Archive for Yacht Insurance

Marine Insurance Explained

Marine insurance is the oldest form of commercial insurance, indeed insurance under contract, and it is little wonder that it holds great fear with students studying for their ACII, due to the complete range of risks that it covers from physical property to transportation liability and the specialist marine cargo goods in transit covers.

Despite the unusual and monopolistic ways in which marine insurance is still delivered to the global market, the actual risks themselves are very well defined and easy to understand, mostly due to time honoured knowledge and the Marine Insurance Act of 1906 which set the standard for all modern underwriting.

Marine Insurance in London

London remains to this day the global capital for placing Marine Insurance risks

Insurance Blog asked Insurance Blogger to get down to the jetty and investigate the market for marine insurance…


Marine Insurance

Hulls, Liability and Marine  Cargo Insurance
Marine insurance was the very first type of insurance contract and has a fascinating and complex history dating back to the earliest coffee shops in London in the Seventeenth century.

Marine insurance is designed to cover watercraft of all shapes and sizes, from the smallest dinghy to the largest passenger liner, however the term as opposed to boat insurance, usually refers to the coverage for larger ocean-going vessels and ships.

The cover has no geographical limits and therefore can insure any vessel under any flag in any part of the world.

The marine market covers a wide variety of risk types including tugs, ferries, liners, cruise ships, dredgers, oil rigs, oil tankers, cargo vessels, drilling platforms, heavy lifting vessels, barges, fishing fleets, motor cruisers, salvage vessels and yachts to name just a few.

Marine insurance has three distinctive risk groups, cover for which can be bought separately or together if necessary and is available for small boats through to ocean-going vessels:

a) Hull and superstructure cover

b) Liability insurance

c) Marine cargo insurance

Hull and Vessel Property Cover

The hull and superstructure cover covers the physical vessel itself against a list of maritime perils and is subject to what is called the ‘Institute time clause’.

At the turn of the twentieth century the Institute of London Underwriters, a collective of Marine Insurance companies and the Lloyds market, agreed and introduced standardised time-tested insurance clauses, and these have been used globally for marine insurance ever since.

The clause is written in plain English and is attached to a policy that contains no information on the conditions of cover itself. It sets out details of the specific marine risk to be covered and the underwriters agreed proportion of that risk. The time clause usually applies to a twelve month period but can be bought for a single voyage.

The cover always extends to both physical damage to the vessel and collision liability.

The insured ship or boat is covered for loss or damage for a list of maritime perils called ‘perils at sea’, fire, explosion, violent theft, piracy, jettison, earthquake, tsunami and volcanic eruption.

Material damage to the ship is also covered for landing and docking equipment, aircraft, accidents in loading and unloading cargo, latent defects and negligence of the officers and crew.

Liability At Sea

However most policies to this day for larger vessels, only cover three-quarters of the risk for collision liability and damage to other vessels. The other quarter is often provided by specialist P & I clubs.

In 1885 marine insurers found themselves unable to cover some of the emerging liabilities of shipowners. Protection and Indemnity associations, known as P & I clubs which had been formed earlier to break the monopoly of the marine insurance market, started to take on these ‘excess of loss’ risks.

The scope of the P & I cover is wide, but in addition to the cover for collision liability provides protection for loss of life and personal injury claims, amongst other crew related benefits.

The associations do not charge a premium as such, but the shipowners pay an annual membership fee into a common pool.

Other marine liability insurance cover that is available are charterer’s liability cover, ship repairer’s liability cover and mortgagee’s liability cover. Liability insurance is often placed in the open market.

Marine Cargo Insurance

The third major marine risk is that of cargo insurance.

Like hull cover the polices are governed by Marine Institute and Trade Association clauses, the main ones which are known as the ‘A,B and C clauses’.

The ‘A’ clause is an ‘all risks’ policy in as much as it covers all damage and loss to the cargo at any stage in its journey.. The other clauses cover named perils only, but can often offer much wider cover for specific risks such as piracy at the Horn of Africa.

Cargo is transported either ‘Free on Board’, which means that the seller is responsible for insuring the cargo until it is safely landed on the ship, or Costs, Insurance and Freight (CIF), which puts the onus of responsibility for covering the safe passage of the cargo on the buyer.

