We have a shipping/marine repair industry worth billions, employing many thousands of people. The value of the vessels being worked on necessitates some good coverage when a slip of the welding torch could cost everyone a lot of money!
The standard general public liability insurance policy normally excludes any work done on large watercraft. This is why, even if you are doing something as simple as installing toilet roll holders on a large vessel, you’ll want coverage specifically looking after marine repair issues.
Have a look at this excellent product briefing from one of the leading insurers for some further information:
What about cover for work on trailer craft?
Because so many businesses work on trailer craft or components of boats, insurers have written back some limited cover. It’s provided to cover day to day work on small trailer craft, but very importantly has some strict restrictions. This means there are length and tonnage limits imposed, plus the limit of liability value is normally no more than $250,000. With length restrictions normally being 8m, the intention is that any work on vessels or components of vessels that are not trailer craft are excluded. A good working rule of thumb is that if the vessel you’re working on is in a marina or mooring then it’s not covered!
It’s getting around these issues that make bespoke ship repairer insurance so important. Underwritten and managed by specialist marine insurers, it’s far better suited to the marine industry than a standard public liability contract. It has no length restrictions or issues with tonnage and its liability limit is the full amount specified.
In regards to Ship Repair Liability there are some loopholes and key points that often get overlooked:
- Claims notifications periods.
Some insurers have time limitations in their wordings. What this means is that if you do have a problem or incident you have a specific time period to notify the insurer. The intention behind this is to make sure you promptly tell the insurer that something has gone wrong so that remedial costs for repair can be done whilst the vessel is in New Zealand.
- Terms of Trade.
It’s very important to have terms of trade or contracts with clients. Some insurers actually require this in their conditions.
- Common exclusions:
- There is no cover normally for new builds. It’s a ship repair policy not a ship builder’s policy, which is a different insurance contract.
- Some policies exclude changes in tonnage or length being made. Cover can be arranged but it’s important to notify the insurers first.
- Policies do not cover loss of use or demurrage. If you’re working on a commercial vessel and something goes wrong any claim against you from the customer for lost income is excluded. This can easily be dealt with in having this also incorporated in your terms of trade.
- Because there is typically no cover for work overseas, you’ll want to purchase a travelling workman’s clause, but this is normally charged for separately and definitely needs to be discussed with your insurer.
- Jurisdiction and territory NZ only. Again important to note that the work is normally only covered in New Zealand.
Got any more questions, about anything from oil leaks to pollution to coverage in the event that a vessel sinks? Give your friendly local insurance broker Gareth a ring on 022 066 3114 or email me: firstname.lastname@example.org