Fort Insurance

Expert advice accompanying you every step of your superyacht journey

Hugo Jacquot highlights the importance of ensuring that the insurance solutions provided align with your specific and unique needs in every superyacht project or operation.

The New Build Stage
Insurance is very important during the early stages even when you are negotiating your build contract. The future yacht owner will need to consider who has the final responsibility for the asset and, in simple terms, who is paying for the loss of the asset should this happen. One way or the other, the asset needs to be insured when the hull is at the first stages of being laid. A shipyard may offer to insure the asset for you and you will be charged for that insurance under the shipyard contract but they will take care of setting up that insurance for you. However, sometimes you will find that the shipyard will say that you will need to insure the asset and the title of the vessel will be yours from the beginning of the build – so you will therefore need to insure the asset yourself. What you will need to do as an Owner’s representative, or Manager of the Project, Owner or Captain – is to source Builder’s Risk Insurance. This insurance is quite costly and not so simple to put in place.

In addition, a build captain or project manager attending the yard on behalf of Owners creates a liability and the yard will often ask for proof of this liability insurance. One cover that caters for that need is P&I (Protection & Indemnity) Pre Delivery cover. That cover may be put in place as early as the first few days at the shipyard. In summary, make sure that a Builder’s Risk Insurance (whether it is the shipyard or the Owner who arranges it) is in place and that liabilities of Owners are covered as soon as someone attends the shipyard on behalf of Owners.

FORT INSURANCEA short shipyard period for maintenance work or small refit
When the vessel starts trading, of course you will put in place your usual insurance: Hull & Machinery, Protection & Indemnity and Crew Healthcare insurance as a minimum.

However, there will come a time when the yacht may need to go to a shipyard for a refit period. Most Hull & Machinery policies will ask you to notify them when you are going into the shipyard – depending on your insurer there will be a short or long list of information that you will need to provide them with. In the vast majority of cases, you will be asked to provide a copy of the insurance of the shipyard. You may be required to sign a waiver and you will be required to share your insurance documents with them. In order to ensure efficient interaction between you (or the Owner or Owner’s representative, Yacht Managers & Captain), insurers and the shipyard, you will need to provide detailed information which will depend on the insurer. This could be a list of works you are planning to have done, whether you are planning to do any hotworks, the wording of the waivers you are being asked to sign, perhaps a copy of the contract and if you are using sub- contractors, Insurers may wish to look at this in more detail, asking about what the contractors, sub-contractors plan to do and a copy of their insurance.

What seems to be a simple shipyard visit, could end up being an administrative burden on whoever is going to be dealing with it. That is why GOOD PRACTICE is to ALWAYS anticipate your shipyard visits, you may not have all the information from day one, so be sure to approach your insurers early on.

A longer shipyard visit to undergo a large and/ or long refit project
If the yacht is planning a longer refit period – ask the question of your insurance professional if this type of refit sits under a Hull and Machinery trading policy or whether you need a Builder’s Risk Policy.

As we all know, the worldwide fleet of yachts is getting older and will soon need extensive refit work – where perhaps the value of the vessel is going to change. If you have a simple Hull & Machinery trading policy, it is difficult to move that insured value throughout the project because it requires you to justify it with invoices and possibly a survey report – confirming the value of the vessel has increased mid project can be quite tricky to do. With a Builder’s Risk Policy, you can set stages of the project with an incremental increase in value for the project. Should something happen at the shipyard you have your project value going up in stages protecting you from financial losses.

In summary, whether you are heading out on your first superyacht journey with a new construction project or entering a refit period, it is vital to plan well in advance and talk to a professional to protect the Owner, the asset and all those concerned.

For more details Tel: +33 (0)4 22 32 57 30 email: [email protected]
or visit www.fort-insurance.com