Understanding Boat Builders Insurance: Coverage for the Marine Industry

At first glance, Boat Builders Insurance may seem self-explanatory – insurance for those involved in boat construction. However, upon closer examination, the scope and complexities of this insurance become apparent. Boat builders encompass various marine businesses, including repairers, shipwrights, restorers, and fit-out specialists. Therefore, Boat Builders Insurance is not limited to traditional boat builders but extends to a broader range of activities within the marine industry.

Boat Builders Insurance serves as a specialized insurance solution for individuals or businesses engaged in activities such as manufacturing or building leisure-craft and commercial vessels, restoring classic or historic boats, refitting leisure-craft, and carrying out boat fit-outs. These activities may require specific insurance coverage to protect against physical damage and third-party liability risks.

The physical damage aspect of Boat Builders Insurance provides “All Risks” coverage for vessels under construction, including hulls, machinery, gear, and equipment. Depending on the policy wording, it may also cover associated molds and molding tools. The policy typically covers repair or replacement costs for defective parts discovered during construction, costs associated with failed launching operations or groundings, and loss or damage during transit for sea trials.

The insured values are based on the total value of vessels in progress and may reflect the completion value rather than the sale value. In some cases, payments made by the beneficial owner during the build stages can influence the sum insured. For high-value builds, the sum insured can be structured around the cost/value of the project at various stages.

Third-party liability coverage is a crucial component of Boat Builders Insurance. It protects against legal liabilities arising from physical loss or damage to third-party property, as well as injuries or death to third parties during vessel work or sea trials. The indemnity limit for third-party liability is typically a minimum of £3,000,000, but higher-value vessels may require more appropriate limits.

Boat Builders Insurance can be obtained as stand-alone coverage or as part of a combined Marine Trade Insurance policy. For individuals restoring or fitting-out their own leisure-craft, some leisure-craft insurance policies offer Builders Risk coverage. Commercial ventures, charities, and trusts in the marine industry can include Builders Risk coverage within a comprehensive Marine Trade Insurance policy, which may also cover property, business interruption, public liability, products liability, and employers’ liability.

To ensure proper alignment with the needs and goals of the business, it is advisable for boat builders to seek guidance from a specialist Marine Trades Insurance broker when structuring their insurance program. By obtaining the right coverage, boat builders can protect their operations, assets, and third-party interests within the dynamic marine industry.

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