Understanding Yacht Insurance

Yacht insurance is a crucial component of vessel ownership and chartering, offering financial protection and peace of mind on the water. Whether you are a yacht owner managing a superyacht or a guest embarking on a luxury charter, the right insurance coverage ensures that you are safeguarded against a wide range of potential risks. This article outlines the primary types of yacht insurance and their importance.

For Yacht Owners

Owners should work closely with a knowledgeable yacht management company to ensure they obtain comprehensive coverage tailored to their needs and cruising grounds.

1. Hull and Machinery Insurance  This covers physical damage to the yacht itself, including the hull, engines, and ancillary equipment. It typically extends to include tenders, personal watercraft, and other associated property. Most marinas and harbours require proof of insurance before allowing berthing or mooring.

2. Protection and Indemnity (P&I)  P&I insurance offers third-party liability coverage, addressing claims for injury, death, or property damage caused by the yacht or its crew. It may also cover pollution, wreck removal, and legal costs (International Group of P&I Clubs, 2022).

3. Crew Medical and Liability Insurance  This provides medical coverage and liability protection for professional crew in case of illness or injury while employed on board. It typically includes repatriation, loss of wages, and accident coverage, complying with the Maritime Labour Convention standards.

4. Charterer's Liability (for Owners Chartering Their Yachts)  If you charter your yacht, this coverage protects you from liability claims resulting from incidents involving charter guests during the charter period.

5. Builder’s Risk and Refit Insurance  This specialised insurance protects your yacht during new builds, major conversions, or refits—whether the vessel is afloat or ashore. It typically covers materials, equipment, and liabilities arising during the construction or refurbishment phase.

For Yacht Charterers

Charterers should also consider insurance to protect their travel investment and potential liabilities during their charter experience.

1. Trip Cancellation and Curtailment  This protects against financial loss due to unforeseen events such as illness, travel delays, or adverse weather that force the cancellation or interruption of a charter.

2. Charterer's Liability Insurance  This offers liability protection for charter guests, covering damage to the yacht or injury to third parties occurring during the charter. It is particularly useful in bareboat or skippered charters where guests assume operational responsibility for the vessel.