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Who's

Who

3 January 2023

Last revised

minutes

5

Reading time

Buying insurance is an annual chore which you, as owner, no doubt leave to your yacht manager or captain. Some larger managers have in-house insurance specialists, but it’s fair to say that it’s often an area that is little understood. Here, we look at the various parties involved and their respective roles.

minutes

5

Reading time

3 January 2023

Last revised

Buying insurance is an annual chore which you, as owner, no doubt leave to your yacht manager or captain. Some larger managers have in-house insurance specialists, but it’s fair to say that it’s often an area that is little understood. Here, we look at the various parties involved and their respective roles.

  • Large yacht insurance is provided by underwriters: other parties are merely part of the distribution channel.

  • Insurance brokers should act on behalf of the insured - not underwriters - but are paid commission by underwriters.

  • Some intermediaries may mislead clients into believing they are brokers when they are actually agents of underwriters.

  • Other intermediaries may act as brokers during policy inception but switch to being underwriters' claims handlers during claims, leaving owners without the guidance they had expected to receive.

  • Repackaging existing P&I cover to appear as an add-on can mislead clients and inflate costs.

  • Underwriters prioritize profitability and may challenge large claims, causing significant delays and losses to the insured.

  • It is crucial to verify the location and regulation of underwriters to avoid being left without coverage if they become insolvent.

  • Insurance brokers are tightly regulated to prevent conflicts of interest, ensuring they act in the client's best interests.

  • Brokers have a duty to exercise reasonable skill and care, identify the needed insurance, disclose material facts, and obtain suitable cover underwritten by a reputable underwriter.

  • Acting as an unregulated insurance intermediary in the UK is a serious criminal offence; you should check that they're registered with the FCA.

  • Underwriters prioritize profitability and may challenge large claims, causing significant delays and losses to the insured.

  • It is crucial to verify the location and regulation of underwriters to avoid being left without coverage if they become insolvent.

  • Insurance brokers are tightly regulated to prevent conflicts of interest, ensuring they act in the client's best interests.

  • Brokers have a duty to exercise reasonable skill and care, identify the needed insurance, disclose material facts, and obtain suitable cover underwritten by a reputable underwriter.

  • Acting as an unregulated insurance intermediary in the UK is a serious criminal offence; you should check that they're registered with the FCA.