Imagine this: your boat catches fire, is covered with paint overspray, or is impaled by a fork lift thanks to a negligent boat yard worker. Are you sure the yard will take responsibility?
There is a potential risk in boat servicing that is easy to miss. When you have work done on your boat such as repairs, spring launch, cleaning, etc., you sign a work order that may include language waiving your rights to collect for damages caused by the repairer. This language is typically called Waiver of Rights of Subrogation or Hold Harmless Agreement.
When you agree to these terms, you are restricting your insurance company from collecting from a negligent party for damage the repairer may have caused. For example, the travel lift operator drops your boat and holes it through his or her own negligence. Your insurance company will pay for the repairs but will want to subrogate and collect from the yard.
Some yacht policies exclude coverage for damage caused by contractors when you sign away those subrogation rights. And of course, some companies offer to provide that coverage for an additional premium.
Take a few minutes and read the work order before you sign it, to find out what you’re covered for. If the repair order contains language that protects the service provider from paying for damage when negligent, ask to remove that language. If they will not then you may want to find another yard to repair your boat, one that takes responsibility for negligence.
You can also check with your marine insurance specialist about the possibility of obtaining coverage for negligence. Don’t take a chance; check it out carefully and do some of your own risk management. If you have any doubts at all, call your insurance company.
Editor’s Note: This article was submitted by Mike Smith of Global Marine Insurance Agency.