Charter Guide
Charter Insurance and Protection
Insurance is the quiet architecture beneath a carefree charter. The yacht arrives comprehensively covered, yet that cover is not the same as your own. Knowing where the yacht's protection ends and where a guest is wise to arrange their own gives real peace of mind before you sail.
In short
The yacht carries its own insurance covering hull, third-party liability and crew. This does not extend to a charterer's travel, cancellation, medical costs or personal belongings. Guests should hold their own travel and cancellation policy, and are liable for damage they cause, usually covered by the security deposit. This is general information, not advice.
On this page
What the yacht insures
A reputable charter yacht is comprehensively insured by its owner, and you should expect nothing less. That cover typically falls into three parts.
- Hull and machinery. Protects the yacht itself against damage or loss, covering the vessel, its engines and its equipment.
- Protection and indemnity, or P&I. Third-party liability cover, protecting against claims arising from the yacht's operation, including injury to third parties and pollution.
- Crew cover. Insurance for the crew, including their employment, medical care and repatriation, so that those running the yacht are properly protected.
Between them, these policies mean the yacht, its systems and the people who operate it are insured to a high standard throughout your charter. It is entirely reasonable to ask, through your advisor, that a yacht holds current and adequate cover, and this is confirmed as a matter of routine before any charter proceeds. You can raise the question when you make an enquiry.
What it does not cover for you
The important point for a charter guest is that the yacht's insurance protects the yacht and its operation, not the charterer as an individual. It does not stand in for your own travel insurance. In practice this means the yacht's policies will not cover the following on your behalf.
- Your journey to and from the yacht, including flights and connections
- Cancellation or curtailment of your charter for personal reasons
- Your own medical treatment ashore or repatriation
- Loss of or damage to your personal belongings
- Any activity you undertake independently of the yacht
None of this is a gap in the yacht's arrangements. It is simply the natural boundary of what a vessel's insurance is designed to do. The remedy is straightforward: a guest holds a personal travel and cancellation policy of their own, which we return to below.
The yacht's insurance protects the yacht and its operation. Your own travel policy protects you.
Charterer's liability and the deposit
As the charterer, you take temporary responsibility for the yacht, and with it a measure of liability for damage caused through the fault or negligence of your party. In everyday terms this is modest and rarely tested, since the crew manage the yacht and its equipment. It matters most around the water toys, tenders and personal watercraft, where guest use most often leads to minor damage or loss.
This liability is customarily addressed through the security deposit, sometimes called a damage deposit, which you place alongside the charter. It is separate from the Advance Provisioning Allowance, though the two are occasionally handled together, and it is returned in full at the end of the charter provided no damage has occurred. Where damage does occur, the cost is drawn from the deposit and the balance returned. Our guide to the Advance Provisioning Allowance explains how these sums sit apart from one another, and the glossary defines the security deposit in full.
Travel and cancellation cover
A personal travel insurance policy is the single most useful protection a charter guest can hold, and arranging one is a sensible first step once a charter is booked. A good policy covers the ordinary risks of any significant trip, and for a charter it is worth ensuring it extends to the value at stake and to time spent aboard a private yacht.
What a suitable policy usually includes
- Cancellation or curtailment cover to the value of the charter
- Emergency medical treatment and repatriation abroad
- Personal belongings and valuables while travelling
- Personal liability cover
- Cover for water sports and activities you intend to enjoy
Because charter fees are substantial and are committed well in advance, cancellation cover matters more here than on many holidays. Should illness, a family emergency or a missed connection prevent you sailing, a policy taken out at the time of booking can protect the sum you have committed. Read the terms with care, as cover for pre-existing conditions and higher-value items often needs to be declared.
Cancellation and force majeure
The charter agreement itself sets out what happens if a charter cannot proceed, and it is worth understanding these terms before you sign. Charter contracts follow well-established industry forms, and they typically provide for staged cancellation fees depending on how far in advance a charter is cancelled by the charterer, which is one reason personal cancellation insurance is so valuable.
Most agreements also contain a force majeure clause, addressing events beyond anyone's control, such as severe weather, mechanical failure or other circumstances that prevent the yacht performing. Depending on the wording, these provisions may allow for a substitute yacht, a change of cruising area, a postponement or a refund. The precise remedies vary between contracts, so your advisor will walk you through the relevant clauses before you commit. Our guide to how to charter a yacht sets the agreement in the wider context of booking.
Medical and personal effects
Away from home waters, prompt medical care and evacuation can be costly, and neither is provided by the yacht's own insurance for a guest. A personal policy with strong emergency medical and repatriation cover is therefore important, particularly for older guests or anyone with a health condition. Carry the policy details with you, and let the captain know discreetly of any condition or medication that the crew should be aware of in an emergency.
Personal effects, from jewellery and watches to cameras and clothing, are likewise your own responsibility. High-value items are often subject to single-item limits on a travel policy and may need to be listed specifically. A yacht offers a safe for valuables, and using it is wise, but the insurance of those items rests with you rather than the vessel.
Why hold your own policy
The theme running through all of the above is a simple one. The yacht insures the yacht; you insure yourself. A comprehensive personal travel and cancellation policy closes the gap between the two and turns the small residual risks of a charter into matters you need never think about again. It costs little against the value of the charter, and it allows you to sail entirely at ease.
Arrange it early, ideally when you book, so that cancellation cover is in force from the moment your money is committed. Read the terms, declare what needs declaring, and keep the details to hand. With that done, the insurance side of your charter is complete, and you are free to enjoy the sea. You may find our guides to crew tipping and provisioning useful as you finish your preparations, and more reading awaits in the journal.
This guide offers general information on charter insurance and is not financial, legal or insurance advice. Cover, contract terms and liabilities vary between yachts, insurers and jurisdictions. Always read your own policy and charter agreement carefully and seek professional advice on your particular circumstances.
Common questions
Does the yacht's insurance cover me as a guest?
Not personally. The yacht's insurance covers the vessel, third-party liability and the crew. It does not cover your travel, cancellation, medical costs or belongings. For those you should hold your own travel and cancellation policy.
Am I liable if something is damaged?
You take responsibility for damage caused by your party's fault or negligence, most often to water toys and tenders. This is customarily covered by the security deposit, which is returned in full at the end of the charter if no damage has occurred.
Is the security deposit the same as the APA?
No. The APA covers running expenses such as fuel, food and berthing. The security deposit is a separate sum held against possible damage and returned at the end, less any deductions. They are sometimes handled together but serve different purposes.
Should I take out travel insurance?
Yes. A personal travel and cancellation policy is the most useful protection a charter guest can hold. Arrange it when you book so cancellation cover is in force from the moment your money is committed, and ensure it covers the charter's value and any water sports.
What happens if the charter is cancelled?
The charter agreement sets out staged cancellation terms, and most contracts include a force majeure clause for events beyond anyone's control, which may allow a substitute yacht, postponement or refund. Your advisor will explain the relevant clauses before you sign.
Are my valuables insured aboard?
Not by the yacht. Personal effects are your own responsibility, and high-value items may need listing specifically on your travel policy. Use the yacht's safe for valuables, but insure them yourself rather than relying on the vessel.
This guide is general information, not legal, tax or insurance advice. To plan a charter, make an enquiry or browse the yachts.