Let’s talk about some of the issues that come up with tenders, including the not so new trend of owning large, powerful, expensive “tenders” that are towed behind the yacht and the underwriters’ concerns about these boats:
Issue #1 – Is this really a tender?
A tender is defined as a vessel that is in service to the yacht. In the “old days”, a tender was a 13 foot Boston whaler with a 50
HP outboard (boy, I am showing my age). It was carried aboard the yacht. Today, there may be that 13 foot vessel carried aboard, that is definitely in the capacity of a tender. In addition may be the 36’ Contender with triple Yamaha outboards valued at $350,000 for the entire rig. This is not a tender. It is an additional vessel. The operation of this boat is typically not solely in service to the yacht. It is also not considered a tender simply because the “tender” is painted with “T/T Insert Yacht Name Here.” It is important to make sure that this vessel is properly added to the owner’s yacht policy. It is not automatically covered.
Issue #2 – Title
This issue normally comes up at closing or after there is a loss. Basically the insurance policy is written in the name of an insured. If that insured is a company, then the company also needs to be the owner of the tender. If the tender is titled to an individual, not the corporation that owns the yacht, then there could be an issue with coverage (the underwriter could find a reason to not pay a claim, and we do not want that). The simple solution is: make sure the tender is titled the same as the yacht, or if it is not, make sure the insurance policy agrees to endorse the owner as additional insured in respect of the tender.
Issue #3 – Is there a trailer that goes along with the tender?
Again, be sure this is added to the policy because it is not likely automatically covered.
Issue #4 – Is the tender kept separately from the yacht?
The underwriting of the yacht is based on specific information that includes where the yacht is kept, who looks after it, and how
it is protected from storms, theft, or other bad things that could happen. If the tender is kept elsewhere (say the owner’s second home), then it is a material fact that needs to be given to underwriters so they can approve that additional location for this boat.
Issue #5 – Towing
Towing a $300,000 asset behind the yacht has become the norm. The majority of these vessels are too large to be carried aboard the yacht, so towing arrangements are made. Most insurers will warrant (require) that a professionally made towing bridle be used, that the tow is monitored while in navigation, and that it is not towed in more than a certain sea or wind condition (Force 4). There have been many of these tenders lost while being towed, so it is a very important aspect to stress to the captain how important it is to take care of this property. It is the owner’s claims record, and while it may be an inconvenience to the captain or crew to lose the tender, that claim will follow the owner for a number of years and affect his insurability. Further issues come from a smaller yacht (for example 70’ Sportfish) wanting to tow a tender of say 35 feet. The majority of underwriters use a scale of 30%. They do not want a yacht to tow anything larger than 30% of the size of the yacht. This is for seaworthy reasons, as the tow could become unmanageable in difficult sea conditions and the tender cut loose (oh well, there it goes) and again an underwriter ends up with a major loss.
Lastly, is the issue of proper crew while a tow is occurring. Short manning on a large yacht puts strains on the crew. A tow needs to be properly monitored not just while at sea, but also going from port to port. Having enough crew, and crew trained in the operation of the tender they are being asked to run is an issue that yacht underwriters will look at when reviewing a risk. Issue #6 – Operation
Tenders have gone from a transport or service vessel to a powerful additional vessel. A triple outboard tender that may have the ability to reach speed of 65 to 70 Kts needs a person who has some level of experience before they are just given the keys. In most cases, the underwriters review the experience of the captain and the captain is then allowed to give authority to his crew to operate this vessel as required. Some policies may restrict the operator on the fast tender (a named operator clause) so that only they are allowed to run the boat. We all know of very serious claims that have occurred because of tenders being operated by crew or owners who were not competent, either because of a lack of experience, or because of impairment. Yachting is supposed to be fun, but there is risk involved and insurance underwriters look to the captain to make good decisions to protect the people on board and the passengers and crew as well.
Laura Sherrod is Senior Vice-President of Atlass Special Risks in Ft Lauderdale, FL. She has specialized in yacht insurance placement for over 25 years, working directly with yacht brokers, clients, captains, underwriters, and agents. She now manages a wholesale marine insurance agency that provides insurance programs for independent agents around the world.
This article is summary in nature for more information contact Laura at: firstname.lastname@example.org 954-525-0582
Atlas Insurance, 1300 S.E. 17th St., #220, Ft. Lauderdale, FL 33316 www.atlassinsurance.com