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Old 16-12-2013, 07:34   #1
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How much Third Party Liability Coverage?

Hi Everyone,
Our boat insurance is up for renewal, and we've had her long enough to feel like she's not going to sink or burn to the waterline and then sink. So we are probably going to just get third party liability insurance for her, so we can stay in marinas and yards and also be covered if we drag anchor onto a megayacht and scratch their paint.

Do you guys have any thoughts on how much coverage is enough for boat mishaps? When we had cars we had a lot of liability coverage, since it was cheap and car accidents in America can wipe even the wealthy out if you hurt someone.

But with a boat, outside of the US, I'm thinking the worst we could do is start a fire in a marina, with a Lagoon 60 or whatever parked beside us. What is that: $500k or $1m? Or outside of the US, do we not have to worry about their insurance company suing us?

Or is that way overboard and not even available-- what do you guys think is reasonable? Also, do you have any particular recommendations for a place to buy this coverage?

Thanks

Matt
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Old 16-12-2013, 07:41   #2
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Re: How much third party liability coverage?

The minimum liability required by yacht clubs for member boats, around here (Toronto Canada) is $2 million. I don't know if they enforce that on visitors, or what's the requirement at marinas.
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Old 16-12-2013, 07:48   #3
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Re: How much third party liability coverage?

A lot depends on the requirements of the marinas you are planning to use.

In Australia, a number of marinas now require $10 million liability cover!
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Old 16-12-2013, 07:54   #4
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LOL... $10 million... not sailing my 22ftrs there that's for sure..
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Old 16-12-2013, 07:57   #5
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Re: How much third party liability coverage?

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Originally Posted by Lake-Effect View Post
The minimum liability required by yacht clubs for member boats, around here (Toronto Canada) is $2 million. I don't know if they enforce that on visitors, or what's the requirement at marinas.

Yes 2 million. re the Lagoon 60, the fire might spread to the next and the next, hopefully they're not all Lagoon 60's.
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Old 18-12-2013, 01:06   #6
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Re: How much third party liability coverage?

The rule of thumb I have heard is that (in the US) you should carry liability coverage that covers all of your assets, plus 4-8x (or more) of your current income.

Remember that the victor in a civil suit can take all of your assets, let you declare bankruptcy, and then have the court garnish your wages. In some foreign jurisdictions you have to put up a bond for the full amount of the suit, or else be jailed. Good liability coverage covers both your defense (which gets expensive, even if you win) plus the bond to ensure you aren't jailed.

You want your insurer to have at least as much skin in the game as you do: all of your assets, plus 4-8x your current / expected income (e.g., 25% of your income for 25 years).
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Old 18-12-2013, 01:15   #7
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Re: How much third party liability coverage?

A serious by a crew member/guest can easily run into 7 figures. Remember, they can not only sue for their injuries but loss of companionship/etc for their SO. Worst case is a fire in a marina. Really really easy to get into multiple 7 figures if a fire spreads to adjacent and not so adjacent boats. Espcecially if my boat was in a covered slip, I'd carry a whole lot of liability insurance. We carry $500,000 liability on the boat and another $1,000,000 on an Umbrella Policy and have been considering upping the Umbrella policy to $2,000.000.

$500,000 is a pretty common minimum coverage.
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Old 18-12-2013, 02:04   #8
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Re: How much third party liability coverage?

All northern european insurers that I know of start at 5.000.000 euro for third party coverage. When we switched to a global coverage this got upped to 6.000.000 euro.
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Old 18-12-2013, 02:38   #9
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Re: How much third party liability coverage?

I've got AUD$500,000,000.
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Old 18-12-2013, 02:52   #10
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Re: How much third party liability coverage?

Gents, I am flabbergasted!! We have a 41' Beneteau in the BVI's and just upped our liability from $300K to $500K and thought we were pretty well covered. The numbers that you are throwing around are astronomical. We also have the boat owned by a corporation, which limits the potential personal liability. gts1544
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Old 18-12-2013, 02:58   #11
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Re: How much third party liability coverage?

My boat is also owed by a company.

But if the poo hits the fan I want to be covered (and not in poo!)
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Old 18-12-2013, 04:02   #12
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Re: How much third party liability coverage?

Quote:
Originally Posted by msponer View Post

But with a boat, outside of the US, I'm thinking the worst we could do is start a fire in a marina, with a Lagoon 60 or whatever parked beside us. What is that: $500k or $1m? Or outside of the US, do we not have to worry about their insurance company suing us?

Or is that way overboard and not even available-- what do you guys think is reasonable? Also, do you have any particular recommendations for a place to buy this coverage?
Mat,

Consider how much damage your boat could do in a marina if it caught on fire. Also, the answer to your question depends on what countries you are going to...as stated earlier, there are marinas in Australia that require a minimum of $10 million. Some countries charge you big bucks for an oil spill.

I am guessing that a fire could take out 8-10 boats in a marina.

Our liability coverage is 15 million euro.

Bill
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Old 18-12-2013, 04:08   #13
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Re: How much third party liability coverage?

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Originally Posted by gts1544 View Post
Gents, I am flabbergasted!! We have a 41' Beneteau in the BVI's and just upped our liability from $300K to $500K and thought we were pretty well covered. The numbers that you are throwing around are astronomical. We also have the boat owned by a corporation, which limits the potential personal liability. gts1544
These are my numbers too. When I look at my risk management and potential for loss nothing more seems justified and none of the marinas that I frequent have ever expected more.
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Old 18-12-2013, 04:25   #14
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These are my numbers too. When I look at my risk management and potential for loss nothing more seems justified and none of the marinas that I frequent have ever expected more.
I pay about £400 a year on a comphrensive policy covering a boat valued at £ 100k and third party liability to £6 million

I cannot get cover for environmental damage though. Mines with GJW

Dave
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Old 18-12-2013, 05:36   #15
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Re: How much Third Party Liability Coverage?

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Originally Posted by goboatingnow View Post
I pay about £400 a year on a comphrensive policy covering a boat valued at £ 100k and third party liability to £6 million

I cannot get cover for environmental damage though. Mines with GJW

Dave
What's your region of cover?

Regards,
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