Salvage cover in marine insurance

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yotter

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I may soon take out a marine insurance policy for a new to me boat. The policys usually have a value for the boat which is presumably paid out in the case of a total loss. But what happens if the vessel is lost (as quite a few were up here at the weekend due to Storm Amy) and for example ends up on a beach or sunk in a position where it has been salvaged. Do the insurance companies have a limit of liability. It occurs to me since the cost of salvage could potentially be more that the insured value of the vessel. The third party liability is clearly much higher but not sure if this applies.
 
yotter said:
Many thanks, I will check. I searched for salvage, nothing found.
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I think that from a legal perspective a 'salvage' award and a total loss are mutually exclusive and a salvage award (at arbitration) could not exceed the value of the vessel and contents.

"Wreck removal" (as it is termed in my policy) could exceed the value of the vessel and is normally a separate item.
 
Looks like it is covered under 3rd party liability?

5) Third Party Liability
Cover under this section only applies if this section is shown as ‘In Force’ in the Schedule.
5.a.1) What is covered:
Cover is provided for:
1. Sums which any Permitted User is legally liable to pay arising out of their interest in or use of the Vessel, Trailer or Trolley resulting in: a. death or bodily injury to any person; or b. loss of or damage to property not belonging to the Permitted User; or c. pollution.
2. The costs of any reasonable action taken by any Permitted User in an attempt to avoid or reduce any insured liability.
3. The costs of attempted or actual raising, removal and destruction of the wreck of the Vessel
 
It does pay to read the details in the policy. I have found in the past that only the schedule and summary of the policy was issued at renewal. I asked for the policy document, which was provided, and found that certain clauses limited my cover. These were all addressed by the insurance company. My point is, read the detailed policy document to understand what you are getting, and repeat each year at renewal.
 
It is important to realise that the owner will not get a penny from any claim in respect of any third party insurance clause. As its name suggests, it exists only to protect the owner in the event of a claim by a third party for damages caused by vessel or owner in the pursuit of use of the vessel. If the boat is ashore due to a storm, the cost of recovery is limited to value of the vessel and if that value will not cover the recovery cost it may not be recovered. Unless someone like the Harbour Board or Crown Estates requires it and in that case the insurer will lay claim to the wreckage unless the owner pays for the salvage.
 
Bodach na mara said:
It is important to realise that the owner will not get a penny from any claim in respect of any third party insurance clause. As its name suggests, it exists only to protect the owner in the event of a claim by a third party for damages caused by vessel or owner in the pursuit of use of the vessel. If the boat is ashore due to a storm, the cost of recovery is limited to value of the vessel and if that value will not cover the recovery cost it may not be recovered. Unless someone like the Harbour Board or Crown Estates requires it and in that case the insurer will lay claim to the wreckage unless the owner pays for the salvage.
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It’s a while since I read a marine insurance policy. Probably not since I sold my last boat more than 10 years ago. But - in an all risks policy - I would have expected to see third party liability as a separate head of claim to loss of boat rather than an either/or proposition.

Forgive me if I misunderstood your post and we are on the same page.

And, of course, if the policy only covers third party liabilities there would be no payout to the insured.
 
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yotter said:
I may soon take out a marine insurance policy for a new to me boat. The policys usually have a value for the boat which is presumably paid out in the case of a total loss. But what happens if the vessel is lost (as quite a few were up here at the weekend due to Storm Amy) and for example ends up on a beach or sunk in a position where it has been salvaged. Do the insurance companies have a limit of liability. It occurs to me since the cost of salvage could potentially be more that the insured value of the vessel. The third party liability is clearly much higher but not sure if this applies.
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My insurance includes £50k cover for "wreck removal". It only covers situations where there's a legal obligation to remove the wreck.

I've never thought about it before but presumably if a boat sinks somewhere where it (say) obstructs someone's mooring then I'd guess that would/could still be a third party claim by them against the policy rather than "wreck removal".
 
Mark-1 said:
My insurance includes £50k cover for "wreck removal". It only covers situations where there's a legal obligation to remove the wreck.

I've never thought about it before but presumably if a boat sinks somewhere where it (say) obstructs someone's mooring then I'd guess that would/could still be a third party claim by them against the policy rather than "wreck removal".
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Yes, my concern is where the removal may be more that the insured value of the boat and I cannot just walk away, i.e. I may be legally liable for its removal. But it looks like 3rd party cover may cover that. Its not very clear to me?
 
yotter said:
Yes, my concern is where the removal may be more that the insured value of the boat and I cannot just walk away, i.e. I may be legally liable for its removal. But it looks like 3rd party cover may cover that. It’s not very clear to me?
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The way in which insurance policies tend to be written is to set out the risks that are covered and, separately, the limitations and exclusions applicable to specific risks.

For example, a common recent addition to all risks house insurance policies is to exclude cover for data loss resulting from a cyber attack. Whilst all policies will have a general exclusion for loss resulting from dishonest behaviour on the part of the insured.

I’m afraid that, what I’m saying is that you have to read the whole policy: the answer won’t necessarily be found in one paragraph.

Some policies are relatively easy to read: dividing the wording into helpful sections for each type of risk with subheadings such as “What is covered” and “What is not covered”. Others are less so and can be hard work.
 
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yotter said:
Yes, my concern is where the removal may be more that the insured value of the boat and I cannot just walk away, i.e. I may be legally liable for its removal. But it looks like 3rd party cover may cover that. Its not very clear to me?
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Nor me, and I can't be bothered to read the exclusions on the policy. Seem unlikely it specifically excludes 3rd party liability due to sinking but 🤷‍♂️.

