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I have been providing insurance programs to marine clubs for over 19 years. If I were to ask that same question to a room full of insurers and brokers operating in this specialized segment, I’m pretty sure there would be a deafening clamor as each tried to claim that their own pet policy or plan was the best. insurance option for sailing, yacht, cruise and any other maritime club. A series of whistles, bells and other rinky-dinks would be paraded in great detail, no doubt depicted from the point of view of the vendor rather than a yacht club. After all, sellers have something to sell and are rarely able to resist the opportunity to sell, even when odds as fearsome as this call for a sale of heroic proportions, which usually means shouting even louder.

It’s pretty much the same scenario when it comes to insurance marketing in this specialized part of the marine leisure industry. There is a lot of noise from an increasing number of participants, each trying to attract attention by making more noise than the others. Lots of noise but very little in the way of differentiation and they all offer a “bespoke” cover with many “unique” features. How on earth can a sailing club committee decide exactly what is the best option for their club and its members?

It is in this context that, in April this year, the Royal Yachting Association (RYA) announced changes to the insurance requirements for its approved training centres: Public Liability (PL) to be increased to a minimum limit of compensation of £3,000,000 and, more importantly, Approved Centers would be required to carry £500,000 of Professional Indemnity (PI) cover in respect of their training activities.

Prima facie this seemed to be a sensible move. Firstly, although a “compensation shift” trend has seen PL limits increase in recent years, a £3,000,000 PL limit is currently considered to be the sensible minimum to carry. Second, professional services, including “advice”, are specifically excluded from normal LP insurance writing (including marine leisure policies) when provided for a fee and obviously when training is provided for a fee, one would expect to receive some kind of advice. be taught by an instructor. Training and advice are therefore normally insured in an IP policy, so the new requirement seemed like a sensible move.

One can only speculate how training centers received the announcement of the new requirements, particularly not-for-profit grassroots yacht clubs for whom every pound counts. An increase in PL Insurance to a limit of £3m probably wouldn’t break the bank, but PI might, perhaps, be a different matter altogether. First, IP in the Maritime Sector can be expensive, even for relatively low coverage limits due to limited market appetite. Second, where children and/or vulnerable adults are involved in activities, the market’s appetite decreases further creating further shortages that could lead to even higher prices.

If clubs received the news less enthusiastically, one wonders how certain insurers and insurance brokers might have reacted to the prospect of what appeared to be a game changer being announced, for precisely the same reasons as above. . Insurers because PI is anathema to many of them and brokers because it would not be easy to access a market prepared to offer acceptable rates in exchange for the required scope of cover.

Everyone no doubt breathed a huge sigh of relief when, just 5 months later, in September, the RYA announced that professional liability insurance would not be a requirement after all, as long as a facility’s liability insurance had an extension that covered his training. activities, including compensation for bodily injury to participants.

Please provide a meticulous scan of the fine print in the policy wording by stakeholders to ensure they meet the following requirements to be implemented by February 1, 2016:

“The purpose of public liability insurance is to indemnify the RTC and its instructors when a third party (which could be a student, customer, or member of the public) suffers personal injury or property damage as a result of the intervention of the RTC or the instructor. negligent acts or omissions, and the RTC and/or its instructors are obligated to defend and/or pay damages to the injured party, therefore, the RTC must ensure that any instructor employed or contracted directly by the RTC is covered by RTC public rights liability insurance policy The RTC liability insurance shall be extended to indemnify the RTC and its instructors when the negligent advice or instruction of the RTC or its instructors causes personal injury or other damage or loss and the RTC and/or its instructors are required to defend the claim and/or pay damages” (RYA Training Notice TN 07-15 of 7 September 2015).

Fortunately, the statement tells everyone exactly what the purpose of PL coverage is. How then to reconcile this with the exclusions in terms of training and advice? Well, insurers have tackled this in various ways. One, for example, contends that as long as they indicate “Training” in the commercial description of their cover program, the explicit exclusion in their policy wording would not apply to the club or center in question. Another applies what I consider to be a “safer” option for the club by providing a specific endorsement confirming that tuition is covered.

So everything goes well: the center is compensated in case of damages to third parties caused by negligence or omissions of its monitors in the advice and instruction given. Yes? Well, actually, not necessarily.

