Is your £5,000,000 Public & Yachtyard Liability Limit in reality only a £40,000 Limit?
Marine Traders are being advised to check their Marine Trades Insurance schedules and policy wordings following one insurer’s confirmation that Liability claims may not necessarily be paid out in full. The situation came to light recently in the case of one trader who had purchased £5m of cover from his insurer. The trader concerned had informed his insurer that he worked on craft up to £40,000 in value but despite the £5m limit he had purchased to meet local marina contractor requirements he was informed any pay-out in respect of claims arising from his work on vessels would be limited to £40,000.
Marine Traders are advised to check their insurance schedules and policy wordings or, if unsure as to the scope of their cover, contact their provider for guidance. IRCM’s Mark Elcocks said “The main problem is that cover varies from one insurer to another. One Lloyds syndicate specifically restricts cover to the value of vessels worked on and states this on the schedule of insurance. However, in this case traders may be confused as to the level of cover they actually have as the same part of the schedule will also state the overall limit of Public and Yachtyard Liability which will typically be £3m or £5m”
Other providers may not indicate any maximum value or length of vessels worked on or handled within the schedule of cover but will state a maximum in their full policy wording – perhaps £1.25m maximum value and 100 feet overall length and there are one or two providers who do not restrict marine traders to any particular value or size of vessel at all.
Mark went onto say “We spoke to one marine trader only last week who was working on a vessel worth almost £4m yet his schedule indicates a maximum value of vessels worked on of only £1.25m. In a worst case scenario, the trader could find themselves liable for the thick end of £3m in the event of being found liable for the total loss of the vessel. The trader informed us he had never been asked about the value of craft he worked on”.
IRCM are offering Marine Traders a free insurance audit. You will have the opportunity to have your schedule, policy wording, statement of fact and any warranties or endorsements audited which will help identify any gaps in your protection or issues such as being limited to working on vessels of a particular size or value. For further information, telephone Mark Elcocks on 01902 796793 or email markelcocks@marineinsurance-ircm.co.uk