What does your boat or yacht insurance pay for?

Your policy pays for damage to your own boat, for what you owe other people, or both, depending on the sections you buy and the causes the wording lists.¹²

What are the two main parts of a boat policy?

GIG Gulf’s Sail Master handbook covers loss or damage to your boat “directly caused by an accident, including fire, theft, malicious damage and vandalism” in Section 1, and your legal liability to others in Section 2.¹ Sukoon’s and Arabia Insurance’s wordings use the Institute Yacht Clauses, which list named causes such as perils of the seas, fire, theft and collision.²³

Al Buhaira puts it plainly: “Fire, theft, collision, grounding, storm or accidental damage are not automatically covered merely because the policy insures a yacht. The cause of loss must fall within the issued wording and must not be excluded.”⁴

Ask for the full policy wording, not only the leaflet, before you buy.

Is a third-party only policy enough?

For the licence in Dubai, the law asks for cover of your liability to third parties.⁵ GIG Gulf sells a third-party liability only version of Sail Master, and Arabia Insurance a third-party plan.⁶⁷ These do not pay for damage to your own boat.

Under the federal Maritime Law, a marine policy does not cover damage you cause to others “without a special agreement”.⁸ Under the Institute Yacht Clauses, the liability section applies only when a sum is stated for it in the schedule.²

Check that your schedule shows a liability limit, and that it is high enough for the boats and people around you.

How much liability cover do policies offer?

The amount is set in your schedule. Published examples:

• GIG Gulf’s leaflet gives third-party cover up to AED 2,000,000, extendable to AED 4,000,000.⁹
• Sukoon arranges protection and indemnity cover through P&I clubs for yachts, covering crew, guests, collision, pollution, fines and wreck removal. Its Privilege Yacht plan is for vessels valued above AED 500,000.¹⁰
• Al Buhaira’s proposal form offers third-party liability “Upto Hull Value”.¹¹

A higher limit costs more. Ask for the price at two or three limits and compare the difference.

What extras do UAE policies include or offer?

Union Insurance lists racing, uninsured boaters, personal accident, machinery damage, war and strikes, water skiing and personal effects as extras for an added premium.¹² Al Wathba lists personal effects, transit in the UAE, uninsured boater, water skier and wreck removal liability as optional covers.¹³

Tell the insurer which extras you want on the proposal form, then check they appear on the schedule.

What do boat policies commonly leave out?

Wear and tear, rot, osmosis and marine growth are excluded in GIG Gulf’s handbook. So is machinery failure on a boat over three years old or designed for more than 17 knots, unless it follows a listed event such as sinking or fire.¹ War, piracy, strikes and terrorism are excluded from a marine policy unless agreed.⁸

Hire or charter, racing and use outside your cruising area are covered only if the insurer agrees. See navigation limits and policy warranties.

Read the exclusions section of your wording line by line and ask about any activity you plan.

The small print

• Maritime Law. Article 286(1) lists what the insurer must pay, including sue and labour costs to protect the insured property. Article 288 excludes war, piracy, strikes and terrorism and, without special agreement, damage to third parties. Article 291 excludes inherent defects except a hidden defect in the ship.⁸
• Institute Yacht Clauses. Sukoon’s comprehensive wording is based on the Institute Yacht Clauses 1/11/85 (CL.328), “subject to English law and practice”. The liability clause is clause 11.² Arabia Insurance reproduces CL.328 under local law and jurisdiction.³
• GIG Gulf. The extras in Table 2 are in the Section 1 and additional extensions of the Pleasure Craft handbook. Its leaflet and web page give some limits in AED and some in US dollars; the schedule decides.¹⁹