Insurance for a charter skipper
From pure passion, and only then as entrepreneurs, we have been practising the sport for more than 15 years. This story about insurance in sailing reminds me of the discussions about winter tyres: for years we sailed with whatever tyres we had on the local market, we didn't even know that winter tyres existed, and yet we survived, it worked just like that... Well, as you know, the situation has changed, for the safety and good of all! And as safety comes first in the Capetan ethos, insurance plays a key element. Many years ago, either there was no sailing insurance, or there was and nobody knew about it, or there was and we knew about it, but we didn't understand what and how it worked.
Today, information is more accessible and we are here to guide you. We use our years of experience in the field to help you understand which option is right for you. The lines below aim to shed some light on the subject of insurance and help you understand and use the right insurance to suit your real needs.
Deposit Insurance
Firstly, those of you who are already doing charter weeks, or those of you who are about to do so, you will see, the moment you charter a boat, a condition listed as mandatory in the booking form: DEPOSIT or Security Deposit.
What is this DEPOSIT? In short, a deposit is a sum of money paid in advance to cover possible damage to the boat during the hire period. It is refunded at the end of the hire period if no damage has been found.
How and by whom is the amount of this deposit determined? Well, not the boat owner, but the boat insurer. You can think of the amount required as a deposit as the maximum excess in the event of total damage (sunken boat/damage whose repair would exceed the value of the whole boat).
Why are not all deposits the same? Because they differ, either because of the equipment of the insured boat, the insurer and the conditions under which the boat is insured.
The amount of the deposit is considerable because a serious damage, including parts and labour, can very easily reach colossal sums. Well, in order to minimise the risk and to ensure that ordinary people continue to have access to this magical phenomenon of sailing, insurance companies have created products dedicated to the sailing/chartering industry.
I'll start with the most common and recommended: Deposit Insurance.
This is an insurance on the amount of money you leave as a deposit when you rent a boat. Please note that if you have Deposit Insurance, it does NOT exempt you from paying/blocking the Deposit amount at check-in.
How does it work? If you have a damage during the charter week, at check-out it is identified, you receive a report from the charter company with an estimate detailing the amount of x eur and x eur is immediately stopped from the deposit previously blocked at check in, and you can finish your charter week (leave the marina). Afterwards, you contact the insurance company with which you contracted the Deposit Insurance and open a "Claim", a file (without the rail 🙂 ) in which you explain what and how it happened and how you ended up with the damage. Each insurer has its own procedure, but the general mechanism is the same: after reviewing the file and if no problems are detected (negligence, drunkenness, fraud), the x eur are recovered in the account specified when you took out the insurance policy.
Deposit insurance should be chosen according to the contractual amount to be covered, which means that it will vary for each individual charter contract. The amount paid for Deposit Insurance is non-refundable if you have no damage during the charter week.
Damage Waiver
You'll also find options with direct charter firms such as Damage Waiver or Waiver Insurance or maybe other names, but they do the same thing. What are they? They are non-refundable amounts that your reduce the amount of the deposit locked at check in and insure it at the same time. To make it easier I come with an example: we have a Lagoon 46 2024 in Italy whose deposit is 5000eur per charter week. I pay 500eur Damage Waiver and at check in I block 2000eur (a more easily digestible amount) instead of 5000eur, and the 2000eur left deposit is directly insured. Note that these waivers do NOT insure clogged toilets, lost/stolen outboards and dinghies, negligence or cases where the skipper was intoxicated.
Damages
And while we are on the subject of damage, we always say that whatever happens, the skipper is fully responsible, but we know that there are cases where this is not the case. You're not going to hold a skipper responsible because a hatch was broken by a crew member who stepped on it, even though he was briefed and expressly told to avoid stepping on it. In this case, the damage is attributed to the crew, not the skipper. If the skipper enters a mooring with an improperly prepared breast line and when pivoting on the windward line a stanchion (for example) flies off, the damage is unequivocally attributed to him (the crew has no bearing on the skipper's attention and preparation). You realise the discussions are endless. A simplified industry saying goes something like: what's under the water is the skipper's what's above is the crew's 🙂
Skipper Liability
An often overlooked and little understood, though perhaps even more important than this Deposit Insurance, is Skipper Liability Insurance. What is it and what does it do? It is insurance against the risk of damage caused to third parties. What's more, in the event of a damage, the insurance legally represents you (something often overlooked). For example, you have a charter boat for which you have a deposit of 2000eur, you have taken out deposit insurance and you are at peace; in a crowded marina, through an uninspired manoeuvre, you end up shooting a stripe from bow to stern with your anchor on a 3 million eur super yacht. Guess what, you're insured for the 2000eur deposit, and your boat is fine, but that superyacht needs fixing. Well that's where skipper liability comes in!
The right insurance
The best package remains, without doubt, the one composed of Deposit Insurance + Skipper Liability. Now it remains to identify the right one.
At the moment we identify 3 situations related to the frequency of going out on the water: if you go out more than twice, if you are a professional skipper and if you go out once or twice a year maximum.
If you get out several times per year, then it makes sense to invest in YachtPool insurance that covers you for 12 calendar months, no matter how many outings you have and how many damage claims you have.
At the moment, the bonus-malus system is not applied in charter insurance, but I honestly think it's only a matter of time before it appears.
If you are professional skipper Capetan and you have many weeks of sailing per year mixed with private weeks, Capetan has created, together with YachtPool, the right insurance for you. Details HERE.
If time doesn't allow and you only have one-two If you are going out per year, then an annual insurance is not really justified and you would rather choose a one-off, per charter week insurance from Pantaenius. This is also the deposit insurance we recommend for weeks of private charter through SailArmadabecause even when you're in a week of privateThe deposit must be left and insured (in case - for example - you inadvertently step on a hatch and break it, even though the skipper has told you to do so)
How it got Capetan to partner with the most powerful insurance companies in the industry and create customised packages and products dedicated to the community? Through hard work, we have demonstrated the high level of our trainings - we are leading promoters of safe sailing through appropriate training of our students to the highest standards.
We are waiting for you at training!
