The main covers, what drives terms, and where claims go wrong.
The main covers
Hull and machinery insures physical loss or damage to the yacht, her machinery, tenders and equipment. Protection and indemnity covers third-party liabilities including crew and passenger injury, pollution and wreck removal. Crew cover addresses employment-related medical and liability obligations. War and strikes, and specialist covers for kidnap and ransom or cyber, are placed where the programme requires them.
- Hull and machinery
- Protection and indemnity (third-party liability)
- Crew medical, personal accident and employer liability
- War, strikes and piracy risks where relevant
- Specialist covers: tenders, toys, art, charter liability
What drives terms
The yacht's age, build, value and condition; her declared cruising area and any navigational limits; laid-up and winter arrangements; crew number, qualifications and continuity; the management arrangement; survey findings; and claims history. Warranties in the policy — such as navigational limits or manning requirements — are conditions, not suggestions.
Where cover fails
Claims are most commonly complicated by breach of a policy warranty: cruising outside agreed limits, a change of crew below the warranted level, lay-up in a location not agreed, or a survey recommendation left unactioned. Disclosure matters too — insurers must be told about material changes in use, ownership, flag or charter activity.
Charter and commercial use
Placing a yacht into commercial charter changes the risk and usually the policy. Chartering without insurers' knowledge can void cover. Confirm the position in writing before any charter is accepted.
Advice
Insurance is placed by specialist marine brokers and underwritten on the facts of the particular yacht. Nothing here is an opinion on cover; your broker and insurer set the terms, and policy wording governs.
Questions
- Is yacht insurance legally required?
- Third-party liability cover is required in many jurisdictions and by most marinas, flags and lenders. Requirements vary, so check for your flag and cruising area.
- Does insurance cover charter use automatically?
- Usually not. Commercial charter generally requires insurers to be notified and the policy adjusted.
This guide is general information about how the yacht market conventionally works. It is not legal, tax, financial or insurance advice, and it does not describe the terms of any specific yacht. Qualified advisers should be engaged on anything material, and rates, prices, availability and access are confirmed in writing before anything is committed.