Some risks you can insure against

According to the British Marine Federation (BMF), the marine industry is showing signs of recovery. In its bi-annual trend survey last year (May to November 09), the BMF reported 32% of respondents said the value of their UK-based orders had increased and 35% agreed their future prospects were ‘excellent or good’.

And a 2009 report commissioned by the BMF, Maritime & Coastguard Agency (MCA), Royal National Lifeboat Institution (RNLI) and the RYA, found 7.2% of the UK population – around 3.7million UK adults - took part in at least one of 12 specified boating activities. Given the economic outlook and level of participation appears increasingly buoyant, does this mean marine traders have less to worry about?

‘Sadly, society is becoming increasingly litigious and everyone involved in this sector – from boatbuilders and manufacturers to self-employed marine engineers and RYA training centres - could end up being involved in a dispute,’ says Nigel Mills, MD at marine trader insurers Towergate Mardon. ‘For example, many boat owners don’t fully understand the complexities of modern engines or appreciate their responsibilities to maintain and service them at regular intervals. So when something goes wrong, they expect the marine trader to put it right, regardless of the cause.’

So marine traders can get drawn into expensive disputes. To combat this, they should have at a minimum product liability cover (including defective workmanship) and consider commercial legal expenses cover with a ‘contract disputes’ extension.

‘Looking at trends, the high prices of non-ferrous metals have produced a spate of thefts with some of the main targets being outdrives,’ said Mr Mills. ‘These can be relatively easily unbolted from the craft and the aluminium casing and other metals are sold for scrap. The irony is, if they’re sold for scrap they’ll fetch a hundred pounds or so, but will cost thousands to replace.’

Gangs stealing
More recently there have been rumours of gangs stealing high value outboard motors, often in broad daylight on marinas. The engines are quickly bundled into the back of a van and are out of the country within hours, making recovery very unlikely. Whilst it’s virtually impossible to prevent theft altogether, good quality locking bolts for outdrives and outboards are available.

It’s a condition of most boat insurance policies that outboards are locked on to the transom and it could be insurers will insist on similar protection for outdrives.

There are other areas where the unwary marine trader can come unstuck and find his or her self at the wrong end of proceedings. BB’s Business Matters often highlights changes in legislation that affects the industry, covering everything from data protection to, for example, Health & Safety, which changed drastically in 2009.

‘Like all sectors, marine traders not only face risks to their businesses, but increasingly to their personal finances. When the Health & Safety (Offences) Bill came into force last year it raised the maximum magistrates fine to £20,000 and included imprisonment as an option for most health and safety offences. And more serious cases could be escalated to the Crown Court, accompanied by unlimited fines. 

Discipline and grievance
Similarly, a new discipline and grievance regime came into force last April meaning employers who fail to follow new ACAS Codes of Practice will have to pay out higher compensation.

‘It’s no surprise, therefore, to find marine traders are having to become experts in areas they’re not specialists in; health and safety, human resources, employment law and grievance procedures, etc,’ says Mr Mills. ‘Towergate Mardon recognises this, so offers customers a simple online Health & Safety Guide where the latest forms and information can be downloaded. There’s also valuable information on Human Resources and the extensive legislation around the employment of staff.’

But one other area where boat owners might end up with their boat out of action through no fault of their own these days is on some sections of the inland waterways.

Due to severe drought conditions in the north of England, some levels have been closed altogether. And those still open, but with reduced levels, bring increased risks of collisions and groundings; one of Navigators & General’s most common claims.

N&G has teamed up with River Canal Rescue (RCR) and is warning the prolonged lack of rain, leaks and high lock usage are all contributory factors and their effects can vary from region to region. Even though speeds are low, there is still a risk of damage to the boat or its machinery, aborted journeys and plain embarrassment, through being unprepared for the risk that low water levels present.

Weeds, tree debris and rubbish that would otherwise sit in the bottom silt, will be far more likely to come into contact with the hull, propeller and rudder. The consequences can range from a much slower journey, serious damage to underwater gear or a fouled propeller.

Water cooled
For boats with water cooled engines, there is the risk of ingesting fouled water which can lead to overheating, a broken impellor or block in the engine itself. These are a major risk in shallow waters, especially if high revs are used.

N&G says owners may need to reacquaint themselves with the weed hatch and methods of clearing a fouled propeller. RCR has logged over 20 callouts in the last few months where grounding was the initial cause of the problem; low water levels, sand banks and obstacles on the Thames, Fens and Trent have caught out many experienced boaters.

Superyacht crew benefits
Moore Stephens, a provider of multi-sector wealth management services on the Isle of Man has developed a comprehensive financial support service for superyacht crew through one of its group companies, Moore Stephens Crew Benefits Limited.

The comprehensive service, which will incorporate a 24/7 helpline, comes on the back of Moore Stephens' superyacht registration, HR solutions and yacht owner services, which had already expanded into yacht crew payroll. It includes retirement savings plans, health insurance, accident cover, flexible income protection and life insurance.

‘Our clients can either leave their retirement savings to be managed by their chosen provider or manage their own retirement savings using the investment funds available in the International FlexiPlan through a secure web-based platform,’ said MD Clive Dixon. ‘The International FlexiPlan has been specifically tailored with seafarers in mind. No other product on the market has been dovetailed to their needs in such a way. Our goal is to become a one-stop financial shop for crew, it's as simple as that.’

Bishop Skinner donates £500,000 to the RNLI
Bishop Skinner is in the RNLI’s good books after having made donations totalling £500,000 over the last 10 years.

Bill Southgate, Bishop Skinner’s marine schemes director in Chelmsford said: ‘As marine insurance brokers we are acutely aware of the dangers our customers face when sailing in British waters. Without the RNLI, the sea would have claimed many more lives, so we are delighted to be able to show our support for the crucial work they carry out around the UK and Republic of Ireland.’

Bishop Skinner will be donating a further £65,000 this year, which brings the grand total donated to £500,000 over the last 10 years.

With the money pledged by Bishop Skinner, the RNLI has produced a sea safety handbook which is distributed to coastal regions to educate sailors and yachtsmen on the dangers of the sea. The handbook, Sea Safety: The Complete Guide offers free advice for anyone going afloat and is regularly updated.