This is a question that we are often asked, which is fair enough! It can be confusing trying to understand your insurer’s role when a paid skipper damages your boat. A recent claim provides a perfect example of that situation, but we’ll get to that story a little further down the page.
If you plan to engage a skipper to operate and care for your boat, to deliver it to a new location, for example, and want them included under your insurance, then it is best to advise your insurer as the cover may require amendment. In most cases, Pantaenius would need to examine a copy of the skipper’s sailing CV so that we can ascertain whether they have the necessary experience to operate your boat, and therefore warrant cover under your policy. If all is agreeable, Pantaenius will then add the skipper’s name to your policy for a designated time.
What are your obligations if your boat is damaged whilst in the care of a paid skipper?
Firstly, for any damage at all, it is best to contact your insurer for scenario-specific advice. Pantaenius has a 24/7 claims hotline and an in-house claims team which handles all matters and can guide you through the process.
Regardless of the incident type, you will need to obtain a detailed statement from the skipper on the cause and extent of any damage. If you wish to submit a claim, then a properly completed and signed claim form will be required. If the skipper in control of the vessel was noted on the policy, and the cause of damage is covered by said policy, then the policy will respond accordingly. For example, if an approved skipper hits a submerged object whilst delivering the boat, this damage would be covered under the policy, as per the PDS. However, a professional skipper would not be covered under the policy if his/her negligence is the cause of the loss. As a paid professional, the skipper should have their own indemnity insurance which would cover them in instances where their negligence causes any loss or damage.
The story mentioned earlier is one where negligence was involved …
A newly insured client purchased their dream boat down in Victoria during the COVID pandemic. As they could not inspect the boat themselves due to the lockdowns, as any prudent boat owner should do prior to a purchase, they engaged an assessor to provide a pre purchase report. The report was positive, so they went ahead with the purchase, arranged insurance through Pantaenius, and engaged a professional delivery skipper to sail the vessel to Queensland where they reside.
Whilst the vessel was supposedly ‘underway’, our insured client received a notification from the police that it had been discovered grounded near Coffs Harbour. The skipper was still onboard but refused to accept help from the police and would not answer any of their questions. Eventually the client was able to make contact with the skipper and was advised that there was minimal damage, and that he was about to resume the journey.
Pantaenius had been notified of the grounding and arranged for an assessor to examine the vessel on arrival in Queensland. The boat was lifted from the water and, unfortunately, the damage was extensive. Whilst the assessor was there to investigate the extent of the loss and confirm the damage, he was also engaged to interview the skipper and crew member to ascertain the circumstances around the loss.
From the investigation undertaken by the assessor it became evident that there were issues with the skipper’s course of action. Firstly, he had no travel plan in place and consequently almost ran out of fuel on a couple of occasions. Secondly, to avoid COVID quarantine restrictions which would require him to self-isolate in every state he visited, the skipper planned to sail the whole (multiple day) journey non-stop, with limited sleep. Of course, this meant that fatigue became a huge risk factor. In addition, the crew member he engaged was inexperienced, since he had never been sailing, and was just offered cash to help deliver the boat.
So, what was the outcome? Apparently, the fatigue had caused both the skipper and crew member to struggle to remain awake a few times during the journey. Despite the warning signs, the skipper refused to stop and rest, blatantly risking the safety of the boat and crew. Eventually, the boat grounded in shallow waters just off the NSW coast when the skipper fell asleep at the wheel and the crew member was also sleeping. Given the circumstances, it was found that the skipper acted negligently and that his behavior was the direct cause of the damage to the boat.
The skipper did not exercise his duty of care while in control of the boat. As a paid professional, he should have known better and, as such, was liable for the loss.
To expedite the process and assist the insured owner, Pantaenius covered the claim and organized the repairs. Once the works were complete, Pantaenius commenced recovery action against the skipper. Normally, a skipper would pass the information to his indemnity insurer who would then handle that matter on his behalf. In this instance, however, it was revealed that the skipper had no indemnity insurance – a product that anyone in the service industry should have to protect them from possible losses caused by themselves or their employees. This unfortunately meant that Pantaenius had to pursue the skipper directly for the loss, a sum in the vicinity of $ 70,000.00. This was an expensive lesson for that skipper and highlights the importance of having the adequate insurance for the business you are running. Ultimately, Pantaenius recovered only 50% of the repair costs from the skipper as any more would have sent him bankrupt. In this case, all parties lost. As full recovery was not made, Pantaenius was unable to refund the insured owner’s deductible, the skipper was nearly bankrupted, and Pantaenius had to pay out for a claim which should have been covered by a lability policy held by the skipper.
The lesson from this story is that, generally, professional skippers would be covered as a part of your policy (if they have received prior approval from the insurance company), but only if they subsequently act appropriately. If their gross negligence causes damage to your boat, then that loss would need to be recovered from them or their indemnity insurance, because as professionals, these skippers are expected to know what they are doing when delivering a boat, and their knowledge and understanding should far exceed that of a general boatie.
We are happy to answer more questions in depth should you have them! Feel free to contact us at info@pantaenius.com.au
Published in print July-September 2023