Remember all those insurers and insurance brokers shouting who had the best features and benefits? Well, it’s time to grit your teeth and hear what some of them have to say, particularly on “Bodily Injury.” One insurer defines bodily injury as “death, illness, infirmity, or nervous shock.” Another defines it as including simply “Death, Injury or Illness” Still a third party as “Any physical injury to a Third Party including death, illness, mental injury, distress or shock resulting from such physical injury.”

If you haven’t fallen asleep, you may see the [not so] subtle differences between the 3 definitions. The first includes Nervous Shock but what exactly is that? Well, the legal definition of Nervous Shock is a mental condition that extends beyond pain or emotional distress to a recognized mental illness. This is in contrast to the third example, which includes mental injury, distress or shock, which are not conditions as advanced as nervous shock and therefore potentially offer a better scope of coverage, as if any of the conditions described were to progress to become mentally ill, then the coverage would still be effective. By contrast, the first does not state that Nervous Shock must be the result of physical injury, while the third example will only cover mental damage, distress or shock (and illness) if it is the result of physical injury. . The second definition does not provide coverage for any form of mental illness or distress.

So which option would you prefer or matter to you, your club or your members? At the end of the day, they all seem to “check the box” as to what RYA’s intention is.

However, we must consider what the intention of the insurance is. Is it to compensate the club, the center and the instructors in case of injuries that arise during the course of the training itself, that is, during the actual instruction in and out of the water, or something else? What about the effectiveness of training? What if someone sustains an injury or damage several months after training and is relieved as a result of an error or omission during training? In this scenario, the club or center would almost certainly not be covered by your Civil Liability Insurance.

Additionally, the excerpt from RYA Training Notice TN 07-15 (above) requires coverage with respect to “other damage or loss.” While third-party property damage would normally be covered, “other loss” presumably means some kind of loss (for example, purely financial) other than injury or damage that would not, in fact, be covered by Section PL and You would normally require a PI policy to protect this type of liability.

Let’s take a look at a couple of other scenarios that could affect clubs and their committees:

Imagine there is an incident at a club or facility where someone under instruction is seriously injured and the facility is prosecuted by the Health and Safety Executive (HSE). What if the PL cover you thought would cover you for £3 million has an internal limit of £50,000 in respect of legal fees for HSE proceedings and does not cover any compensation? £50,000 is soon consumed in legal fees. But hey, the cover ticks all the boxes.

Furthermore, after the incident, the HSE not only prosecutes the legal entity that is the training center, but also prosecutes the directors and/or officers of the club itself. There is no protection for them under your PL Insurance, not even for legal expenses.

A club committee decides to take the step of expelling a member who subsequently decides to take legal action against the club; a club volunteer or employee sues the club for harassment or discrimination, a group of members decide to take legal action against club officials because they feel that the officials have not acted in the best interest of the club or its members. Here we see more examples where there is no protection for the club or its officials under the club’s PL insurance, but it “checks the box”.

Insurance that “checks the box” may come at a low price, often a boost for a club looking for a cheap solution, but it won’t offer the bespoke gapless protection that club officials might want in the 21st century.

5 questions that employers and directors of yacht clubs should ask themselves before deciding which is the best insurance for yacht clubs

1. What are the long-term goals of my club and members?

2. If the club were prosecuted, how would you finance your defense?

3. If the club had indemnities against you outside the scope of your Civil Liability Insurance, how would you comply with said indemnities?

4. How would I defend myself against accusations and charges brought against me for decisions, errors and omissions made in my capacity as a club officer?

5. Do I want to put my personal assets at risk, either during my tenure as a club officer or after I have retired?

These are just some of the questions you can ask yourself as a club officer to help you determine what area of ​​protection you would like to invest in to achieve the goals of your club, your members and, indeed, yourself. To some, these issues will be important, to others they will be considered irrelevant, and if they are important, the concept of value will often override that of final price.

Value, of course, is in the eye of the beholder, but even so, I’d take a chance that the “Best Value” solution is a program that’s fully aligned with your goals, backed by good security, and delivered at the best premium. available: in other words, the best insurance for your yacht club. Differences in definitions in policy terms, as well as the variation in scope of coverage described above, suggest that a single “out-of-the-box” policy that offers a one-size-fits-all solution that is anything but personalized may not necessarily be the best option. best option for your club or center.

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