"What is boat builders' insurance?" I was asked recently at a networking event. Of course, the obvious answer would be a rather casual 'insurance for people who build boats' but luckily I took a little time to pause before answering because the answer is can – not be as simple as you might think.
First of all, you have to ask yourself "What is a boatbuilder?" This is important because many shipping companies include this activity in their business description, but repair boats rather than build them. Likewise, there are people who build boats but who do not describe themselves as boat builders. For example, a shipbuilder can build or repair ships – these could be pleasure craft – what we would normally call a boat – or a larger commercial vessel that we would call a ship. We can also add to the mix the craftsmen who restore boats rather than building them from scratch as well as the individuals or businesses who will "fit out" a ship's hull, either for their own use or in the industry. part of their business activities. .
Thus, Boat Builders Insurance is a specific insurance solution that can be part of a larger insurance program for individuals or companies that carry out one or more of the following activities, but do not describe themselves not necessarily like a boat builder:
• Manufacture or construction of pleasure craft and / or certain commercial vessels.
• Restoration of ships such as classic or historic ships.
• Refitting of pleasure boats.
• Layout of the boat.
Regardless of the activities listed above, the structure of the boat builders insurance solution is a standard format. It will provide specialized coverage for physical damage and third party liability. Let's take a look at the elements of what the market in turn calls builder risks:
The wording of insurance policies will obviously vary from one insurer to another and will need to be checked for the precise scope of coverage, conditions and exclusions. Generally speaking, however, a boatbuilders' insurance policy will provide "all risk" coverage for physical loss or damage to vessels under construction, including hulls and machinery, gear and equipment. It may also, depending on the wording of the policy, cover molds and associated molding tools. The other cover provided for in the Physical damage part of the cover may include a specialized provision for costs such as:
• Repair or replace any defective part condemned following the discovery of a hidden defect during the construction of the boat. However, faulty welds would more than likely be ruled out.
• The costs of completing the launching of the insured vessel under construction as a result of a failed launching operation and the costs of launching. Inspection of the bottom of the vessel after a grounding if reasonably engaged specifically for this purpose.
• Loss or damage to the boat under construction due to faulty design of one or more parts of the boat and the cost of salvage of the boat under construction reasonably incurred to prevent or minimize any loss. recoverable as part of boat builders' insurance.
• Loss or damage to the vessel during transit between the place of construction and a launch point for sea trials.
The insured values of ships under construction will normally be based on the total value of ships under construction at any given time (work in progress if desired) and the maximum value of any ship under construction.
This would normally be the completion value – that is, the cost of construction or restoration – and not the sale value. However, in some cases a boatbuilder may require payment in installments at different stages of construction from the beneficial owner of the boat. When this happens, the sum insured may reflect payments made by the beneficial owner and, towards the end of construction, may mean that the sum insured is greater than the cost of construction because the interest of the owner must be noted on the police calendar and certificate.
On higher value constructions and renovations, it may be possible to structure the sum insured (and therefore the premium) around the cost / value of the construction at different stages. I arranged coverage for a superyacht builder where an initial premium deposit was made, followed by additional premium payments which were taken during periodic value statements by the builder.
This part of the coverage shall cover the legal liabilities of the owner of the vessel under construction resulting from physical loss or damage to property of others and / or death or personal injury to third parties while the vessel is afloat for the purposes of works. or undergoing sea trials. It should also cover all reasonable costs incurred for the removal and disposal of the wreckage from the ship or any negligence or failure to lift or lift. Remove the wreckage. The limit of indemnity for third party liability will usually be at least £ 3,000,000, but where vessels of higher value are insured there are limits on insurance. More appropriate compensation should be sought.
Stand-alone or combined solution?
Individuals who restore or fit out their own pleasure craft can take out insurance against the manufacturer's risks through certain insurance for pleasure craft. Coverage would include the hull and machinery at an agreed completion value and civil liability as well. Individuals should seek advice on employer liability insurance requirements that may arise in the event of work being performed by contractors or volunteers.
Commercial companies, charities and trusts can include their coverage against builders' risks in a combined commercial marine insurance policy, in which coverage for their property, interruption insurance activity, public, product and employer responsibility could also be placed. Stand-alone options are also available and boat builders are advised to seek the advice of a specialist marine trades insurance broker to ensure their insurance program is properly aligned with the needs and goals of the boat. business.