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Engaging

a Manager

18 May 2009

Last revised

minutes

4

Reading time

All large yachts are now subject to a considerable array of regulations, imposed both by the country whose flag they fly, and by the jurisdiction into which they sail. Thankfully, whilst complicated, most of these regulations have been agreed upon internationally. By contrast, there are no uniform principles governing yacht management. The intricate relationship between owner and manager must be set out in detail in the management agreement itself.

minutes

4

Reading time

18 May 2009

Last revised

All large yachts are now subject to a considerable array of regulations, imposed both by the country whose flag they fly, and by the jurisdiction into which they sail. Thankfully, whilst complicated, most of these regulations have been agreed upon internationally. By contrast, there are no uniform principles governing yacht management. The intricate relationship between owner and manager must be set out in detail in the management agreement itself.

  • Good quality yacht management is vital, as owners can face fines, vessel detention, and criminal liability for breaching safety regulations.

  • Sanctions can bypass corporate and trustee owning structures by being enforceable against the yacht itself.

  • Managers should ideally agree to indemnify owners against third-party claims arising from their actions or inaction.

  • Owners should ensure that managers have sufficient indemnity insurance to cover potential large claims.

  • The Convention on Limitation of Liability for Maritime Claims may limit managers' financial liability in some cases.

  • Managers may seek protection by being named as joint-assured or co-assured on the owner's insurance policy.

  • Some managers may handle insurance, claims, and disputes for owners, requiring a detailed understanding of insurance law.

  • Owners should ensure that managers act as "principals" rather than "agents" in contractual matters.

  • Managers may outsource certain tasks, and the management contract should specify the tasks they have authority to sub-contract.

  • The International Safety Management Code applies to commercially-operated yachts over 500 GT, and managers should assume responsibility under it.

  • Managers may seek protection by being named as joint-assured or co-assured on the owner's insurance policy.

  • Some managers may handle insurance, claims, and disputes for owners, requiring a detailed understanding of insurance law.

  • Owners should ensure that managers act as "principals" rather than "agents" in contractual matters.

  • Managers may outsource certain tasks, and the management contract should specify the tasks they have authority to sub-contract.

  • The International Safety Management Code applies to commercially-operated yachts over 500 GT, and managers should assume responsibility under it.