I do still have a weird faith that if my boat sinks in front of HMS Queen Elizabeth trapping her in her berth and the Navy spent £2.5 Million recovering it with a squadron of F35s that my insurance will cover it somehow.

Wouldn't be the first time insurers added cover that sounded useful but on closer investigation meant nothing.
 
When I sailed on Kielder Reservoir years ago, the authority needed to check your insurance cover. Not just for damage to others property/boat, or killing a fisherman in a dinghy, but especially for potential damage to the reservoir and its equipment. The moorings were maintained by them, but there was a usually a yearly drifting boat when the owners strops wore out . Consequences would be millions £. Any payout for injury to a swimmer or such, would be significant.
 
In my earlier post discussing third party claims I think that I have confused the issue by referring to a third party clause. This would be a part of a normal full cover policy. The PO had referred to third party insurance in which the third parties are the only ones who can recover any loss using the policy. I hope this makes it clear that it will only pay for the recovery of a wreck if someone else requires that to be done. What happens to the recovered vessel is not something on which I can express an opinion.
 
yotter said:
Yes, my concern is where the removal may be more that the insured value of the boat and I cannot just walk away, i.e. I may be legally liable for its removal. But it looks like 3rd party cover may cover that. Its not very clear to me?
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That is exactly what it means as I understand the matter. If your £10000 boat sank in the marina and it was going to cost £12k to remove, then the 3rd party liability kicks in. The assumption is that it sits on the seabed doing no harm, therefore no reason to recover, then along comes a 3rd party and says I want that removed, the marina owner, in this example. You contact your insurance and the 3rd party liability kicks in, up to whatever it is, £2million to £5 million.

There is a wreck of a modern yacht in Loch Creran from storm Amay, it’s the stern and cockpit section, ripped off the hull, and is sitting on the mussel bed posts and ropes, having floated in there. The mussel bed owner is looking for the yacht owner, to have it recovered from his mussel bed. This is a good example of a 3rd party claim.

In the Firth of Clyde, Peel Ports have the liability to remove wrecks from the Firth, as part of their management agreement to run the ports. I would assume that they would come looking for their money from any insurance, again a 3rd party claim.

Let’s say your boat sinks and no one gives a shit about it but you want it recovered and can lift it for £2000. The insurance will pay up to the value of the boat to lift it. This example was executed last year on the Clyde, Loch Fyne, where a renovated wooden boat, similar to a folk boat had been launched but sank overnight. The owner arranged a local team to float and recover the boat to shore, where he fixed the issue and I assume he recovered costs from the insurance. Yes, there may be other issues, such as the boat being written off.

Basically if your boat sinks, say in the middle of the Sound of Jura, you will be paid the value of the boat (all other matters considered) and no one will ask you to recover it. Our waters are full of boats like this sitting on the seabed rotting away.

That’s my understanding after pouring over my policy, and likely, yours will be similar.
 
yotter said:
. . . But what happens if the vessel is lost . . . Do the insurance companies have a limit of liability. It occurs to me since the cost of salvage could potentially be more that the insured value of the vessel. The third party liability is clearly much higher but not sure if this applies.
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I think previous posts have implied, but not necessarily explicitly given, an answer to that question.

Yes, the typical 'all risks' yacht insurance has two parts, each with different limits (and terms and restrictions),
1) one for the value of the yacht (covering repairs of damage to it, or paying compensation to the owner for its loss); and
2) the other, a far higher figure (typically in the £millions), for claims from third parties, which includes removal of the wreck if required (plus pollution control etc.), but also damage to others' property, or injury or other loss to them caused by you, or your boat and its use.

The third party liability cover (which can also be purchased on its own) is obligatory in almost every marina, boat yard, etc. and in some waterways and harbours It is a brave (and arguably foolhardy) yacht owner who does not have this, even if they never enter any place that formally requires it. You can easily be bankrupted, perhaps significantly worse in some places, by the potential costs and other troubles involved.

If you go without cover for the yacht itself, the worst that can happen is you lose your boat and/or its value.
 
RunAgroundHard said:
That is exactly what it means as I understand the matter. If your £10000 boat sank in the marina and it was going to cost £12k to remove, then the 3rd party liability kicks in. The assumption is that it sits on the seabed doing no harm, therefore no reason to recover, then along comes a 3rd party and says I want that removed, the marina owner, in this example. You contact your insurance and the 3rd party liability kicks in, up to whatever it is, £2million to £5 million.

There is a wreck of a modern yacht in Loch Creran from storm Amay, it’s the stern and cockpit section, ripped off the hull, and is sitting on the mussel bed posts and ropes, having floated in there. The mussel bed owner is looking for the yacht owner, to have it recovered from his mussel bed. This is a good example of a 3rd party claim.

In the Firth of Clyde, Peel Ports have the liability to remove wrecks from the Firth, as part of their management agreement to run the ports. I would assume that they would come looking for their money from any insurance, again a 3rd party claim.

Let’s say your boat sinks and no one gives a shit about it but you want it recovered and can lift it for £2000. The insurance will pay up to the value of the boat to lift it. This example was executed last year on the Clyde, Loch Fyne, where a renovated wooden boat, similar to a folk boat had been launched but sank overnight. The owner arranged a local team to float and recover the boat to shore, where he fixed the issue and I assume he recovered costs from the insurance. Yes, there may be other issues, such as the boat being written off.

Basically if your boat sinks, say in the middle of the Sound of Jura, you will be paid the value of the boat (all other matters considered) and no one will ask you to recover it. Our waters are full of boats like this sitting on the seabed rotting away.

That’s my understanding after pouring over my policy, and likely, yours will be similar.
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How did you know we are in the Sound of Jura tomorrow!
 
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