WHAT INSURANCES ARE REQUIRED?
conditions, occasionally, but very rarely it will be suspended during the period that the superyacht is out of water), or conversely that the yard’s superyacht repairer’s liability policy will pay out. • Ship Repairer’s Liability (SRL) insurance: Covers the shipyard in respect of legal liabilities incurred, including in respect of loss of or damage to superyachts in its custody, care and control, and in respect of death and personal injury to third parties. • Waivers of subrogation: It is now common practice for builders undertaking warranty work at their facilities to seek to protect themselves by asking the owners and their insurers for a ‘waiver of subrogation’. This is a clause which prevents the owner and its insurers from pursuing the yard in the event of a loss. Because clauses like this remove the owner’s insurer’s right of recourse against the yard (should the owner’s policy pay out), such waivers must never be signed without insurers’ prior approval. Occasionally, the waiver of subrogation is subject to a cap. Repair yards also often seek waivers in respect of any liability for repair or maintenance work in excess of the limits of liability in the yard’s SRL policy.
relevant, and may also cover the use of helicopters on board the superyacht.
Each superyacht and the requirements of its owner are different and there is no one-size-fits-all insurance solution. The extent of cover needed will depend on the size of the superyacht, where in the world it will be cruising, whether it will be used in racing, whether it will be chartered (and, if so, on what basis), and the number and nationality of its crew.
• Crew medical and accident cover insurance: Provides cover for medical and repatriation expenses. The type of cover varies and what is required may depend on the superyacht’s flag and the nationality of the crew. • Increased value insurance: Provides additional H&M cover for a lower premium where the superyacht is totally lost or damaged beyond economical repair. • War risk insurance: Provides cover for losses caused by acts of war, terrorism, capture, seizure and arrest that are otherwise excluded under standard H&M and P&I covers. Can be obtained in respect of physical loss or damage to the superyacht and of third party liabilities.
the yard refuse to settle a claim for loss of or damage to the superyacht, due to some fault of the yard.
As a general guide consideration should be had to the following types of cover:
During construction
Whilst in service
The construction of a superyacht is a complex and costly project and care needs to be taken to ensure that the superyacht is adequately covered by insurance and the owner’s investment protected. • Builder’s risk insurance: Generally taken out by the shipyard (with the owner’s interest noted) and provides cover for loss of or damage to the superyacht during construction and until its final delivery to the owner. • Owner’s interest insurance: This cover, which is not standard, is designed to pay out in circumstances where the shipyard’s policy does not. This could be, for example, where the builders’ risk insurers covering
Once the superyacht has been delivered by the shipyard the risk in it passes to the owner. The onus is then on the owners and/or managers to ensure that their interests are adequately protected in the event of an accident. • Hull and Machinery (H&M) insurance: Covers the owner for physical loss of or damage to the superyacht and its machinery. It also generally covers any tenders and chase boats. • Protection & Indemnity (P&I) insurance: Provides cover for legal liabilities including damage to other superyachts, damage to dock or harbour installations, wreck removal expenses, death or personal injuries, if
During repairs and refits
Superyachts will invariably have to go into shipyards for servicing, repairs and refit works. Care must be taken to ascertain what policy will respond in the event of loss or damage whilst the superyacht is in the yard. Do not simply assume that the owner’s H&M policy will respond (often it will remain in force albeit subject to special
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