Coronavirus and the consequences
The Coronavirus pandemic and the associated lockdown measures have posed enormous challenges to the world and not least to the yachting industry. At this point, we would like to take a closer look at some questions that our superyacht account managers frequently received from owners and captains.
Due to travel restrictions, illness or other limitations, it is not possible to crew my superyacht (sufficiently). What if a claim occurs while the yacht is unattended?
It is the owner’s responsibility to ensure adequate supervision of the yacht. The Captain or relief captain should always be near the yacht, unless exceptional circumstances are notified to your insurance provider and these are agreed in advance. The Master of the yacht should be able to reach the yacht within minutes in the event of an emergency. Furthermore, insurers expect the highest possible safety procedures to be in place and all Flag state & Class requirements must be met. By not doing so, this could jeopardise a Hull claim or could risk automatic termination of P&I cover.
Always talk to us at Pantaenius if there are crew manning issues, if the captain is replaced or if there are changes in crew numbers.
It should be noted however that claims which could have been prevented by adequate manning of a superyacht will always be questioned by Pantaenius (and other insurance providers), even if there is no minimum safe manning flag requirements. This is not only in times of Covid-19. Even though owners and captains might expect the marina personnel to take over when the yacht is not manned, the most recent cases show that this is seldom the case. In fact, many of the increasingly crowded marinas do not meet the security requirements emerging from the high number of yachts berthed.
Ultimately, the owner and captain are responsible for the yacht and this responsibility can lead to serious implications regarding the yacht’s insurance cover, even if restrictions make access to the yacht difficult or temporarily impossible.
With this in mind, we advise all captains/owners to check with the port/marina operator whether an official order is accompanied by a ban on entering the harbour area. In this case, you should ask a local service company or the harbour master/capitainerie to look after your yacht and regularly check the obvious safety measures like mooring lines and fenders (unless there are minimum manning requirements set by the flag state which overrule any other arrangement). By doing this, the risk of damage can be minimised or any damage that has occurred can be reported as quickly as possible.
Do I still have to pay the full insurance premium even if I cannot use the yacht?
A postponed season does not mean a substantial reduction in risk for the insurers. On the contrary, it is during the off season months that around 60 per cent of the annual claims volume occurs. There is still a substantial risk of fire, hull damage, lightning strikes etc, and can result in cumulative losses caused by fire or natural disasters.
As the current Coronavirus pandemic has shown, it is often difficult to estimate how long the yacht will not be used, however, there is a possibility to review the insurance cover in place and we advise you to discuss your requirements with your Pantaenius account manager.
There is an option for restricted laid up Hull insurance cover but this is only valid for a continuous period of 12 months and only appropriate if the yacht is not being used at all and laid up ashore. The P&I Club will also need to be notified if the yacht is laid up for long periods of time.
If a crew member falls ill with Covid-19, are the treatment costs covered?
Generally speaking, Covid-19 is a disease that is insured under both the Crew Medical and P&I insurance. In any event, the illness of a crew member should be immediately reported as usual to the Crew Medical claims handlers. Pantaenius clients should also send details to their account manager so that they can coordinate the P&I cover accordingly.
The P&I Club will conduct a case-by-case assessment to determine whether the Member (Insured) is liable for the crew member falling ill or dying as a result of Covid-19. If liability is proven, cover will be provided for the costs incurred by the members for their liabilities related to this event.
Unfortunately, the insurers are not able to give a blanket confirmation of coverage with regards to Covid-19, because there are many parameters which determine if it is covered or not. However, the Pantaenius crew medical product covers medical related expenses, so if a hospital stay is medically necessary due to a Coronavirus infection, cover will be available for an eligible claim in accordance with the policy conditions.
We have a suspected crew case of Coronavirus and would like to quarantine the yacht or individual crew members. Are the associated costs covered?
There is no cover for crew quarantine expenses in the Crew Medical insurance. However, in most countries, it is statutorily determined that if an Authority has declared quarantine, they shall be eligible for the expenses. In addition, the P&I Club advise that it depends on the individual situation of the vessel and their crew and guests etc. and each claim would be dealt with on a case by case basis.
Where a vessel has taken the decision to voluntarily isolate crew or put the yacht in quarantine and incur associated expenses/losses without taking advice from local authorities/medical professionals, the P&I Club would suggest that the costs arising from this may not be covered under our policy. In assessing the voluntary quarantine approach the P&I Club would certainly expect the decision making process to be on a necessary and reasonable incurred approach and further supported by local medical and/or expert opinion/recommendations. The Club would also wish to be on notice and involved in any decision making process to ensure we are all in agreement and that the parties are proceeding on the understanding of what is and is not likely to be covered.*
There was a Coronavirus outbreak on board and a quarantine was ordered for the yacht. Are the costs covered?
If a yacht has been quarantined because there is an outbreak on the vessel, then the P&I Club’s quarantine costs section of the policy wording may provide cover. This cover provides for additional expenses incurred by the Member as a direct consequence of an outbreak of an infectious disease, including quarantine and disinfection expenses and the net loss to the Member, (over and above such expenses as would have been incurred but for the outbreak) in respect of fuel, insurance, wages, stores, provisions and port charges. The P&I Club would expect a reasonable approach to be adopted in relation to costs/expenses, following expert/professional advice and with the Club involved throughout.
Cover may include the cost of replacement crew, if necessary, but the P&I Club would not pay for replacement crew and sickness wages of the crew member they are replacing.*
Crewmembers of my yacht cannot reach the yacht due to travel restrictions. Are the salaries or the costs for a replacement crew insured?
If they are quarantined without symptoms, there would be no cover under the crew medical insurance, but if a crew member falls ill, the insurer will assess the claim, subject to whether they have the additional salary benefit under their medical insurance plan.
The P&I Club states that if a crew member is quarantined ashore as a precautionary measure due to government travel restrictions, the additional costs are not covered as there has been no outbreak on the ship and the crew member has not been diagnosed with the illness. In the event that the crew member falls ill during this period, the P&I Club will carry out a review to determine whether the member is liable. If so, cover will be provided for the salary costs incurred by the Member for their liabilities related to this event.*
Unless a yacht has an outbreak of an infectious disease on board, the Club’s quarantine costs and expenses section of cover will not be triggered and therefore any related costs would be deemed tob e operational. The cover under the quarantine section relates to an outbreak on the vessel and the costs, expenses and liabilites that arise out of it.
If crew members are unable to return to the vessel due to the generic travel restrictions, and there is no specific illness or quarantine due to illness on the yacht, the costs of salaries for the crew member unable to return to the yacht and the replacement crew member are unfortunately an operational cost and therefore not covered.
Given the fact that local regulations and instructions in particular are changing rapidly against the background of a renewed increase in the spread of the Coronavirus, the above information is subject to change. Our team of insurance experts is of course always available to answer your individual questions. In an emergeny, the Pantaenius Claims Department is also available around the clock.
Interactive map with Covid-19 port restrictions:
Tips for self-isolation:
Ship-owners advice Covid-19:
International Chamber of Shipping advice Covid-19:
*Source: The Shipowners’ Club, www.shipownersclub.com