats only depreciate by five – 10% a year, so unless you fail to maintain your boat then it should hold its value well.

What is the benefit of coming to an insurance adviser like Partners&?

As I hope I’ve demonstrated in this article, a genuine knowledge of the subject and an extremely personal service. I will be with you during your entire ownership journey, handling any claims and making sure I get exactly the right policy for you and your boat so that you and your family can enjoy many happy hours of sailing.

By Mike Taylor-West, Insurance adviser, Partners&

Partners& challenge the status quo by delivering insurance advice that makes a difference. Combining technical knowledge with service and intelligent use of technology, they offer clients the confidence and peace of mind that you are protected so with tailored recommendations that are right for you.