Yachts, especially superyachts, are among the most luxurious and expensive assets in the world but they operate in an environment that is full of natural and manmade hazards, from extreme weather events to collision and piracy. Insuring your boat properly is an essential part of mitigating the risk of financial or material losses.

There is no standard policy when it comes to yacht insurance. The required cover will vary on a case-by-case basis but should generally be tailored to protect everything from the yacht itself, to the guests, crew and third parties, equipment and tenders, as well as the contents and furnishings on board, including fine art and luxury items.

The type of insurance policy required and its costs will be affected by a number of different factors, including the size, age and type of vessel, its value, where it will be cruising, the number and nationalities of the crew, anticipated movements by third-party carriers, shipyard protection, finance arrangements and survey requirements.

All yacht insurance packages should offer liability insurance coverage, or Protection and Indemnity (P&I), to insure the owner’s legal liability against third parties, guests and crew, as well as more specialist cover including war risks and piracy and kidnap and ransom insurance.

Exceptional yachts require specialised insurance protection. Through Sovereign Insurance Services, SMS can provide clients with multiple coverage options to ensure the yacht has the best possible insurance package, including:

• Hull and machinery insurance – covers physical loss or damage to the hull and machinery and is generally priced on either an ‘agreed’, ‘actual’ or ‘replacement’ value basis.
• Collision liability insurance – protects the owner from legal liability that may arise if the boat collides with and damages another boat.
• Tenders, dinghies, personal watercraft – specific insurance will be required if not covered under the hull and machinery insurance.
• Protection and Indemnity insurance – to insure the owner’s legal liability against third parties, guests and crew.
• Personal accident, medical cover and salary protection – to provide cover if someone is injured or taken ill during their time on the yacht, including a lump sum in the event of death or permanent disability.
• Marine environmental damage insurance – to protect against potential fines, penalties and clean-up costs.
• Search & Rescue cover – to protect against expenses in relation to the costs of a search and rescue operation or emergency aid and assistance.
• Charter coverage – to cover risks associated with the charter of a vessel, including potential loss of future income if the vessel suffers loss or damage.
• Shipyard cover – to protect the yacht during refit, maintenance, repair or conversion.
• Legal expenses protection.
• Kidnap & Ransom protection.
• Personal and Crew Property insurance – to protect items of property on the boat.
• Fine Arts insurance – to provide specialised coverage for high value fine arts and collectibles on board.