Many people are interested in the safe passage of marine cargo and the level of insurance, which today also includes aircraft transportation.

Those interested include the manufacturer or seller of the goods being shipped, shipping agents, freight forwarders, hauliers, shipping companies, intermediary consignees, selling agents and customs officers at both ports of entry and departure.

Boat Insurance is a London based marine insurance brokerage and underwriter at Lloyds, which can provide all classes of marine insurance.

Originally published online for Insurance Blog by Insurance Blogger

Comparing Yacht and Boat Insurance Quotes

With the recession affecting goods in particularly the luxury end of the market, if you own a yacht or a boat, it pays to shop around at the moment for boat insurance, and to compare the numerous offers to get the best value for your money in what is a bouyant competitive market.

Yacht insurance covers loss or damage to yachts and/or damage or loss caused by the yacht to third parties. Yachts can be a significant investment hence requiring comprehensive cover to prevent losses due to unforeseen events is essential. As a yacht owner you need the composure which you will get when you know that you are covered, should anything untoward happen.

Providers of yacht insurance in most cases tailor make the policies for your individual needs. You should therefore assess the risks you and your yacht will be exposed to during intended use. You should also figure out the cruising range for your yacht. Will you use your yacht abroad or in the confines of your country coastal areas? How often will you travel abroad? Such questions should guide you in assessing your needs. When you know what you need you can obtain quotes from the different insurers.

The sum insured for your yacht can be based on a value that is agreed on or on the actual value of the yacht taking into account any depreciation. Most policies however are based on the value that is agreed on. That way the losses due to depreciation are not incurred in the event of total loss of the yacht. Repairs can also be made with new components.

It is important to understand the terms and conditions in the proposed policies so that you do not overlook something that may return to haunt you. Normally, every policy has exclusions that try to guard against unjustified or fraudulent claims. In the event of claims you will need to satisfy the insurer that you took reasonable action to prevent the occurrence of the risk. Try to ensure therefore that you understand the exclusion clauses as failure to adhere to conditions may result in the policy being voided. Some insurers can have restrictions on the models that they insure. Make sure your particular model is covered. Policies may include geographical limits. This however may be extended when needed.

It is beneficial to join a yacht club in your locality so that you can get information on issues pertaining to yacht ownership. Usually as a member of a yacht club, you will be entitled to a discount from partner insurance firms. They may also provide you with tips and advice on what to watch out for when selecting a suitable policy. You could also benefit from checking out insurers that do not specialise in yacht insurance as they may be cheaper than yacht insurance companies.

Things to consider when getting yacht and boat insurance quotes online

 Different companies provide a variety of policy wording and you may be confused what sort of policy you require. The cover offered by an insurance company and the service provided by it can differ greatly. Hence remember that if you buy a cheap policy, you may end up spending more money in the long run, if you make a claim. The most important points to consider before you buy insurance for your boat are:

  • Third party liability: You must always go for liability insurance as this covers you in case you have caused damage to another boat or have caused injury to a person.
  • Comprehensive cover: This insurance covers you for any accidental damage, theft, fire and vandalism.
  • Theft cover: When your boat is not in use, this policy covers you against theft. However, each insurance company has different requirements and you have to adhere to them or you may be left uninsured.
  • Towing: Most policies cover expenses which cover towing waterskiers, kneeboards or inflatable toys, though restrictions may apply.
  • Policy excess: This is the amount you have to pay if any claim is made.


Speedboat Insurance

Ways to save money on your boat and yacht insurance

 Another way of reducing the cost of boat insurance policy is going for voluntary insurance excess. But remember that in an event of a claim you will have to pay the excess. So ensure that you are able to strike a balance between cost of the insurance and the excess you choose when trying to reduce your boat insurance premium in the UK.

Marine Insurance Counts the Cost of Increased Attacks by Pirates!

Unbelievably Marine Piracy continued to grow in 2009, which should be a sobering thought for all us sea dogs who like to roam the seven seas.

The ICC International Maritime Bureau’s Piracy Reporting Centre (IMB PRC) has just released it’s 2009 annual report and it makes bleak reading for insurance loss adjusters and marine insurance actuaries trying to set rates for 2010.

