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Why liability insurance is so valuable for yacht owners

On Behalf of | Aug 3, 2023 | Maritime Ownership

When people discuss boating insurance for yachts, the focus is often on the value of the vessel and the possibility of future repairs. There are obviously many insurance claims each year that directly relate to damage to a yacht or other vessel that an owner may prefer to file a claim to cover. And especially if someone has partially financed a purchase or uses their yacht as a form of collateral for a loan, certain kinds of insurance will be mandatory.

Liability coverage on a yacht often seems like an afterthought. After all, the owner operating the vessel or the professional that they hire to do so will likely have extensive training in safely managing the yacht. However, liability coverage is of the utmost importance for the financial protection of those who purchase a yacht as an investment or as a means of enhancing their personal quality of life.

Liability is a serious concern with large boats

Perhaps there are choppy waters that lead to a run-in at a marina. Maybe someone hires a professional who gets drunk on the job and ends up causing a crash with another vessel. There are countless scenarios in which a yacht may cause injury to individuals and extensive property damage. In such situations, liability insurance coverage may be the only thing protecting the owner of the vessel from a lawsuit brought by the affected parties. The exact amount of liability insurance a yacht owner requires can be very difficult to estimate, as the scope of damage a yacht can cause will also the drastically different on a case-by-case basis.

However, when one considers that professionals usually recommend a million dollars in liability coverage for even small powerboats, it will quickly become quite apparent for yacht owners that a very large liability policy is likely necessary for their protection. Multi-million-dollar policies are common, and may end up being the first line of protection someone has after some kind of catastrophic incident, like a collision with another vessel that leads to serious injury or death.

Especially for those purchasing their first-ever yacht, it is easy to let the excitement of the moment overshadow the practical considerations of the process. Getting the right support when purchasing a yacht often requires establishing the right insurance coverage for the protection of the owner regardless of what happens while the vessel is at sea.