How Does Superyacht Insurance Work, Anyway?

Have you ever wondered how superyacht insurance works?

Superyacht insurance can seem complex, but it’s an essential aspect of maritime operations that aims to ensure the safety and security of both the yacht and its crew. In a conversation with industry experts, we had a look at the intricacies of superyacht insurance. It sure is a multifaceted safety net that covers a wide range of scenarios. Here’s how it works and what it covers – information kindly provided by Nicola and Steven from the Shipowners’ Club.

Liability Coverage: Protecting Owners & Crew

Primarily, superyacht insurance includes Protection and Indemnity (P&I) insurance, which is designed to cover the liabilities of the yacht owner.

This type of insurance does not cover the yacht itself but rather the legal liabilities of the Owner to third parties and crew members.

For instance, if a crew member is injured or falls ill while on duty, the insurance will cover their medical expenses, sickness wages, and even compensation for permanent disability where the Owner has a legal or contractual liability to do so. Additionally, mental health issues resulting from traumatic experiences onboard can also be covered, providing access to necessary counseling services.

Personal Accident Insurance: 24/7 No-Fault Coverage

Apart from P&I insurance, yacht owners can opt for Personal Accident (PA) insurance as an add-on to offer comprehensive coverage.

Unlike P&I, PA insurance is a no-fault policy that applies 24/7, whether the crew member is on duty or on leave. This means that if a crew member injures themselves while on annual leave, PA insurance will cover the medical expenses regardless of fault as long as they are employed under an employment agreement for the yacht. This policy ensures that crew are protected at all times, providing peace of mind to both crew and the yacht owner.

Legal & Contractual Liabilities

Superyacht P&I insurance also covers legal and contractual liabilities.

If a crew member causes damage to another vessel or if a guest or third party is injured due to the yacht’s operations, the insurance will respond to the claims. This includes covering legal liabilities arising from the crew’s actions while performing their duties. Furthermore, the insurance addresses liabilities outlined in the crew’s employment contract, such as entitlement to sick wages and medical treatment.

Navigating Different Jurisdictions

Yacht owners and their crew operate in various jurisdictions worldwide, each with its own legal & regulatory framework.

Superyacht P&I insurers can help the Owner and crew navigate these complexities, providing coverage and support regardless of the location. This includes handling criminal prosecutions, Coast Guard inquiries, and local authority investigations into incidents onboard. The insurance ensures that crew members receive the necessary assistance and protection, even in unfamiliar legal environments.

Supporting Crew Health & Well-being

Superyacht P&I insurers are not just providing protection to the yacht owner; they also emphasise crew health and well-being.

Insurance providers offer various resources and programs to educate crew members about their coverage and how to utilise it effectively. For instance, apps and online resources provide information on crew health, well-being, and safety practices, ensuring that crew members are well-informed and prepared.

Claims Handling & Support

In the event of an incident, superyacht P&I insurance claims are usually handled through brokers who act as intermediaries between the yacht owner and the insurance provider.

This process ensures that claims are managed efficiently and professionally. Insurance providers also have a network of correspondents worldwide who can provide immediate on-ground support during emergencies. Whether it’s arranging medical evacuation or handling legal issues, these correspondents play a crucial role in ensuring timely and effective assistance.

Mutual Benefit & Collaboration

Most superyacht P&I insurance providers operate as mutual clubs, meaning they are owned by their members.

This model fosters a collaborative approach where the focus is on supporting members and paying valid claims rather than finding reasons to deny coverage. This mutual benefit ensures that both yacht owners and crew members receive the necessary support and protection when needed.

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