With the summer boating season now looking like it is finally underway Navigators & General, (part of the Zurich group) is urging boat owners to check they are properly insured prior to entering into racing season activities such as sailing regattas like Cowes Week, or chartering their yachts for training or corporate entertainment purposes.
Most pleasurecraft policies will not include cover for racing or any form of hire or reward, (charter or corporate entertainment) so not arranging the required extension to an insurance policy can leave owners exposed to damage, injury and liability claims, which can sometimes run into hundreds of thousands of pounds.
Events like Cowes week attracts around 1000 competing boats and 8,500 competitors* who race in close proximity, (often in unfamiliar waters) with strong tides and many underwater hazards over a seven day period. The potential for damage to boats and injuries when boats collide is high, so running the risk of not being uninsured or underinsured for racing risks in particular could prove costly in the long run. Navigators would urge boat owners to check their policy extension limits with their insurer before embarking on such activities.
Probably the most common claim insurers experience during events such as Cowes week is collision damage either just before or at the start as boats jostle for position, or at turning marks of the course, where fleets of 100+ converge and try to make a 180 degree turn around a large metal buoy at the same time. Another common claim is grounding damage as navigators try to cheat the tide and hug the shore. Invariably people get this wrong and the damage can vary from a dent in the bottom of a lead keel, to a cracked hull which could sink the boat depending on the speed of grounding and the sea bed.
Windier conditions make for tough racing conditions so skippers and their crews will often push their boats hard increasing the risk of rigging failure, which can often bring the mast of the boat down. Being at the mercy of the wind it is very hard to slow a boat down, and even with detailed racing rules outlining who has right of way in all situations accidents do happen. Insurers do charge higher premiums and apply higher policy excesses for racing yachts, yet despite that they still cost insurers 2 - 3 times more (in proportion to premium income) as cruising yachts. High tech gear and equipment and high liability awards contribute to this trend.
Given the current state of the economy and increasing costs of boat owners ship, (most noticeably the possible doubling of diesel costs when the derogation on marine diesel ends) owners may be considering making their floating investment work harder for them and be considering taking out paying guests for day trips or to watch events.
This type of activity is strictly excluded by most pleasurecraft policies, unless previously agreed and endorsed back in by insurers. As well as the significantly increased liability risk of taking a boat load of guests out to sea and feeding them alcohol all day, skippers have a responsibility by law to ensure that there vessel is properly equipped for taking guests and licensed where required. Failure to do so can result is prosecution, fines and possible imprisonment if injury or damage occurs.
Skippers should be experienced in this type of activity, have a suitable boat, that is properly equipped and fitted out and licensed as specified by the Maritime & Coastguard Agency code of practice for small commercial vessels they should also have adequate crew to supervise guests and handle the boat safely in the forecast conditions.
The additional cost involved in ensuring the boat is properly equipped and insured is likely to far out weigh the risk of being sued without insurance cover, or prosecuted if an accident does occur"
*Figures provided by Scandia Life Cowes Week
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