How to Protect Your Private Yacht

A blog post by Jonny Davies, Private Client Account Executive

Introduction

If you’re lucky enough to be the proud owner of a boat or yacht, it is absolutely an investment that is worth protecting with an adequate insurance policy. Whether you’re new to the world of yachting or an experienced sailor, ensuring you have adequate cover in place is a vital step in protecting your assets in the unfortunate event of a loss.

While there is no legal requirement to take out boat insurance in the UK, it is always recommended. Most marinas and harbours will require you to produce a certificate of insurance in order to dock at their location.

The History of Boat Insurance

Marine insurance is the oldest form of ‘modern’ insurance and dates back to the 1680’s and the formation of the ‘Lloyds of London’ Insurance market itself, where Edward Lloyd opened a Coffee Shop on Tower Street in London. This coffee shop was often frequented by Ship’s Captains, owners and merchants, who would often exchange information about the sinking of ships and other ship/cargo losses. From this, the Lloyds of London marketplace was formally established.

Why is Yacht Insurance needed?

Yacht Insurance, much like many other personal insurance policies can cover you and your assets for a wide variety of potential risks. If adequate cover is in place, the insurer will pay out if the vessel or individual is affected by an insurable risk/ peril. In turn you pay an annual premium in exchange for this cover.

Types of Cover included in Yacht Insurance

Hull Insurance
This covers damage to the vessel itself including the machinery, hull and sails against things such as fire, grounding and collisions.

Liability Insurance
Such as damage to third parties or other boats. Most UK marinas and harbours require at least £1,000,000 of cover for third-party insurance to protect their customers. You might also need to provide evidence of third-party insurance to get an inland waterways licence or to moor in a recognised area.

Personal Accident Cover
Covers individuals aboard the boat in the event of injury.

Theft and Vandalism
Provides financial compensation in the event that your vessel is subject to theft or any damage caused by vandalism.

Common Exclusions on a Boat Policy

Much like any other insurance policy, there are some common exclusions to bear in mind.

Whilst each policy is unique, there are common exclusion you’ll come across

• Wear and Tear
• Sailing Under the Influence of Drugs/ Alcohol
• Territorial Limits

Factors Effecting Your Insurance

Value
Naturally a more expensive vessel will attract a higher premium ,

Usage
How your boat is used can also affect your insurance premium. For example, a vessel that is used in open seas would generally result in a higher premium compared to one that is used exclusively in sheltered waters, due to the increased risk.

Experience of the Owner
When providing a quote for a boat policy, insurers will take into account the experience of the owner. Much like car insurance, premiums can often be more expensive if the client is new to yachting and does not have much experience in charge of a vessel. Many insurance policies will also offer a discount on the premium if the owner obtains some form of formal qualification with the Royal Yachting Association (RYA).

Security Measures
Security devices such as GPS Trackers or alarms can reduce your premiums in certain circumstances. The usage of these devices can help reduce the risk to the insurer and they would look favourably on this.

Conclusion

Yacht Insurance, like many other insurance policies can be tricky waters to navigate. It is important to strike a balance between ensuring you are adequately covered  whilst not  a premium for cover you might not need. That’s why it is always best to speak to your Broker to make sure they are offering you a policy which best suits your requirements.