Claim story - what happens when a paid skipper damages my boat?

Firstly, we want to draw your attention to the general course of action which needs to be undertaken to have the skipper you have engaged covered to operate and care for your boat. Whenever you engage a delivery skipper or the like to move your vessel, it is best you advise your insurer. There may be an amendment to the cover which is required. In almost all cases, Pantaenius would require the skippers sailing CV to be sent through so that we can ascertain whether they have the necessary experience to operate your boat and be covered under your policy. If all is agreeable, Pantaenius will then add the skipper's name to your policy for the desired period of time.

Now, what do you need to do if your boat is damaged whilst in the care of a paid skipper? In the first instance (for any damages 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 that 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 the damages.

If you wish to submit a claim then a filled and signed claim form will also be required. If the skipper who damaged the vessel was noted on the policy, and the damage is caused by a peril covered by the said policy, then the policy will respond accordingly for damage caused by the skipper in control of the vessel. For example, if the approved skipper hits a submerged object whilst delivering the boat, this damage would be covered under the policy as per the conditions of PDS. The times when a professional skipper would not be covered as a part of the policy would be when 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.

Ok ok, so here’s the story we mentioned.

One of our new insureds purchased their dream boat down in Victoria during covid. As they could not inspect the boat themselves due to the lockdowns, they engaged an assessor to provide a pre-purchase report (something any prudent boat owner should do prior to a purchase). All seemed ok so they went full steam ahead with the purchase, arranged insurance through Pantaenius, and engaged a professional delivery skipper to take the vessel up to Queensland where they reside.

Whilst the skipper’s journey was supposedly ‘underway’ our insured received a call from the police notifying them that they had just found the vessel 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. It took the insured a long time to get onto the skipper who advised them that there was minimal damage and he was heading up to Queensland again.

Once the boat arrived in Queensland it was lifted and the extent of the damage quickly became apparent. Unfortunately, it was very extensive. Pantaenius was notified in the first instance of the grounding and had an assessor arranged for the lift date. Whilst the assessor was there to investigate the extent of the loss and confirm the damages, he was also engaged to interview the skipper and his crew member to further identify the circumstances around the loss.

From the investigations undertaken by the assessor, it became evident that there were ample issues with the skipper’s course of action. Firstly, he had no travel plan in place, as such they almost ran out of fuel on a couple of occasions. The skipper also did not consider the quarantine/covid rules in place at the time which would require him to self-isolate in every state he visited. He also planned to just sail the whole (multiple-day) journey without sleeping so that he would not need to stop in a state and therefore not comply with any covid laws.

Of course, this meant that fatigue became a huge risk factor. The crew member he engaged had also never been sailing, he was not considered competent crew, he was just offered a bit of cash to help deliver the boat. So what happened in the end? Well, the boat grounded in shallow waters just off the coast whilst both the skipper and his crew member were sleeping. The skipper was meant to be steering the boat but fell asleep at the wheel, this almost happened a few times during the journey.

Despite those warning signs the skipper refused to stop and rest, blatantly risking the safety of the boat and crew. Given all the circumstances around the loss, it was found that the skipper acted negligently and this 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, he should have known better as a paid professional and as such is liable for the loss.

To expedite the process and assist the insured, Pantaenius covered the claim and organized the repairs. Once all the works were complete we commenced recovery action against the skipper. Now in a normal circumstance, the skipper would pass the information on to his indemnity insurer and they would handle that matter on his behalf. In this instance, it was however revealed that the skipper had no indemnity insurance, a product that anyone in the service industry should have for possible losses caused by themselves or their employees. This unfortunately meant that we had to pursue the skipper directly for the loss, a sum in the vicinity of $ 70,000.00.

This was both a big and expensive lesson for that skipper and highlights the importance of having adequate insurance for the business you are running. In the end, Pantaenius recovered 50% of the repair costs from the skipper as any more would have sent him bankrupt which is not a position Pantaenius wanted to put anyone in. In this case, no one came out well, as the full recovery was not made Pantaenius was unable to refund the insured their deductible, the skipper was at a big loss and Pantaenius also had to pay out large sums for a claim which should have been covered by a liability policy held by the skipper.

So the lesson from this claim story is, yes generally professional skippers would be covered as a part of your policy (if you have received approval for them to be covered) however only if they act appropriately. If their gross negligence causes damages to your boat then that loss would need to be recovered by them or their indemnity insurance. The reason they would be liable for such losses is because they are professionals, they are expected to know what they are doing when delivering a boat, and their knowledge and understanding should exceed that of a general boatie.

Hope that gives you all a bit more information.

We are happy to answer more questions in depth should you have them! Feel free to contact us at info@pantaenius.com.au