Piracy and armed robbery incidents topped 400 in 2009.

Incredibly in these days of satellite surveillance and Type 45 Destroyers,  incidents of Marine Piracy have grown from 239 in 2006 to 406 in 2009.

The total number of incidents attributed to the Somali pirates stands at 217 with 47 vessels hijacked and 867 crew members taken hostage.

Somalia accounts for more than half of the 2009 figures, with the attacks continuing to remain opportunistic in nature, with small high speed outboard land based vessels being used to pick off a certain type of easy target.

So what precautions against pirates are being taken?

All shipping and vessels in the gulf are required to transit the Somali coast in convoy with a minimum speed of 10 knots with absolutely no stops or slowing.

It is recommended to protect the boat with razor wire around the freeboard or the the lowest area of the deck.
Greased or electrified handrails have been used although the vessel owners are encouraged to use non-lethal deterrents to prevent the situations escalating.

Vessels that regularly transit the area even resort to welding doors shut and welding metal plates across windows. The return of the Iron Clads!

It’s quite obvious that America doesn’t want to get involved in the region after the Blackhawk incident, however it’s Insurance Blogger opinion that until very stern measures are taken against the major perpetrators, these attacks will continue and continue; and the cost of freight insurance and boat insurance will rise and rise……


British Hostages Paul and Rachel Chandler, taken by Somalia Pirates, are spending their 159th day in captivity!

Hey Gordon Brown!

How about this for some political capital this Easter…….


We interrupt the Snooker final for a message from Prime Minister Gordon Brown..

” It is with great pleasure that I have to tell you that this morning a team of our finest Royal Marine Commandos, successfully carried out a mission to rescue Mr and Mrs Chandler. There were no British Casualties……”

Transport, Marine Insurance and Marine Cargo Insurance

Transport, Marine Insurance and Marine Cargo Insurance – The Oldest Profession
By Insurance Blogger Paul Magus

Insurance brokers were already an established feature of the London Commercial and Finance scene by the time of Queen Anne. At the beginning of the Eighteenth Century Stuart and Hanoverian England controlled most of the trade runs around the Globe and the British Empire was in its early heyday.

Insurance Brokers came into existence because the marine insurance of ships (hulls and cargoes) emerged slowly as the part-time occupation of a large and disorganised group of private individuals, some with specialised knowledge such as merchants, ship owners and bankers, but including a wide range of people whose only common characteristic was that they had capital to speculate and large profits were available for risk seekers during these enterprising times of discovery. The first insurance broker was a Marine insurance broker and came into being as a response to a need at the time.

This miscellaneous group of individuals included, at one time or another, such diverse figures as Samuel Pepys, the Admiralty civil servant and famous diarist, and Daniel Defoe, the celebrated journalist and novelist, but no doubt there were hundreds if not thousands of others who, in the gambling spirit of the age, were willing to put their signature to, that is to underwrite, a list of people sharing a risk.

Because of the hazardous nature of marine insurance, no one would gamble more than a fraction of his (or her) fortune on any particular vessel, and so someone had to run round the City to assemble a list of names to provide cover for each of the ships leaving port, the so called Lloyds List provided by an early bookies runner.

As Gibb writes in his Lloyds of London, the brokers were the fixed point in a floating market.

It was they who were the professionals, the full-time men who depended on insurance for their daily work and livelihoods, who kept recognised offices, knew the responsible underwriters and, through long experience, were best informed on the nature of marine risk.

Over the next 300 years of so until the present day, the evolution of insurance broking saw many ups and downs, but was characterised by three outstanding features: the growth, diversification and, most recently, amalgamation of insurance broker firms. Insurance products themselves have followed the insurance broker evolutionary path and likewise responded to the needs of the times.

How Mr Pepys would marvel at the way Insurance is now transacted everywhere across the Internet. Marine Insurance is readily available online today for global cover and risks and can as easily be obtained by the small boat owner seeking boat insurance cover as the large shipping magnate looking for cruise ship insurance. Equally available, Freight Forwarders Insurance and Marine Cargo Insurance< advice, risk information and quotes can also now easily be obtained online, as can tracking the progress of shipments.