The promises in your boat policy that can void a claim

A warranty is a promise you make in the policy. Breaking one can mean the insurer does not pay, even for a loss the policy would otherwise cover.¹

What happened in the DIFC yacht fire case?

An owner insured a yacht with Al Buhaira National Insurance from 9 June 2023 for 13 months, with a sum insured of AED 1,365,000. On 26 June 2023 the yacht caught fire after an explosion and sank. The DIFC Courts dismissed the claim on 28 August 2025.¹

The court found the loss came from an insured cause, but that four warranties had been broken:¹

The court also found the owner had knowingly misstated the intended use. The policy was governed by English law.¹

Read the warranties and exclusions pages of your schedule the day you receive it.

How did the court decide whether each broken promise mattered?

It asked four questions about each one: is the term really a warranty, was it broken and not put right, does it define the whole risk, and could the breach have increased the risk of the loss that happened. Under the English Insurance Act 2015 the court applied, a breach that could not have increased the risk of the actual loss does not defeat a claim. Here the court found that the survey and private-use terms defined the whole risk, and that the owner could not show the other breaches had no effect on the risk of the fire.¹

• The survey. The policy named two surveyors and asked for a full condition and evaluation survey before cover began. The only report produced was a valuation by a different firm, sent to the insurer long after the fire. The court held that cover “did not incept”.¹
• Unattended. The court read “Marina based” to mean a purpose-built facility for small boats, not a port berth. The berth was safe and sheltered, but the yacht was left unattended with an engine running to charge the batteries, and the court found that a crew on board might have prevented the explosion.¹
• Not a consumer. Because the owner meant to use the yacht mainly for business, the court held he was not a consumer under English consumer insurance law, which would otherwise have softened his duty of disclosure.¹

If your policy names a surveyor, use that surveyor. If it says marina based, keep the boat in a marina.

What warranties appear in UAE boat policies?

The clauses are in Sukoon’s and Arabia Insurance’s wordings²³ and GIG Gulf’s handbook.⁴ GIG Gulf says that if you do not keep to its conditions it may cancel the policy, refuse the claim or reduce the payment.⁴

If you cannot keep a promise, tell the insurer before you break it and get the change in writing.

What should you do before cover starts?

• Do any survey the schedule asks for, with the surveyor it names, before the start date, and send the report to the insurer.
• Tell the insurer the real intended use, including any charter.
• Check that the fire and safety equipment the schedule lists is fitted and serviced.
• Note where the boat must be kept and whether it may be left unattended.

Disputes over a refused claim go to the insurer first and then Sanadak; see how to complain.

The small print

• The case. Ahmed Mohamed Eid Al Yahad Al Zaabi v Al Buhaira National Insurance Company [2024] DIFC TCD 002, judgment of 28 August 2025. The court applied the English Marine Insurance Act 1906 and Insurance Act 2015, under which a breach that could not have increased the risk of the actual loss does not defeat a claim unless the term defines the whole risk; it found each breach here either defined the whole risk or could have increased the risk.¹
• The policy. It incorporated the Institute Yacht Clauses (CL.328), with a deductible of AED 20,000 and a premium of AED 9,000.¹
• UAE law. Under the Maritime Law, deliberate non-disclosure lets the insurer invalidate the contract; a good-faith error leads to invalidation or a proportional cut.⁵