Yacht insurance – your questions answered

The only simple answer is – sometimes; this often depends on the level of liability cover required. If there is a high level of cover needed due to the size, location or use of the yacht, then a distinct policy for the liability with a Protection and Indemnity club (P&I) is normal, with a separate policy for the hull.

P&I is a form of mutual maritime insurance that provides cover for open-ended risks, such as environmental damage, and therefore would usually be relevant to those yachts carrying tens of thousands of litres of fuel, explorer yachts, or where potential pollution would be costly (some can require up to £500million of cover for clean-up costs).  

For smaller yachts and pleasure craft, the marine liability and the hull and machinery risks can generally be covered under the same policy.

In short, no. Yacht insurance should be kept separate from any type of umbrella policy. This is because your yacht is subject to very specific risks such as salvage costs, sinking, stranding, collisions, and environmental liabilities, to name just a few.

Less yacht-specific insurances fail to provide cover for such risks. As such, yacht insurance most commonly, and rightly so, sits as a standalone policy to ensure you are covered adequately and have the right support from a specialist insurer in the event of a claim.

This answer differs dependent on both the policy and insurer. Larger yachts, such as those that require a professional crew, tend to have worldwide cruising cover as standard, allowing the yacht to travel anywhere under the policy. This allows the crew to move the yacht to a different cruising area, to later be joined by the owner and their guests.

Whilst this cover is also available for yachts that are crewed by owners and guests, it is more often the case that particular cruising regions are specified, such as the Western Mediterranean, Eastern Mediterranean, Baltic, UK and Irish waters and inland waterways. Worldwide cover is not provided as standard for these smaller vessels as it is not generally required and comes at a higher cost. Therefore, if the itinerary of the yacht would require more than one cruising area, this should be discussed with your insurance broker or provider who can arrange cover for the regions required.

As we know, Carbon Fibre is extremely strong and light, hence it is often used for the builds of performance yachts, whether motor or sail. If a carbon fibre yacht becomes damaged, it is usually more costly to repair than those made from other materials due to the integral layering processes and the fact that the fibres need to be precisely aligned. Repairs, therefore, need to be performed by specialist companies to ensure a high-quality finish, which naturally, comes at a higher cost and thus results in a higher insurance premium to cover potential claims.

This varies from insurer to insurer. Generally speaking, the older the yacht the more likely it is that an insurer will request a survey, and on vessels older than twenty years, insurers can request regular surveys. However, this does depend on the individual provider.

It should also be noted that larger yachts (generally over 35 meters) will need to have regular surveys at set periods as standard, in order to meet the flag state and class requirements. These surveys vary in intensity from annual safety system inspections to more in-depth mechanical surveys (usually every five and ten years). This varies between vessels but is usually a requirement based on the gross tonnage and use of the yacht.